[Applause] Hello welcome back to our channel i'm your host tommy and we make videos about personal finance investment strategies and everything in between if you'd like to get more updates and join our community of like-minded investors check out our newsletter discord and telegram channels links will be in the description belowOn today's episode of the bottom line interview series i guess started off his career as a game programmer taught himself how to compound wealth by saving and investing and now it's a full-time finance youtube room with over 70 000 subscribers kelvin welcome to the show yeah thanks for inviting meHey guys i'm kerwin if you haven't subscribed to me you subscribe to me it's nice to be it's nice to be out um so today's interview is focused around crypto specifically and as we all know uh crypto stocks have been uh sorry crypto markets have been crushed uhRecently so we hope that this interview can help to address some of the fears maybe concerns that crypto investors have out there but we also go through some comparisons with the regular stock market so kelvin uh let's start off with our experience with crypto how did you startUh investing is it was it with bitcoin how do you learn to invest things like that so actually for crypto uh it's nothing it's nothing grand like i just started i started around 2020 during the bitcoin palm from what twenty thousand all the way to forty fifty thousandUh the reason i got in is it just because i promote there wasn't any real research done when i throw my money in so i would consider that as a speculative trade uh but over time in 2021 i started researching more about bitcoin because that was the one of the hottest thingThat was taught about that year like countries were adopting bitcoin uh companies were adopting bitcoin so uh so when i did my research i found that uh it really has some merits to uh bitcoin and it's not just a worthless asset like what many people think like what whatever thingsLike for example like third world countries the effect is much greater for example it has against inflation because their currencies are like growing a few hundred percent a year other than that it also allows you to transfer money very quickly and at a very low fee so i think bitcoinIt does have some potential to sort of replace fiat currency but probably not replaced entirely so yeah those are some of the benefits of crypto right yeah i agree actually so a lot of people on the crypto community have either very extreme views like either crypto is the future orCrypto is actually complete garbage and i think the answer is obviously somewhere in the middle but towards which side it's leading to is where you need to do your own research and decide whether it's worthwhile as like an alternative transfer mechanism uh compared to fiat with all the heavy feesAnd is crypto something that can be used in the future as some kind of uh capital for you to take on loans because i think that's where bitcoin is actually moving towards is no longer like a digital goal but more like pay some collateral you can use bitcoin to invest in otherCrypto projects convert to eve and e can also be used as collateral for other projects so yeah that's like a general overview for our crypto journey so moving on let's compare crypto with uh stocks so with stocks right it's quite straightforward you can read the ipo prospectors or you can read annualReports earnings calls things like that there's like a step set rule that at least for u.s stocks the sec mandates that companies do certain things report using uh get numbers but with crypto right a new project can take many forms uh most of the time people talk about what's their missionWhat's their white paper what's their economics these are the few metrics that people look at how do you compare uh mr research seemed like similar in terms of effort so i would say the research is very different for company what i would look at is the financialsFor crypto what i would look at instead is the community the community is the most important part uh so let's say let's use luna for example i know that luna already gone but let's look at luna for example the reason luna grew to such a big crypto was because of his communityPeople who buy into luna the people who build projects on luna and the roots who are talking about luna so all this gives luna value so without all this so right now no one is uh has the confidence in luna right that's why luna failed you can say that theThe whole thing was triggered because of ust debagging and because of that people lost confidence in luna for it to even grow in the first place there must be a community behind it so same for bitcoin the reason is the top crypto right now that is because countries and companies are adopting itAnd that gives value to bitcoin and probably like those coins not many people are using it yeah they are mainly using it for harm and gun purpose i would say most transactions are not used in real world right not like oh i split me with you let me sendYou some gold it doesn't happen very often speculation speculation so without any real use case for it a crypto will not be able to grow right so yeah that that's that's the difference between stocks and crypto right okay i actually i can share my experience also soI have invested a little bit in cro before the debacle where they actually remove a lot of the rewards from part to their debit part so this this i think that's what kelvin you go back to your point about community like the reason why such a coin can have value is notBecause of the technology but rather uh how many adopting people are actually using the debit cards for day-to-day transactions because they prefer getting crypto back instead of say reward points from other alternative parts so i think just to add on because of community you can't value community soThat's why people say it's hard to value crypto one good way to value crypto is by looking at the total value lot which is basically the number of the amount of money that's pouring into that crypto itself so for example ethereum if you go to a website called defy lama you canSee that the total value is going up because more and more projects are building on to ethereum for example like very big the game as infinity Some crypto exchange even layer two solutions right yeah like polygon as well i think this those are countered as tvl for ethereum yeah so the layer tools are also all this contributes to the value of uh of the crypto la and if you look at luna the tbr hasDropped drastically because people are pulling money out of it so i would say that if you want to value crypto don't look at the price look at the tbr instead it's a much more accurate representation of the value i'm not experienced with this but i know there are like growingNumbers of different metrics what they call on chain analytics where you can they're trying to basically come out the equivalent of a pe ratio but for for crypto so maybe tbl divided by the marketplace one example as a way to know okay it's relatively undervalued but the problem with that isAt least with stocks right companies will give guidance so they'll say okay next year we're going to make 20 profiles and the guidance if it's very similar to what other analysts say you maybe have some level of confidence that you went straight too far say twenty percent isn't gonna be like two percentRight unless something major happens like a political issue or maybe the law change right but with crypto there's no such thing as a forward guidance i think that's where it gets tricky as a crypto investor so then you have to solve the information yourself it's actually like harder in aSense right to figure out where's the tbr going to go for this for this point yeah let's move on to our nfts so uh obviously there was a you can say it's a blue man pass right where like everybody was basically doing all the degenerate stuffAnd running all kinds of nfts for a moment there and then the inevitable crash and kind of like everyone kind of saw is happening but nobody can time it right so but do you think that in the long term nfts have relevance in terms of art realEstate other forms of digital assets and i know like you were a game programmer uh before right and a lot of mmorpgs actually have been using digital access they have real world value for a long time like if online and even like gold trading or world war things likeThat so where do you see nfts coming in do you think they can have a co-exist with traditional digital assets so the thing about nfp right now is that it's almost entirely a cash grab like the bot yeah apes club uh the irene dao rightI would say that a lot yeah you can see that it has a lot of uh it unlocks a lot of club membership or whatever but if they are that good the price would have crashed so much so right now people are just using nfp as a form of speculation rightBut going forward i would say that it really has real-world user so one very easy example is in games where you can exchange items sell items uh to another player uh that you maybe you have farming like imagine world of warcraft you can after you have some for that sword you canSell the sword to another guy right they'll make it much more valuable and people probably would not sort of waste their time playing the game in a way because in the end you can pass that thing onto another person so outside of the game sector there are a lot of use cases forNfps for example your nric because it can be validated so so you can just maybe scan the blockchain or whatever and or another example house ownership so if you want to pass this house to another guy you can just sell the nft to the other person and this nft will have value andImproves your ownership of the holding line so i think nft do have a place to play in the future but right now i would say that it's just experimental phase so that's why we see all these uh fluctuations going on right i think nfts need to figure out theSo an nft usually exists in one single blockchain i think it's not figured out like how are we going to inter how it can be interoperable let's say between ethereum and cardano for example so how would you if you put your will or your title dOr nrc on one blockchain how can you be sure that it will work in other blockchains as well i think that then becomes a bit trickier and it becomes more of a technical problem now uh what if it exists in both and then one of them has an earlier timestamp and thePrevious one so which one is it like how do we resolve uh assets from that but i think those things can be solved yeah technical challenges that a lot of smart people are working on that's my belief that a lot of talent actually move from the traditional economy and are now interested inJobs in crypto i noticed that among my own friends and colleagues as well so there is interest in that so the talent is there but it will probably take a lot of time for for the industry to mature and energies become part of our daily livesRight another thing i want to add is i think nfts are useful for liquidity provider tokens as well so in the real world right you you have a brokerage that controls the pool of stocks coming in and out right they have their order book and stuff like that butThen in decentralized finance you are able to in a uncensored manner participate in that trading that trading pair so let's say between the eve and btc trading pair you can you can provide some liquidity by providing a mixture of both ethereum and coin and then what they give you is an nftLiterally what they give you is this token and an ft that says hey i own 0.001 of this liquidity proof so any fees that were charged when someone is doing an exchange pair uh comes to you so that's to me that's one of the interesting use cases for nspI'm sure you'll see a lot more yeah in the decentralized yeah we'll see more real use case size instead of just picture and next year yeah okay uh moving on kelvin let's talk a little bit about web 3.0 and purpose and gaming because i think these three are heavily linked togetherSo uh you mentioned that you played uh infinity another like when you play to earn types of games do you think the concept of having good mechanics social aspect and governance applies the same way your so i would argue that a normal game and and an nft game there's almost no differenceTo it it's just that nfc does more crash crap hashgraph for the developers and the players so nfp game obviously must be fun i remember there was last year there was one game the neko ino it was he called itself an nfc game but in reality it's just a ponzi schemeWhere you when you invite a friend and you earn five percent every day because you invite him and if you have ever so it's five percent every single day if you are if the game is very good you will be everyone will be millionaire by now so which obviously wasn't so the gameCollapsed or rather the developer ran away right so back to the question uh nfd game obviously must be fun but but now that he has a real money tied to it if the game becomes more sort of uh investment rather than playing it for fun right so i'll use theSc infinity as example when i started last year i found out after playing a few times i found that the reason anyone would play the game is just because they wanted to earn money right and not because they find the game fun but if i want a funGame i would just play like candy crush or whatever okay but the reason i'm playing essie infinity is just because i want to earn money so after a while it becomes a chore trying to play the game every day but of course i think sc infinity is a very earlyDefinition of nfd games uh there are much better games right now and so going forward i think that some probably successful games could be like mmorpg where you can farm items and carry off uh or maybe you have land right this kind of stuff so that's where nfd comes inSo do you think that the roi on your time for the games used to be a major criteria like you played 1850 for six hours you expect certain x amount of dollars and because you don't get that anymore it's no longer fun so the the earning potential is part of the funWith the game and there will be nft games that are fun just for the sake of it okay so i think some people will find it earning money fun now but if you ask me i would prefer working at a real job because it gives higher pay than a game right soYou have to go back to the roots of player game the purpose of playing a game is to have fun and if i have to earn my livelihood through playing a game then it really becomes boring to me especially if i have to keep doing every single dayAnd if i like start at the game then i will not have enough money to buy my telephone or whatever i think that's a good point actually and it says that it tells you already that at the moment at least nfts have a limited audience so for example somebody who needs aStability someone in their 40s who have a family they'll still prefer to have a full-time job as their main source of income we can't rely on nfcs to earn money of course this story might be a little bit different because we speak from a place of privilege maybe inOther countries that may not be the case and people there are not enough good jobs out there so nfts provide an alternative that's just one argument you can make for it so maybe another argument is that yeah like you say nft games benefit the people from poorer countries whether currency exchange is muchWeaker stronger where the currency exchange benefit them more probably another one is where for students who are not earning money right then this is a good side income for them or they are studying because other than studying you are you are playing games so might as well earn money from itBut for people who are who have a new full-time job like a programmer yeah you're working at a job eight hours a day you're coming back you're not possibly going to work another four hours just to earn a few dollars so then another thing about nfc games isThat it's very sensitive to uh changes so there are two changes one is the currency the crypto price change where like uh the slp for safety has been dropping so what your earnings have been dropping every day then the other one is the game developer change so uhProbably like the meta that rebalance the entire game and suddenly all of your items are worthless so and rebalancing is a very natural stage of games like it happens over years right like actually it never ends or at least rpgs there are always class changes mechanics changes over timeI mean it's also difficult for the developer i think first now when they now they have to consider the economy when they make a mechanic change i just imagine myself now in the game industry where not only when you care about the game balance but you care about who are the whales whoGets pissed off because you make this change and things like that so it becomes a very challenging balancing act from everybody's side involved in the game yeah so i think those are the challenges of uh infp gamer and that's why i think nfb game it comes and goes all the time nowLike you just just for normal games the longest running game is probably like pokemon world of all craft and i would say that they have to keep coming up with new versions otherwise the franchise would die off yeah so actually the way i look at it isThe nft is like a fundraiser right the people who buy the tokens raise the funds initially for the game like kickstarter but then now they have to use that funds to effectively create new content so you can continue to grow on this skill market share from other games things like thatSo what you're betting on if you are trying to invest in nfcs is whether that developer has the ability to use the capital allocated to create better content and rivals and yeah yeah the other way to look at is if you just think the game is fun thenYou don't take it too seriously the game is like extra bonus income if he makes money otherwise just thing about game developers is that they come and go all the time like in singapore i remember seeing when i was going for interview i was i have this entire list of companiesWhere i can submit my interview application and just five years later like almost half of delhi already and i believe more will be dying every year or something so it's just the big companies that will survive or this kind of i would say cutthroat industry so that's why if you really want toInvest in nfe games i would say go for the bigger games so they don't end up with a worthless piece of crypto in the end like uh i remember microsoft buying blizzard was because they wanted to build a meta wars which would translate to nfd gamesUh ubisoft i think is also going into the direction And for japan nintendo i think they are also planning to launch their own metalworks or nfc game so yeah i would prefer to go play the bigger games rather than smaller games which are going to die off quickly and anyway right yeah make sense so the same rules apply umYou would more likely play a triple a title and more rpg than some some some guy who made it by himself you know not to say that there isn't great content out there but i think you have to be like a lot more careful when you decideTo put your money into a lesser known nft yeah our nft game than you know the big players yeah let's move on to crypto's future i think this is something that everybody thinks about especially when they look at their portfolio get crushed i don't know 60 70 80So for me personally i think um on off ramps into the currency and to the real world it's the biggest challenge right now it's not easy to explain crypto to everybody still despite many years of trying to improve the user experience and things like that what's your opinion about crypto'sFuture what does it need to become more well adopted and sort of complimentary with the traditional finance i think to your point right uh crypto is not easily adopted i could say the same thing for stocks like if you ask any update drinking coffee at the coffee shop now noI would bet that like 90 percent of them don't know how to even buy stocks right so so they end up buying snapple pools uh so for crypto is the exact same thing they don't know how to buy crypto but uh i think it's just a very simple step youJust need to watch a youtube tutorial video which i have right to to learn how to buy crypto but i think a bigger challenge there are fewer so so last year 2021 jamie and i had done a survey as to why people hadn't picked up crypto yetThere were three main reasons the first one is lack of knowledge and understanding like even warren buffett cocoa is not advocating for crypto and if you're a person who listens to him uh you will likely not pick up crypto already second uh market is too volatileNot many people have the stomach to see their portfolio go down by 50 in one week alone or even go to zero like luna so um for those people who like very stable investments they will definitely avoid crypto altogether uh especially right now when crypto is still at this experimental phaseEveryone is still trying to see what crypto can do so unless this kind of thing improves like bitcoin i know that last time bitcoin used to drop like 18 90 percent over a few weeks but now crypto is bitcoin is much less volatile and much going forward when more peopleBuy and hold uh bitcoin bitcoin will be even less volatile so i would expect adoption to increase later on but for now it's still very shaky then the third reason is lack of regulation like uh luna everyone was we won crypto because we won we don't want anyone to control our crypto theyMay do not crash like oh who is going to save us let's throw in some regulations we need some fbic insurance to us so even though people don't want crypto to be regulated i think crypto needs regulation he really needs regulation otherwise people are going to get scammedAnd encounter losses almost every week there was a statistic i agree actually also to that point right um one bad nft game creates a bad reputation for the general market so regulation is actually good for the companies that are actually good because you don't get your reputation spoiled bySome black bed players you get a rock booth here and there you can sort of like a reputation is very easy to i think i can't remember the same but basically it takes like 20 years or something to build your reputation right it takes only five minutes to throw thatSomething like that that's the same so i think the same thing applies here um we want regulations so that that doesn't happen to them for the market you throw away the reputation and then it takes another 20 years to do that that's not what we want and actuallyThere's a risk if you want to invest in crypto can the regulation come in in a time so that investors are protected in a sense yeah so i would say it's a compromise law uh you want regulation but probably not too tight um because in the end crypto is still aboutDecentralization or whatever yeah and right now you have to depend on yourself to keep your own self safe by doing on due diligence but definitely uh some regulations will be useful like uh to sub-project maybe you need some qualifications or whatever to start yeah i think it depends on the use caseSo i agree so when the use case is quite straightforward this is this is a service or this is a funding that provides the public the game then it should be regulated the same way other games are but if the purpose of that token is actually to be uncensorable then itBecomes very tricky because like philosophically the whole point of crypto is that it's unregulated that nobody can say i can't transfer from a to b this amount of value i think that's where it gets very tricky and maybe crypto might be continuing to split into two differentCommunities the very pure race kind and then the kind that want to want to work together with the authorities in a way even if you ignore regulation at the very least the crypto project needs to be uh authenticated in a way i know that for cardano in the future they will beRequiring projects to be verified before they are listed so probably that would be that will help investors all of these challenges right now are preventing people from adopting crypto so do you think crypto has a place to complement a portfolio for someone who's like let's say have a 10 2025 year kind of investing horizon or do you think it's better to stay away until we have more visibility on how these regulations are cheated like if you were starting out now would you go off or would you would you put a small percentage of i would say it depends it's like it'sLike chicken rice do you want soup with it or without soup that's that's no right or wrong right if so probably it tastes better so for crypto with it you might probably get a higher return but you risk losing at the entire part a bit it if you're not careful but even withoutCrypto i would see i would still say that the portfolio can do well so it just depends what kind of return are you looking for so i'll just speak for myself uh i like crypto because i'm from the tech industry so i believe that crypto do have a placeTo play in my own portfolio so the my strategy is just to invest in the top few cryptos like bitcoin ethereum so those are just the few uh which i'm willing to place my bet on all the rest i i will ignore see yeah because i can'tHandle that kind of volatility if i like volatility tesla is already there for me so actually for me i'm similar to you i only invest in like the major coins but the reason is not so much about volatility but rather like the search time required to understand the volatility in other coins becauseThere's always a story behind abortion you don't go why did they crash 60 overnight it's not unlikely that it's just because of algorithmic trading usually it's not that big so requiring the time to research why does this uh point behave this way it's very time consuming and i justThink that there's a bigger roi to research a stock for example so i know that i can read through and report begin x number of hours but i can't do that necessarily with arbitrary coin because it depends each coin is different and then maybe something stronger than that yeah andDifferent people will show different coins and each of them have their own story so like which one are you going to look at luna is dead those coins is there also is that yeah right and tomorrow there will definitely be another new coin just look at coin market capCoins get listed every single day so i i don't have the time to look at every single coin so i'll just stick to one the ones stay at the top because uh they have more value in terms of probably total value log and community so yeah they're they're the safer betsFor me so in conclusion we think that our sort of paraphrase what we have in conclusion we think that for crypto to have more adoption there needs to be more regulation so maybe when a new client gets listed certain kind of requirements like ipo prospectors in place will helpUh prevent a lot of dubious maybe cash grabs that you say or rock pools in the future and that will make crypto a lot more investable i think so i'll be looking out for news that brings on that for me to allocate a bigger proportion of my portfolio toCrypto so at the moment i'll cap it at a small percentage and i may increase it if i hear news about that kind of regulation what do you think actually prospectus is quite similar to a white paper i don't think it will help that much uh i don't know what the most importantThing like uh do you think reporting that makes more sense like with for companies us companies that get content practices how do how do crypto companies can they report their earnings like what kind how how do they maintain their points are they distributing it to either private shareholders public shareholders and maybe anotherAllocation to maybe funding new projects i think they do some some projects do expose what is their pie chart of the capital allocation but maybe making that building that into law will change things okay so that will help but i don't know like returning back into a normalCompany instead i think that's the rate so how fast yeah if you regulate it too much will crypto even have any differentiating factors in concern it does become a company that's distributing crypto right as their main business so i don't know i i can't i currently i can't admission how a regulation forCrypto would look like i will let the experts i mean i think the experts should come from the crypto community themselves yeah maybe even enough time and voting power they can come in and be part of that regulatory body but then that's like the biggest problem right government regulation willCan destroy that just in a moment so it's back to are you willing to take that risk there is a background risk that all crippled investors have to accept if you are chasing a certain double triple digit kind of return so for meUh if you are not that big of a hurry to make such current returns and it actually makes more sense to stay invested in the stock market actually i say that if government regulations ever do come in you'll be very rare to ever see that kind of double triple digits anymore simply becauseIt's much more safe and because it's much more safe it's less riskier and hence the returns will be much lower already so regressions are good personally i i like a bit of revelations but not too much too much uh is it mainly because you want crypto to be a different shape different productYeah a different body a different product yeah correct so in conclusion um for people who have invested in crypto in recent times and are feeling the pain right now we hope that this information can uh provide you with some insights and maybe help you to weigh your decisions in theFuture why are you looking out for people to be adopted so instead of being disheartened i think it makes more sense to continue learning rather than whether the market is going up or down because there's always an opportunity for that yeah by the dip [Laughter] so thanks kelvin for your time it wasReally fun chatting with you yeah thanks for inviting me yeah see you so guys outside of the game sector i think there are some merits to nfd for example your nic because it's not easy to You