3 February 2021

On today’s show, Preston talks with author, Andy Edstrom, about how traditional finance views Bitcoin and how the environment is quickly changing. Andy is the author of the book, Why Buy Bitcoin.



  • How typical financial managers deal with clients interested in Bitcoin.
  • Regulatory limitations for most fund managers.
  • Bitcoin ETFs.
  • What’s the right portfolio size?
  • What’s Andy’s biggest FUD buster?


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Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.


Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

Preston Pysh (00:00:02):
Hey, everyone. Welcome to our Wednesday release of the podcast where we’re bringing you more information about bitcoin. What an exciting week for bitcoin news. We had legendary investor, Ray Dalio, say, “I believe bitcoin is one hell of an invention.” We also had Elon Musk, the wealthiest person in the world, put only one word in his bio on Twitter, and you guessed it, the word was bitcoin. He also commented that, “I’m a supporter of bitcoin, and it’s on the verge of broad acceptance.”

Preston Pysh (00:00:28):
So now that bitcoin is starting to get a lot of attention, I’m going to have a conversation with a friend, who is a money manager and a person who can talk about his perspective of dealing with clients who are trying to buy bitcoin for the very first time. My guest is Andy Edstrom. He’s the author of the book, Why Buy Bitcoin: Investing Today in the Money of Tomorrow. We cover topics like ETFs, what sizing is appropriate for your portfolio, what regulatory hurdles still need to be overcome, and much, much more. So without further delay, here’s my interview with Andy Edstrom.

Intro (00:01:01):
You’re listening to Bitcoin Fundamentals by The Investor’s Podcast Network. Now, for your host, Preston Pysh.

Preston Pysh (00:01:19):
All right. So like we said in the introduction, I’m here with Andy Edstrom, and very excited to have this conversation because, Andy, we’ve done I don’t know how many shows together at other people’s podcasts, but you and I have never had a one-on-one conversation like this, so I’m really excited to dive into this.

Andy Edstrom (00:01:36):
Preston, I have a great time. I have fun every time we talk, so I am psyched to get into it.

Read More

Preston Pysh (00:01:42):
Well, let’s do it. So here’s what I want to start off with, is just your opinions on the market in general, not even talking about bitcoin but just macro. You want to talk about equities, whatever, but I’ll throw this out there and just hear your thoughts. The Nasdaq did 43% last year, which was just insane considering the circumstances of COVID and everything else. The S&P did significantly worst, 16%. If you’re comparing those two performances, it’s almost like they’re in two different universes when it comes to investing. So I’m just curious, just some of your general thoughts on that in itself.

Andy Edstrom (00:02:22):
Yeah. It’s been a strange time in financial markets to say the least. I’ve been in markets for about two decades now, and it’s interesting to observe some of the trends. What’s different this time? What isn’t? I’m of two minds, and I’m conflicted. So on the one hand, I feel like the growth trade is pretty extended. In other words, the entire decade of 2010 to 2020 has been growth just beating the pants off of value as you know well because I remember you’ve talked about earlier in your learnings, in your evolution as an investor, you started as a value investor, Warren Buffett, all that good stuff.

Andy Edstrom (00:03:06):
Historically, a decade of outperformance tends to be about as long as it goes for growth versus value, and usually you get a reversion or value will surge back. Sometimes, it’s in the context of a major market correction or a bear market because growth valuations get extended. You get to 20 and then 30 and 40 and 50 times earnings, and then people’s rosy assumptions about the growth rates of some of these companies eventually run into reality.

Meanwhile, those left for dead, cheap valued companies finally get bought. However, we are living through, as you know, a major shift between the Industrial Age and the Information Age, and so one has to be cognizant of that potentially being different this time, and so there’s this constant struggle in my mind between, oh, how long in the tooth is this growth rally and when will get a reversion to value versus, oh wait, most of the economic growth is into software and automation and internet-enabled businesses, network-enabled businesses and entities like bitcoin? And so, yeah, it’s a really tough call.

Andy Edstrom (00:04:17):
I definitely think that valuations are pretty stretched. I think that investors are doing their DCF calculations, like you talked about, based on near zero or very long-term interest rates, and so you get to goofy valuations if you’re assuming that the 30-year treasury is going to yield very, very low single digits in perpetuity. And that’s where I think we are right now. It makes me nervous.

Preston Pysh (00:04:43):
So, Andy, I came up with a theory just recently. As I was looking at the Nasdaq chart, and you and I are seeing each other right now and I’m going to share my screen with you so you can see what I’m looking at, and all I’m looking at is a chart of the Nasdaq over the last, call it, I don’t know, six to seven to eight years. Can you see the chart that I’m sharing with you, Andy?

Andy Edstrom (00:05:07):

Preston Pysh (00:05:07):
So when I’m looking at this, and I think everyone is accustomed to this narrative that we have, six to eight-year business cycles historically. And ever since 2008, 2009, this thing has been relentless, and the duration of this bull market that we’ve seen is just unprecedented. But when I look at this chart and I zoom into various areas, and you can see I’m zooming in, for people listening, I’m going to the end of 2015, the market started having this, it was throwing a fit. And you went through, it was a very short period of time, the market went down -25%, and then immediately recovered. Central bankers stepped in. Everyone said that they had unlimited amounts of stimulus and QE that they could add. This was probably around the February of 2016 timeframe. I remember Draghi came out over in Europe, and lo and behold, the market takes off again.

Preston Pysh (00:06:04):
Then, fast forward a couple of years into the future, we’re in September 2018. The market throws another fit, and it drops aggressively. This time, 23%. Central bankers stepped in. They say all their things. We fast forward again into 2020, and we all know, we’re all accustomed to this recent fit that dropped 30%. They step in with unprecedented stimulus.

Preston Pysh (00:06:30):
So my question is this, as I’m describing this and we’re looking at this chart, my question is, is the new business cycle post 2008, 2009 one of just total manipulation that plays out in a much tighter timeframe but in which nominal prices just keep going up? Because when you look at the chart, it looks like that.

Andy Edstrom (00:06:51):
Yeah. I love the phrase, it wasn’t my original but, recessions are illegal, and even you could say bear markets are illegal. I am a big believer in the tail wagging the dog here in the wealth effect being so important in the US stock market, which is now, I don’t know, it went from 100% of GDP to 150% of GDP to, I don’t know, it’s probably like 175 now, if I had to guess. And granted, you’re looking at the QQQ, so this is just the tech sector, but as we note, tech broadly speaking is now, whatever, a quarter of the index. It can’t let things normalize. It’s not allowed. If things did normalize, then anyone with wealth, which is basically a large percent of the population which has the propensity to spend, although granted rich people that own stocks spend less on the margin than folks that don’t, we’ll have a big problem if prices actually normalized.

Andy Edstrom (00:07:47):
So I do think that we are stuck in this cycle now. They have to keep stimulating. It’s going to be financial market-driven pullbacks and recessions that we see in the future, but this is going to be the game unless and until we get significant “inflation.” And I’m talking about consumer price inflation. Obviously, we see the inflation in assets, but I think that the Fed thinks that it can just keep doing this in perpetuity until finally they get a rise in inflation. So when they say that they’re going to deliver inflation, I believe them. We’ll see what happens.

Preston Pysh (00:08:25):
My concern is you have all these people in money management and the talking heads on CNBC, and I suspect everyone is looking for that event where the market sells off for two or three years and drops and has another 2008, 2009 or a 2000 crash that would conclude this 12-year, 11-year bull market, whatever you want to call it, since 2008, 2009 time period. I think everyone is looking for that, but I just don’t necessarily buy the idea that it’s going to happen. And I think a lot of it comes down to the interest rates. We haven’t had interest rates … They’re down to zero. They can’t let them drop 5% like they did on all these other previous “traditional boom and bust cycles.” So it sounds like you agree that maybe the cycle is shortening itself so that it happens every year, every two years and then the reflation is just-

Andy Edstrom (00:09:20):
And the stakes are too high. Because of the amount of leverage in the system, I’m talking about leverage also in the equity markets, also on corporate balance sheets, just on households, it’s everywhere as you know, debt is just record levels as a percent of GDP. If they let it unwind, then you’d get cascading liquidations. This was the moment that the Fed had, in March, it was when the treasury market fell out of bed. And I don’t remember if it was just the long end of the curve or it was also the middle of the curve, but basically treasury started selling off, and that’s not supposed to happen. Treasuries are supposed to rally when there’s risk off, and so treasuries are falling when there’s risk off. You know that the system is well and truly threatened.

Andy Edstrom (00:10:09):
I think that the Fed and other central banks have realized that basically a major downturn in equities or risk markets will filter through to credit, and when the credit market goes, all hell breaks loose. This can’t happen.

Preston Pysh (00:10:23):
So, Andy, let’s transition into you’re a financial manager, you have lots of experience doing this. And I’m curious, when somebody comes to you and they say, “Hey. I’m interested in buying bitcoin,” you obviously have a response to them, but I’m curious how some other peers or people that … or stories that you’ve heard from other financial managers, what you’re hearing them tell their clients as they say, “Hey. I want a 1% position or a 5% position in bitcoin.” What are most people hearing back from financial planners and managers?

Andy Edstrom (00:10:59):
That’s a great question, Preston. I think the major problem that a lot of wealth managers face or that they articulate or that they’re worried about is, “I don’t have a product that I think is safe enough, compliant enough. Basically, I’m worried about getting sued by my client if I lose money in bitcoin.”

Andy Edstrom (00:11:17):
My personal view on that, and I think I’m the exception, is that given what I know about bitcoin, what the valuation potential is, i.e. the upside potential, as well as potentially the value of the hedge against inflation. Given how important it is to a client’s portfolio, it’s hard for me to see how I wouldn’t buy it for them even with an imperfect product. In other words, it’s a business … There’s a classic concept in law, it’s usually invoked in law, which is there are legal questions and there are business questions. And to me, this is a business question. It’s like, yeah, maybe there isn’t a perfect product out there, although there are several products that have come to market and that are growing. Basically there’s a whole world of options that are now available that weren’t there a few years ago so there’s more.

Andy Edstrom (00:12:07):
But I would say that’s the main thing that people come to me with, that advisors come to me with. They say, “Look. I can’t get it past my compliance department,” or, “I don’t have the perfect product so I’m not willing to take the risk.”

Preston Pysh (00:12:19):
And so they just push them to an exchange like Kraken and say, “Hey. Do it yourself?”

Andy Edstrom (00:12:24):
Yeah. They prefer not to admit that to me, I guess, but I think that’s got to be practically what happens, is they probably end up at Coinbase, is my best guess in many cases.

Preston Pysh (00:12:38):
Wow. I never even really thought of that challenge for a lot of them from a compliance standpoint, but now that you say it, it makes some sense. So tell us how you think about that from a compliance standpoint.

Andy Edstrom (00:12:49):
I guess the holy grail … Well, okay. As we know, the holy grail in terms of an investible product for wealth managers, for financial advisors obviously is an ETF, and that doesn’t exist yet. So next best is an SEC-qualified custody product, which also does not exist. So short of that, there are various fund structures out there. They all have their own pros and cons and various amounts of hair on them. There are several direct buy options. There’s DIM has one. The [98 00:13:23] guys have one. Eaglebrook has one. There’s several out there. And those come with their own hair as well. Then, of course, there have been hedge fund structures around for a long time, limited partnerships. We all know there’s Grayscale, and that’s a trust and it trades at a premium and it’s not the normal way, financial filer.

Andy Edstrom (00:13:42):
And so none of these things are perfect. As you know, I’m working with Swan, which is a private client product. None of these things are perfect, but I think as an advisor, you say to yourself, “Well, I want this clearly SEC-qualified silver bullet solution,” and we just don’t have that yet, and I don’t think we’ll have that. To me, that happens at 100K bitcoin, so you probably miss a triple from here if you wait for that.

Preston Pysh (00:14:07):
Why wouldn’t Grayscale fit into a category that would be considered “qualified?”

Andy Edstrom (00:14:13):
They’re a trust structure … By the way, if you buy it on the secondary then it does show up on your 1099 form, which is your normal brokerage form, although they have a different form if you subscribe it net asset value, and that means you’re doing subscription documents and qualifications and you’re sending wires and stuff. You can’t buy just it in the brokerage account. And they are not SEC-qualified as far I know. As far as I know, basically no asset manager has a literally SEC-qualified product, SEC-approved product out there, and so that’s the downside, as well as obviously the premium to net asset value.

Andy Edstrom (00:14:53):
I didn’t even go through the whole laundry list. There’s 3iQ has a fund. Obviously, the SkyBridge guys have come to market with the fund. Bitwise has been out there actually for a while, having done all that good research on where’s the real transaction volume in the bitcoin markets? How much of it is fake? But those are some of the downsides of Grayscale, as well as the fees which are pretty high.

Preston Pysh (00:15:18):
I want to get back to Grayscale a bit. Before we do that, what are your thoughts on Gary Gensler coming in as the new SEC chairman? Tell people a little bit about who he is and what his background is and then your thoughts on whether some of these regulations are going to change under his watch.

Andy Edstrom (00:15:35):
So Gensler comes from the dark side of finance just like me. He’s an ex-Goldman partner. I was never a partner at Goldman, by the way. I was a lowly pleb as some on this show like to say. And yes, so he knows the financial world inside and out. Obviously, he was chairman of the CFTC. I think it was under Obama. And he has taught courses at MIT on “blockchain and crypto.” I assume he understands bitcoin better than most, and so at least he probably knows what he’s doing. I think that he was actually maybe on record about concerns about Ripple being a security … or XRP being a security years ago.

Andy Edstrom (00:16:20):
And so at least, he should know what he’s talking about, which is arguably an improvement from some folks, some regulators, let’s say people on regulation. I don’t know if I’m going to name names, but it’s been a mixed bag. In some respects, we’ve been really lucky. Obviously, we’re blessed with Brian Brooks. So I would say that Gensler is on the net, probably positive for this industry, for bitcoin.

Preston Pysh (00:16:46):
In the show notes, we’ll drop … Gary taught at MIT, taught this course that Andy is talking about. It’s a 24-lesson course. Each lesson is an hour-long and he goes in depth on how this stuff works. Quite fascinating to be able to get an MIT education on the topic from the SEC incoming chairman. It’s pretty neat.

Preston Pysh (00:17:08):
So over to the Grayscale. Why is nobody else able to compete with them in this space? It makes no sense to me that they have so much market share and they don’t have any competitor. What is causing that?

Andy Edstrom (00:17:23):
I wish I knew all of the discussions between the regulators and the various parties that have funds products now. In fairness, Bitwise has made a move. They now have effectively a similar trust-structured product that is trading, although theirs is an index product, and obviously it’s heavily skewed to bitcoin, but of course it had some holdings in XRP, which they liquidated quickly after the lawsuit came to light from the SEC, which was a good move in retrospect because the price fell further. But they also have a bitcoin fund, but it’s not yet trading on the secondary.

Andy Edstrom (00:17:58):
And so if you ask me, how come Grayscale was able to bring this product to market and guys like Bitwise couldn’t follow soon with a similar structure on just bitcoin, I wish I knew the answer about that. I really don’t know.

Preston Pysh (00:18:12):
I’ve asked that question so many times, and I just cannot find an answer from anybody.

Andy Edstrom (00:18:17):
Yeah. Here’s an idea, Preston, which is … because Grayscale I think came to market in 2013 maybe or ’14. It was a while ago. I wonder if there was a change in regime in terms of regulator. In other words, if we had the election in 2016 … For example, I don’t mean to single out Bitwise, but I’m not sure that they were in the market with a product yet. I don’t know. If Grayscale got grandfathered in under the Obama administration, I don’t know, I’m just spitballing here, it maybe got harder to get through the gates after you had the change in administration.

Preston Pysh (00:18:50):
It has to be something like that. Here’s what’s really funny. So I made this comment on Twitter one time. Barry himself, Barry Silbert is the guy running the Grayscale, and Barry responded to my question saying, “How in the world do these guys not have any competitors in this space?” Barry responded and he said, “And you know what? No one has made an offer to us to try to buy us either.” And I was just … It made my eyebrows go straight up like, how is that even possible? How are the BlackRocks of the world watching his assets under management on this trust just exploding and they’re not trying to buy it or compete with it? I just cannot understand it.

Preston Pysh (00:19:33):
And I’ll tell you what. If anybody is listening to this and you feel like you have a good inside scoop as to the why, please, please, I beg you, tweet at Andy and myself to let us know so that we can pass it out to the rest of the audience and people listening and they can all understand the rationale.

Andy Edstrom (00:19:50):
My impression of Barry, and I don’t know Barry at all, is that he’s been pretty clear about creating a holding company structure in perpetuity basically, sort of a Berkshire Hathaway-type structure. I don’t know if he’s going to ever go public or not, but I think he’s indicated that he’s taking a long-term view on these things. So I’m not sure that people think of him as an asset seller, as a guy who’s exiting positions. My impression of him is a long-term builder. And so in that respect, it doesn’t shock me that nobody has made an approach at him to divest Grayscale, not least because Grayscale is so core to their business.

Andy Edstrom (00:20:28):
And again I’m not aware of any transparency into DCG, but I have to imagine that Grayscale is the cash cow that’s driving the bus, that’s supporting … That plus Genesis plus the trading desk that’s supporting the overall structure while he’s getting to make more venture-type bets in investments that aren’t necessarily going to be cash flowing the short term but are supported by these other cash flowing businesses like Grayscale.

Preston Pysh (00:20:55):
So the ticker for what we’re talking about here with Grayscale is GBTC. I’m sure most people are familiar with the ticker. Andy, talk to people who are hearing this who maybe have GBTC in their accounts, where is it an advantage, where is it a disadvantage? Talk to us about the ins and outs, the pros, the cons, everything.

Andy Edstrom (00:21:15):
So as we know, bitcoin trades 24/7, trades 168 hours a week. So GBTC only trades 40 hours a week because it basically trades over the counter on the stock exchange. So that’s a disadvantage in terms of your liquidity and availability.

Andy Edstrom (00:21:31):
Now, on the other hand, if you’re a human like me and not an alien, not being able to trade 24/7 may not be such a disadvantage because sometimes people do dumb things when they try to trade around the bitcoin position.

Preston Pysh (00:21:45):
I like where you’re going with this.

Andy Edstrom (00:21:47):
That’s a double-edged sword. When you think about being able to exit a position, if you’re talking about your bitcoin exposure like, hey, I have to peel some off or it really moves really quick and I got to get some liquidity, etc. If you want to get cash dollars out of bitcoin, you got to go through the exchange system, at least as a retail guy. If you’re large, you can go over OTC desks, over-the-counter desks, but similar concept. Getting your dollars out, as we know with the major exchanges, sometimes they go down. Sometimes they have problems with their banking relationships.

Preston Pysh (00:22:24):
When you say they go down, describe what you’re talking about because some people might think, what do you mean they go down?

Andy Edstrom (00:22:29):
That’s right. I’m talking about literally you can’t sign into your Coinbase account. You literally can’t access your money, so you can’t trade out of bitcoin into dollars, and also you can’t wire money out of your Coinbase account into your bank account.

Preston Pysh (00:22:45):
But it’s down for how long? A half hour or something is what you’re talking about like the internet that their servers are down, right?

Andy Edstrom (00:22:53):
Right, exactly. Their servers are down. I think the last outage was more than half an hour. I think it may have been hours, but don’t quote me on it.

Preston Pysh (00:23:01):
And some exchanges are known for these outages where others aren’t.

Andy Edstrom (00:23:06):
I think that’s fair to say.

Preston Pysh (00:23:07):
We’re talking about Coinbase.

Andy Edstrom (00:23:10):
Exactly, which is shocking considering how long they’ve been in business that they don’t run a tighter ship. Anyway, so that’s another potential disadvantage. And so if you’re an investor, you might say, “Okay. I want to hold the bulk of my bitcoin in cold storage, which, if necessary, I can move to the exchange and liquidate and hopefully wire to my bank account if I have to. But on the off chance that I don’t have access, maybe I want to hold some percentage in bitcoin trust, in GBTC.” That would be an example of a scenario in which you might do that.

Andy Edstrom (00:23:47):
Another advantage for somebody potentially is they just don’t want to deal with an exchange. They don’t trust them or, I don’t know, somehow they can’t figure out the interface. I have older clients that are not very tech savvy, not very computer savvy. It’s just easier for them to hold a security basically in their brokerage account. That will be another reason to hold it instead.

Andy Edstrom (00:24:11):
Another reason to hold it, which is maybe not a great reason, is the premium has been pretty persistent historically, although it’s been falling lately, there may be opportunities to buy when the premium is quite low and even trade out at a larger premium. You got to be, I don’t know, either clever or lucky to get the timing right.

Andy Edstrom (00:24:29):
There have been periods in history when bitcoin has traded down, the premium disappears, goes near zero, basically into the single digit. I’m talking about on premium to net asset value, i.e., normally you pay, whatever, $1.20 for a dollar’s worth of bitcoin if you buy bitcoin trust, GBTC, but at times, you only have to pay $1.05, let’s say. And when you get to recover in the bitcoin price then often, the premium goes higher in GBTC and you get effectively some extra juice on the upside. Again, that’s a trade. That’s not something you want to count on, but there have been times when it’s paid off in the future.

Andy Edstrom (00:25:06):
So long-winded answer to your question, but those are some considerations and reasons why one might want to hold the bitcoin trust maybe in addition to a core bitcoin portfolio or as a substitute.

Preston Pysh (00:25:19):
How about from an IRA standpoint?

Andy Edstrom (00:25:22):
IRA is a very good perspective. I personally have one of these LLC-structured, self-directed IRAs where I can buy bitcoin outright basically an exchange account, but it’s a pain. There’s a bunch of steps. You got to do a bunch of paperwork. It costs a lot of money. Relatively speaking, it costs quite a bit of money. And so there’s all those reasons not to do that and, yeah, it’s simpler. You got IRA money. It’s already there. You got your, whatever, your Schwab account, your Interactive Brokers account, your TD Ameritrade account, and you just buy GBTC and much, much simpler than going through all the brain damage of the self-directed, LLC-structured that I had mentioned.

Preston Pysh (00:26:07):
Do you have people that come to you and say, “I think that fintech is going to be huge. I think that bitcoin or something like it is going to just revolutionize the way that banking is working, and I want to have exposure to these companies. I want to own companies that are emerging in this space, but I’m not necessarily interested in owning bitcoin itself.” How do you respond to that person and what kind of guidance do you give them?

Andy Edstrom (00:26:31):
The framework that I often see is the picks and shovels analogy, right?

Preston Pysh (00:26:36):

Andy Edstrom (00:26:36):
The service providers. And part and parcel of that oftentimes is the diversification argument, like I don’t know if bitcoin is a winner so I want to own the company that’s got exposure to all of crypto. Okay. That was a stronger argument a few years ago, in 2017. Even then, bitcoin looked pretty dominant but there was some doubt. Now, there isn’t much doubt, so it’s a weaker argument I would say.

Andy Edstrom (00:27:02):
Now having said that, when I look at the stock price, I look at the chart of Square, it’s pretty impressive. It is very impressive. PayPal has done well too, not as well on the percentage basis, but arguably that’s just because they were already a pretty sizeable company. Square has narrowed their lead, closed the gap on PayPal in terms of valuation. But yeah, these companies have done really well.

Andy Edstrom (00:27:27):
So there is a reasonable argument for fintech exposure. There’s no doubt that these guys are taking a big bite out of the banking system in general. I get that argument. For me, the thesis on even just digital gold is clearer than that in terms of valuation, but I don’t begrudge somebody who comes with that perspective and looks at the banking system and says, “This thing is a dinosaur. Smarter, faster, leaner software-based companies are going to take a chunk at it,” because that’s true. That’s going to continue.

Preston Pysh (00:28:03):
All right. So we had a bunch of questions from Twitter that people wanted to ask you. One of the ones that I liked was talk to us about how you think that game theory is going to play out from here.

Andy Edstrom (00:28:13):
Yeah. Are we talking about just in general in terms of adoption and companies and governments and all that stuff?

Preston Pysh (00:28:18):

Andy Edstrom (00:28:19):
I’ve said before that I think bitcoin has already won, and we could take the easy path or the hard path, and I think we’re on the easy path. I think that it gets broad adoption.

Preston Pysh (00:28:29):
Why do you think that it’s already won? First, explain that to us.

Andy Edstrom (00:28:33):
Yeah. I just think it’s too hard to kill. I do think that it has reached … As Michael Saylor said, maybe said it on your pod, “It’s already reached well over $100 billion in value, and everything that is network native, that is internet native, that has reached that valuation has been dominant.” And we’re well past that. We’re almost even in order of magnitude bigger than that with bitcoin. So that’s one thing.

Andy Edstrom (00:28:57):
Two is just, obviously, when you delve into the network topology and you understand proof of work and the incentives, it’s hard to imagine that something else is going to beat it.

Preston Pysh (00:29:10):
Because you have so many minors and so many rigs just globally distributed and that network effect that it’s using, SHA-256 and all that, that’s what you’re saying with that?

Andy Edstrom (00:29:19):
Yes. And then of course, additionally, just the additional layers being built on top, the exchange infrastructure, lightning for micropayments, the wallets, the integration with the major fintechs like we’re talking about with Square and PayPal, which is relatively recent, all this stuff. Bitcoin is so entrenched. Money is a network effect concept. It’s a protocol. So all those reasons, I think that bitcoin is already the dominant internet native hard money. And as we know, when you dematerialize things, like Saylor says, basically it will dominate the world. So it will be the world’s hard money, and then the question is, well, will people want hard money or soft money? And I take the view that they want hard money.

Preston Pysh (00:30:07):
For savings.

Andy Edstrom (00:30:08):
Yeah. And that’s a fair point too, which is, is it money or is it not money today in its current form? Yes, it’s a good saving vehicle. It accumulates value over time. Is it good for transactions? No, it’s not good for transactions. Does that matter today? No, not at all. Will it ultimately be transactional money? Yes, if it reaches its potential. And in the meantime, it’s just a monetary asset similar to gold, although better than gold as you know in several key ways. And so, yeah, in the colloquial definition of medium of exchange across space as opposed to medium of exchange across time, I would say today, bitcoin is not good money but it is an investible asset that is on its way to becoming very good money. In the meantime, yes, it’s a good store value. I might have lost the thread on the original question. Well, you asked, why has it won already?

Andy Edstrom (00:31:06):
So now getting to how the game theory plays out. I’ve actually been surprised at how easy the path has been relatively. Regulatory barriers are falling away. I think people in power in the United States and other western countries and frankly across the globe realize that the thing can’t be killed, and it is real important that the powers that be realize the thing can’t be killed because then they probably won’t even try, and that seems to be the path we’re on. So you’ve already got … Obviously, you had adoption by individuals, then you had family offices. You had a little bit in wealth management but not a lot. And then, hello, the corporates showed up, the insurance companies showed up. That surprised me. I didn’t expect to see insurance companies show up in 2020. And so who’s left? Pensions are left. Governments are left.

Andy Edstrom (00:31:56):
And each of these categories of asset manager or asset holder or investor has its own set of facts and circumstances and limitations, and they have its own timeline and their own adoption curves. So they’re all separate adoption curves piled on top of each other, and they all have their own timelines, but there aren’t too many filters left or there aren’t too many new pools of capital where there’s literally zero allocation, but then again, we’re still super early. Even with the hedge funds, we’re early. With the corporates, we’re clearly very early. With the insurance companies, we’re early. With the pensions, it doesn’t seem to have even started. And with governments, we don’t know whether it’s started or not. It wouldn’t surprise me if it had. But that’s where I see it going.

Andy Edstrom (00:32:44):
So eventually, I think every entity of any significant size will make an allocation, and the rate at which they do that will be different for each.

Preston Pysh (00:32:55):
Brandon Lien wanted us to talk a little bit about why we’re seeing so many companies adopt it versus money managers that seem to be really fighting it. At least on Twitter and the ones that I’m seeing, they’re fairly negative, but you see a lot of business owners that are all about it. So what’s going on there?

Andy Edstrom (00:33:13):
What’s going on, Preston? How come you figured out that you could buy bitcoin years ago and it started stacking?

Preston Pysh (00:33:20):

Andy Edstrom (00:33:20):
Here’s my answer, and it’s a great question from Brandon. My answer to that is corporates have, for the most part, nothing to lose and everything to gain from adopting bitcoin, and money managers are the opposite. In a world where I can store assets in a non-inflating monetary asset, that’s bitcoin, store value there, I don’t have to “beat” inflation by going to great lengths to have a diversified portfolio and invest in fixed income and invest in equities to beat inflation, just to sprint, to stand still in terms of my purchasing power. If bitcoin reaches its potential, I can just sock it away in bitcoin. And that will be bad news for the whole investment industry on average in terms of fees generated, in terms of assets under management. Bitcoin reaches its potential, it’s going to take a big bite out of all these businesses, including mine.

Andy Edstrom (00:34:21):
So that’s my answer, is the wealth managers, they have quite a bit to lose. The corporates really don’t, as long as they’re running a tight ship, as long as they’re running their businesses, generating cash flows, like you’ve talked about on this show, and then accumulating bitcoin and socking away their retained earnings over time in that manner.

Preston Pysh (00:34:42):
When you think about how a business functions, they’ve got some type of machine or thing that’s generating free cash flows. That’s one of their assets that sits on their balance sheet. It kicks off those free cash flows, and then what do you do with the free cash flows? You either invest them in marketable securities. Maybe you buy another one of these machines so that you’re producing twice as much revenue and bottom line. But at the end of the day, a lot of companies get pegged out at a certain point that they can’t employ their retained earnings and those profits in an operational way and they have to do it non-operationally. And so Michael Saylor is a great example of somebody who’s like, “I’m just plugging this money that I made into the bitcoin network. It’s not impairing any of the assets that are generating these profits that I get every single month and quarter.” And so it’s a no-brainer for him.

Preston Pysh (00:35:30):
But the other thing that I think is an interesting point for money managers, and I’m curious to hear your thoughts on this, Andy, is I think the volatility piece. I’ve said that money managers, they’re not only managing the money but they’re also managing the clients as much as they’re managing the money to try to make sure that the assets under management stay and don’t go somewhere else looking for some other manager. And so when you look at something like bitcoin that has a ton of volatility, I would say it’s more this than maybe even the volatility. It’s the narrative that you’re in bitcoin. The position could be 0.05% but if that person has this implicit bias of if you’re in bitcoin, you have no idea what you’re doing because that’s funny money, and they pull their funds, that’s a catastrophic event for a money manager.

Andy Edstrom (00:36:17):
So you’re spot on that the optics, as we say, right, the optics-

Preston Pysh (00:36:21):
Yeah, the optics.

Andy Edstrom (00:36:22):
… has been very tough in bitcoin. So it’s a funny thing. For my clients as an example, I have made and my firm has made optically bad investments from time to time, and it’s always an uphill battle. I’ll give you an example. We bought Puerto Rican bonds I want to say four or five years ago, and this was after the whole capital structure basically had fallen out of bed. Everybody thought that Puerto Rico and the various government-related municipal entities were going to fold. We found a bond issue, several bond issues actually that we’re guaranteed that were backed basically by one of the bond insurance companies, and it happened to be the bond insurance company that had the strongest balance sheet.

Preston Pysh (00:37:05):
I think Toby Carlisle put on this exact same trade. He talked about it on our show. What was the name of that?

Andy Edstrom (00:37:10):
Oh, really? Love it.

Preston Pysh (00:37:11):

Andy Edstrom (00:37:11):
And it was a great trade. My recollection, it was 5.5% or 6% yield, triple tax exempt. No local tax. No state tax. No federal tax. So on a pre-tax basis, that’s like buying a bond that’s, depending on your tax rate, yielding 8% or 9%. Pretty juicy. So that was a great investment for us, but, man, we had some pushback because the headlines were relentless. Puerto Rico is going down. This thing isn’t solvent. Government is going to have to step in. Bond holders are going to get torched, all this stuff.

Andy Edstrom (00:37:46):
So similar dynamic with bitcoin. The good news is, well, there’s been two ways to mitigate that. One is if you bought it and it went up, that always helps. It always helps to be staring at a gain on the quarterly report rather than a loss. Amazing how that works. And the narrative has shifted, obviously. It has been a dramatic shift in my estimation between even June of last year when bitcoin was still, I don’t want to say toxic waste, but let’s just say smelly from the perspective of the client. And now that it’s been bought and many smart, well known regular way finance people and investors have said they’re long or bullish, that has changed the narrative significantly.

Andy Edstrom (00:38:30):
So now in 2021, I do actually think we’re in a position where you have to explain not having a position, at least if your client has heard of bitcoin, which is probably most at this point. And that was not true six months ago.

Preston Pysh (00:38:46):
Talk to us about position size. For me, the Nasdaq is the benchmark to beat if you’re pretty much investing anywhere. That for me is the thing that you really got to be able to outperform to say you’re really beating the market these days. And so 43% last year is just nuts. I forget what famous investor just produced something like 14% returns last year, and I was beating him up on-

Andy Edstrom (00:39:11):
Was it Paul Singer of Elliott Management?

Preston Pysh (00:39:13):
Yeah, it was Singer, 14%. And I’m saying, well, that’s a significant … It’s nearly a 30% underperformance of the Nasdaq. And so if you would plug in 1% or 2% of your portfolio into bitcoin and you would have that 14% return, what would that have bumped you up to last year?

Andy Edstrom (00:39:35):
Oh, yeah. Well, so what, so bitcoin started the year at 7K if I remember.

Preston Pysh (00:39:40):

Andy Edstrom (00:39:40):
And then we ended it, where did we end it?

Preston Pysh (00:39:43):
A little over-

Andy Edstrom (00:39:44):
At 20 or something?

Preston Pysh (00:39:45):
Yeah, I think high 20s.

Andy Edstrom (00:39:46):
Yeah. So maybe it was 4X. If you had 1% position, then you added 300 basis points to your portfolio. Is that right?

Preston Pysh (00:39:55):

Andy Edstrom (00:39:55):
You get 2% position then you added 600 basis points or six total percentage points to the portfolio, which is pretty significant. And getting to the sizing, because we didn’t talk about that with your last question, which is, yeah, sizing is the thing. This is a fallacy that I encounter over and over. People say, “Oh, there are certain assets that are un-investible.” No. Actually, there’s no such thing as an un-investible asset. There’s only portfolio sizing.

Andy Edstrom (00:40:22):
Now, as a practical matter, most extremely risky investments don’t trade in public markets, so you can’t put 0.04% of your portfolio and VC bet A or a risky tech bet B. But with a publicly-traded asset like bitcoin, you can size it as you wish. And so yes, 1%, 2% of the portfolio, a no-brainer in my opinion. When you get into double-digit percentages, then the client better be really comfortable and they better really understand the volatility involved here. Those are the things that I think about.

Preston Pysh (00:41:03):
I quickly did the numbers. So if you had a 2% bitcoin position last year and your normal performance on the rest of your portfolio, for the other 98%, was 14%, if you had bitcoin in there for 2%, you would have had a 21% return. But let’s say bitcoin went down by 50%, you would have moved from a 14% return to a 113% return. So it’s a pretty aggressive difference to the performance and very asymmetrical. I think the number is on an annual basis, since bitcoin has been openly traded, was it, Andy, like 200% a year on average?

Andy Edstrom (00:41:43):
Yeah, it’s in the 200% range. I believe that’s right. Amazing.

Preston Pysh (00:41:48):
It’s unreal.

Andy Edstrom (00:41:49):
Granted, in all fairness, as we know, the log scale graph is downward sloping over time. So were the percentage gain is higher in the earlier years? Yes, they were, so maybe you’re averaging, whatever, 400% or 500% a year in the early years, and so in the more recent years, it’s only been 100% to 200%, but that’s still pretty good.

Preston Pysh (00:42:12):
How do you think about when a person comes to you and says, “How much exposure of this should I have?” I’m sure you’re looking at their age and their risk tolerance and those things, but how would you respond and how would you categorize the type of people that you would respond to?

Andy Edstrom (00:42:29):
So you might be surprised about the demographics or the age or how close are you to retirement, and here’s why. Take the extremes. So when we talk about “risk” in the portfolio, when we talk about your normal basket of assets, generally speaking, you’ve got your stocks, your equities on one end, and then you’ve got your low-risk bonds, your fixed income on the other end. And there are various other asset classes mixed in, but those are the main buckets as you know.

Andy Edstrom (00:42:56):
So what does a sizeable or significant bitcoin position mean to a risky client? Well, it means they want to swing for the fences. They want to make that 300% return in a year or more potentially, so they want an allocation. But now you’re talking about the low-risk portfolio, which is very skewed to bonds, and what is the kryptonite for a bond portfolio? Well, that’s inflation and higher interest rates. It’s inflation that causes the central bank to raise its rates potentially. And so if you have a bond portfolio and we finally get significant inflation, then your purchasing power gets torpedoed, and you better hold some hard money assets. I use the term hard money assets for a portfolio. And historically, that’s been gold and monetary metals, but as we know, bitcoin has characteristics that are more favorable even than gold, and so, yeah, you better hold bitcoin basically at either end of the risk spectrum there.

Andy Edstrom (00:43:56):
And so I can make a pretty strong case that everyone ought to have an allocation, and it tends to be beyond say a couple of percentage points in the portfolio, which is effectively hedge, then it’s more I’d say the folks that have a little bit higher risk tolerance and really understand it and really don’t care that much about the volatility, which is a smaller subset. It’s those guys that go with a larger allocation or a larger allocation to bitcoin that makes sense in my experience.

Preston Pysh (00:44:25):
So what’s the number?

Andy Edstrom (00:44:27):
Let’s put it this way. I have very few clients who are double-digit percentage exposure, but for the vast majority, we’re talking 2% to 3% basically.

Preston Pysh (00:44:39):
Yeah. Based on the numbers we were talking earlier, that’s going to have a profound impact on your portfolio, even if you have a small percentage of your portfolio in it.

Andy Edstrom (00:44:48):
It really will have a profound impact if bitcoin starts to demonetize other risk assets, if we get to that point where people stop viewing Apple as a store of value and buying it for 40 times earnings and starts to think that, “Oh, actually, maybe I should market in this other internet native store of value asset.” That is the scenario where actually bitcoin potentially takes a bite out of the Nasdaq. You’re talking about the QQQ a minute ago. It takes a market share bite out of the Nasdaq, accrues to bitcoin. Will that happen soon? I don’t know, but it could happen in a period of years. We’ll see.

Preston Pysh (00:45:35):
All right. So, Andy, any time we’re in a big bull market with bitcoin, there’s a lot of fear, uncertainty, and doubt, otherwise known as FUD. What is some FUD you’re hearing right now that you just want to take a jackhammer to?

Andy Edstrom (00:45:50):
I’ll tell you what I want to get past is the tether FUD. Blow up tether. Tether, please blow up. Everybody go redeem your tethers. By the way, I’ve never held tether myself. Not even for a nanosecond have I ever held a single tether. Let’s all redeem our tethers. Let’s see if it’s really backed, and let’s just get this thing behind us. Let’s get it over with. I’m so tired of it.

Andy Edstrom (00:46:13):
I think the hypothesis that tether is a major reason for the bitcoin price going up, in the long run, seems tenuous, seems unlikely. And I think that fear among investors, institutional and retail, this overhang basically that comes from the existence of tether, I think if we removed it, in the long run actually, bitcoin might potentially be better off. And I do get tired of spending time thinking and talking about it.

Preston Pysh (00:46:48):
Well, there are so many other stable coins out there. Most of the exchanges are standing up their own stable coins, but you’re still seeing tether being widely used, which suggest to me that the exchanges that are using tether in addition to maybe to their own stable coin, they don’t have a concern or else, they’d be redeeming them. Right?

Andy Edstrom (00:47:08):
Yeah, that’s right. You have to say that … And in fairness, it’s more the offshore exchanges rather than the onshore ones, rather than the US-based ones or the western ones where tether is prevalent. And some of those guys are relatively fly by night operations, I guess, although frankly, some of the smaller exchanges have dropped out over time. Some of them have gotten hacked. Some of them have disappeared or, I don’t know, exit scammed. Others have been acquired. And so, yeah, I think the remaining field of sizeable offshore exchanges probably want to stay in business, and they probably have some idea of the counterparty they’re dealing with. And yeah, I don’t think that they want to … I think they’re smart enough to not risk their long-term business by taking counterparty risk and risk to their enterprises of this thing effectively going poof.

Andy Edstrom (00:48:05):
Look. I’m not saying that tether is fully backed. I don’t really know. I don’t really have much idea of how many dollars are backing the $25 billion worth of notional tether. But I don’t think it’s a very significant probability that it will be a big long-term risk to bitcoin.

Preston Pysh (00:48:26):
So talk to us about risk because everyone, anytime I ask for questions, everyone wants to hear, how could you be wrong, what are the things you’re concerned about, what are the things to look for?

Andy Edstrom (00:48:37):
Yeah. Well, I think on Twitter when you asked what questions to talk about tonight, one of the questions that was mentioned, I don’t remember who it was, was basically what would change your thesis? What would cause you to sell bitcoin? And there’s a couple of things that come to mind. One is the system stops cranking out blocks regularly. It stops working. Okay. Well, if it doesn’t stop working, what else would cause me to not want to own it? I guess government rectitude, balancing budgets, not printing so much money. Even then, I still think that bitcoin has a long-term value proposition but maybe it’ll take longer to realize.

Andy Edstrom (00:49:15):
So those are the two scenarios. Basically, if the thing stops working or if the competition for money or monetary assets gets stiffer. Other than that, it’s hard to come up with ideas for why to sell it when it looks so severely undervalued still.

Preston Pysh (00:49:34):
How about if, and I don’t think this is going to be the case, but there’s a lot of people that will say Ethereum or some other coin starts, the market cap starts really making a run at bitcoin? How would you respond or how would you think about something like that?

Andy Edstrom (00:49:48):
Yeah. I remember the old flippening narrative from 2017. Ether is going to flip and going to overtake the coin. Yeah. How would I respond to that? If the question is what do you do or what do you talk about if the market cap gap starts closing, I think for me, it would have to overtake it for a significant period of time for me to be at all concerned about it, and it would also have to be based on facts and circumstances. In other words, as long as ether is planning to change out their [crosstalk 00:50:21] mechanism.

Preston Pysh (00:50:22):

Andy Edstrom (00:50:22):
Exactly. Their consensus algorithm. Until they actually successfully do that, it’s really hard for me to see how on a risk-adjusted basis it has a chance of overtaking bitcoin. Really hard to see. And then that doesn’t even account for the fact that the blockchain has bloated and it’s all run on Infura and there’s still clear leadership and all that stuff that make it not decentralized compared to bitcoin.

Andy Edstrom (00:50:48):
I don’t know. If there was a major change in demand, if for some reason Michael Saylor was like, “No. I was wrong. Ethereum is the thing,” and governments started buying it instead of bitcoin, then maybe I’d scratch my head and say, “What did I miss here?” But, yeah, it’s hard to see that playing out.

Preston Pysh (00:51:10):
What are your thoughts on PlanB’s stock-to-flow model? And he has two models. He has the cross-asset model as well, the stock-to-flow cross-asset model. What are your thoughts on those?

Andy Edstrom (00:51:22):
It’s been a while since I did my statistics work back in college and then even since the CFA program. I’ve seen the arguments about basically how you don’t have true randomness in the variables, in the correlation and that basically the correlation framework is invalid, so I’m aware of the critique, the mathematical critique. My friend, Cory Klippsten, has been all over that. I suspect he’s right about the math, if he’s right about the assumption about the randomness among the two variables.

Andy Edstrom (00:51:59):
On the other hand, I have to stay that stock-to-flow as a concept seems to be logical. The model may be wrong, but the concept seems right. I can even go so far as to say that it’s not bullish enough in the sense that if I knew that the stock-to-flow of gold and bitcoin are about the same now, then I’d struggle to come up with a reason why bitcoin isn’t worth as much as gold or more. And the argument is, well, it takes time. You got to change minds and gold holders have to shaken out of their positions over time into bitcoin.

Andy Edstrom (00:52:36):
But yeah, if you’re looking for the strong view on S2F or S2FX or not, I’m probably going to punt, I think it’s interesting. I think it could have a self-fulfilling dynamic in the sense that if enough people believe it to be true and if the numbers keep following the pattern and the expectations, there could be a self-fulfilling element to it. That’s one way to think about it. But yeah, I don’t have a strong view.

Preston Pysh (00:53:06):
So, Andy, Fold is really hitting it hard on Twitter just with the user community, not with advertising or anything like that. They’re offering bitcoin rewards on any type of transactions. So you’re using your fiat money, you get paid your paycheck, you go and spend it with a regular Visa debit card, you go to Target, you go to Walmart, and after the transaction, you’re getting bitcoin rewards. What are your thoughts? Where is this going? Is this just the tip of the iceberg on what’s to come? What are your thoughts?

Andy Edstrom (00:53:40):
He’d love to see it. Will and the Fold team, those guys are great. They have a great product. It’s one of the wedges into bitcoin adoption. There’s all these angles. You can make it easier to buy bitcoin outright such as through Square cash. You can figure out ways to give people rewards, credit cards or debit cards. And yeah, the idea that Fold had about finding ways to direct traffic at vendors and then get rewarded by the vendors and shovel bitcoin into the pockets of users is great. It’s a great way to accumulate automatically over time. It also reminds me of the … I forget. There were a couple of debit cards or credit cards where … I guess it was debit cards where you buy something and they basically round off and give you free money. But here the money is the good money. It’s not the crappy fiat money. It’s bitcoin. It’s the hard money. So I love it.

Preston Pysh (00:54:46):
I was listening to an interview with him recently, and he was talking about how when people want to redeem their rewards, these are on-chain transactions whenever he clears their accounts and sends it to whatever wallet they’ve got. And he was talking about how the fees associated with all those payments that he’s got to make when people want to clear out their rewards wallet was getting so high that it was going to force his adoption into lightning. And I just found that really fascinating to show and demonstrate how vendors like him, companies like him are going to have to be forced into something like that lightning in order to conduct their transactions. So my question really is around lightning. Where do you see other areas where the incentive structure is going to be in place for them to adopt it?

Andy Edstrom (00:55:39):
The clear case is just smaller payments, just micropayments, and that’s been on people’s minds I think for years now. I would like to see, and I do think there’s a good chance that we’ll see, the whole dynamic where anyone creating content, whether it’s podcast, whether it’s articles, whether it’s videos, whatever, TikTok type of stuff, will be able to get paid, be able to get tipped via lightning, and where it just becomes normal basically. If you’re a content creator on the internet, you have your lightning wallet. You have your lightning set up. You can accept payment in that regard. And the pools, the liquidity providers that are basically greasing the rails and balancing the channels in lightning in the overall system are going to make that potentially possible.

Andy Edstrom (00:56:29):
And I like the angle you described for Will and Fold and him “getting forced on to the second layer.” That’s all good. That’s all good for bitcoin. It’s indicative of high demand on the base layer, and that’s a healthy thing. That’s a healthy proposition. It indicates that the base layer is in rude health when there’s so much demand that basically lower value transactions get pushed out on to the second layer.

Preston Pysh (00:56:58):
I want to talk about the TikTok comment real fast because people are going to laugh. I have no clue how TikTok works. I just know that there’s these young kids, they’re taking videos and stuff of themselves and then they’re making money through doing this. They get tipped, like you said? Do you know how it works, Andy, or are we just two [crosstalk 00:57:17]?

Andy Edstrom (00:57:19):
I don’t have a TikTok account. My only access to TikTok is people on Twitter obviously sometimes forward their TikTok videos.

Preston Pysh (00:57:28):
Do they get paid? Do you know?

Andy Edstrom (00:57:30):
I don’t honestly know. I have read about in parts of Asia, you ought to know … I was thinking of Korea because Korea has been so smartphone savvy for so many years, and they’ve had high bandwidth for a long time. Weren’t you stationed there?

Preston Pysh (00:57:48):
Oh, yeah. I lived in Korea for two years.

Andy Edstrom (00:57:50):
Yeah. So I had heard that performers in Korea were actually getting paid in real-time, and I don’t know via what app. I’m not aware that it was via lightning or anything crypto-based, but I had heard that that was the thing already in Korea, but don’t quote me on it.

Preston Pysh (00:58:08):
Yeah, I think they’re compensated. And I might be dead wrong about this, but I think they’re compensated by likes and basically other people interacting with their account. They get some type of compensation for that. You definitely don’t have that with Twitter or anything. So if you’re talking about micropayments, instantaneous micropayments, that seems like that would be the platform or a platform like that that it will evolve into.

Andy Edstrom (00:58:36):
Totally. Why can’t you have streaming money? We have streaming voice and streaming video. Why can’t we send very small payments in real-time? It doesn’t seem like there’s a technical limit to this. And I’m optimistic that the lightning will be the thing that actually brings it to the masses. We’ll see.

Preston Pysh (00:58:55):
That’s totally crazy. Andy, you’ve got a killer book. So killer you’ve got 90 reviews and a perfect five-star ranking, which I’m just going to tell you, I have some books that I published. They don’t have a perfect five-star ranking.

Andy Edstrom (00:59:11):
You’re very kind. I want to say, by the way, before we talk about that, over the weekend, I hadn’t been aware of it prior but I heard about your book, Diary of a West Point Cadet, and I ordered it and I read it.

Preston Pysh (00:59:24):
Oh, no way.

Andy Edstrom (00:59:25):
And it was awesome. It was chock-full of hilarious stories with life lessons.

Preston Pysh (00:59:30):
Did you actually laugh out loud or did it not take you that far?

Andy Edstrom (00:59:35):
I laughed about your friend, Mitch, who got away with murder until he didn’t and then ultimately did. That’s a great story.

Preston Pysh (00:59:43):
And if you knew him, let me tell you, if you knew Mitch Rosnick, you just would not believe … There’s a lot more stories about Mitch that are not told in that book, when we went to flight school. And, okay, yeah, I remember one story I told in the book. So Mitch was an all-American pistol shooter. And, wow, let me tell you, there are some stories of us in Alabama during flight school out in his backyard, shooting a lot of different guns through the years.

Andy Edstrom (01:00:09):
Oh my, god. Yeah. I could only imagine the PG-rated stories that made it through the editing process, there’s got to be more behind-

Preston Pysh (01:00:18):
They were edited down. They were definitely edited down. All right. Back to your book. I appreciate that, by the way.

Andy Edstrom (01:00:24):
No. So anyway, it was a really easy read and it was a pleasure, so people should check it out.

Andy Edstrom (01:00:30):
Why Buy Bitcoin is the book, and it’s investment thesis and it is also in my opinion pretty digestible. Yeah. Look. I shill it relentlessly, but people have been giving it good feedback. And it was both the thing that I felt I had to write for my clients and for my family and for my friends, and as long as I was going to write it, I was going to put it out there for the benefit of people who are trying to get their head around bitcoin. And I guess the unique aspect is I bring some … Speaking of stories. I have a few stories from my time on Wall Street, which are relevant to the overall financial system that are buried in there, and they’re a little bit different than the stories about your friend, Mitch, but hopefully some entertainment value as well.

Preston Pysh (01:01:20):
So we’ll have a link to that in the show notes. Andy, awesome having you on the show. We definitely need to do it again some time in the future, and thanks for coming on.

Andy Edstrom (01:01:29):
Preston, man, it was a pleasure. Always happy to do it. Look forward to doing it in the future. And, yeah, I guess one final thing, if anybody wants to follow me on Twitter, hit me up on @edstromandrew.

Preston Pysh (01:01:42):
Hey, so thanks for everybody listening in to the show. If you enjoyed the conversation, be sure to subscribe to the show on whatever podcast app you’re using. We’d really appreciate that. And if you have time, leave us a review. So thanks for joining us this week, and we’ll catch you next Wednesday.

Outro (01:01:57):
Thank you for listening to TIP. Make sure to subscribe to Millennial Investing by The Investor’s Podcast Network and learn how to achieve financial independence. To access our show notes, transcripts or courses, go to This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.


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