Wake Up Call (11.12.24): Kristin Stroud & Matt McClintock

welcome back to another episode of wakeup call before we get started please like share and subscribe to onr Media channels to receive the best Bitcoin education and content in the industry and also be sure to check out our latest research report titled Bitcoin the emergent asset class has arrived this is a three-part series aimed at introducing important Bitcoin Centric Concepts to the institutional allocator world part one available now and Linkedin the show notes explores bitcoin's volatility and why it is a uniquely desirable characteristic of the asset that can boost returns and dampen volatility in traditional portfolios wakeup call aims to educate Financial professionals on the merits of the Bitcoin investment thesis how this asset class represents both a threat to Legacy Financial Service businesses and an opportunity to differentiate on themselves to retain and attract new clients hosted by Mark Connor onr's head of global macro strategy and Rich Kerr onramps president of managed wealth this weekly show seeks to provide Financial professionals the wake-up call they need prompt them to have an open mind with respect to bitcoin rethink their prior assumptions become more educated on the topic and learn from others who are already further down this path wakeup call is live streamed on LinkedIn every Monday morning and the recording can be found across onramp media channels now time for the show all right well welcome to uh Tuesday Morning's wakeup call I think we're really excited today to be joined by Kristen stoud who is the founder of digital tax Council uh who works with all sorts of clients and especially kind of focusing in on the family office space and and then we also speaking of family office are are joined by Matt mentok who is the founder and and executive managing director of bespoke group um and they have a registered investment advisory bespoke advisory uh so we couldn't have two more distinguished guests to to join us on a post ction show couldn't be more thrilled to have you both so welcome uh and thank you for joining us good to be here yeah yeah it's great to have you and you know this is a very uh very exciting show and we were having some fun in the Green Room uh prior to launching the show today because obviously we've got you know significant news that has come forward over the course of the past week with a uh you know the 2024 election results uh starting to finalize I say starting to finalize I think we' still got some um you know things that we need to sus out and make sure that everything is what it what it's looking to be um so Mark is going to talk a little bit about uh the postelection results and how onramp is thinking about things but at the same point in time we had an a spectacular weekend um in Bitcoin and uh it was really quite fascinating to watch I was um lucky enough to to have a little vacation uh with my family and and uh and uh of course both my daughters and my and my wife are were just thrilled um to be watching you know the Bitcoin price Discovery uh as it was unfolding and yesterday was quite a quite an interesting day for those who are joining us on the show I'm sure that you were um having similar experiences as as our family so with without further Ado I just uh kind of kick over to Mark um Mark get us started here and and then we'll let Matt and Kristen uh you know uh be the stars of the show that they are perfect all right well let's go pick up uh where you just left off about the weekend the price move so today's Tuesday we haven't had a full week of digesting the uh Trump presidency win but for the next two or three minutes we're going to talk about um about Bitcoin its price it's adoption as if the election didn't even happen but it did so we think it pulled through some of the price action that we expected prior to the election what you're looking at here is the on-ramp terminal and this is a pretty big wick up so this is the biggest dollar move as Rich alerted me in bitcoin's history um was yesterday it was about a 10 10 12% um 12% move I think um at one point intraday but just to let you know on Sunday night couples were talking and it moved up to 80,500 and I was like wow this is really what we call Price Discovery we may be moving in an area where people are exploring what the next level is and commodities always enjoy this well that was Sunday night at 10:00 8,600 it it Wicked up to 88,000 uh I think 500 yesterday so yes a lot is a foot the game is a foot as as we like to say um but let's go back to Tera Firma prior to the election at the beginning of the year um I put out a report at my previous firm where we said let's look at 2024 to me 2023 was about a Changing of the Guard we called it from cargo shorts to federal courts SPF is out judge R's decision of August 29th um set the foundation for the um cc to be forced effectively to allow the Bitcoin ETF so three things were going to drive price in 2024 uh according to many people including myself the Bitcoin ETFs it was a lock given judge ral's decision on August 29th and still even though we had a strong opinion was going to happen we didn't know that Fidelity and black rock would have ETFs that would get to1 billion within months 44 days and 73 days respectively versus the previous fastest of 10 billion was a JP Morgan ey shares um not I it's JP Morgan um trust that took it took two and a half years so things happened faster and then now last week we just found out that the ibit ETF has more Assets in it than the Black Rock ey shares gold ETF that was launched almost 10 years ago so this is happening faster than we expected and we're still jesting and this is really kind of even without the election and the second one is about the having the Bitcoin having happened in April and we are just in that sort of convex part of the of the curve where it takes off you know in that kind of six to 18 months after the having um Jesse Meers um my colleague here at onramp which is my colleague wrote about it last night that has nothing to do with the election it is Bitcoin blockchain specific and that is incredibly important because Bitcoin was built to be outside the system so that's why we're belaboring the point about Trump and what's going to happen which we will speak to but the groundwork was laid for bitcoin's Price appreciation and adoption regardless of who took office and the last one is about fby so we have the crowd here to answer these questions on tax and and and compliance but the Faz be allowing um fair value accounting was something that we thought was going to be big we all know micro strategy uh took advantage of that to the tune of a 440 per gain on the Year by adopting a Bitcoin standard on their book but Micro uh Microsoft is also entertaining it so this is a whole point about from cargo shorts to federal courts we've gone from kind of the grifters to the adopters to the institutional engagement Microsoft is considering adding Bitcoin to their balance sheet in the form of a vote next month that was not on anyone's bingo card as a kid say so we've talked a lot about what was happening without the election but now we're going to switch it to say the election does change everything as well by having the house likely and the Senate and a republican presidency um some of the bills that are put in place like Senator lumus doing a Reserve can happen so I'm well through my 3 to 5 minutes rich thank you for not giving me the hook but I just wanted to say the election matters it's a it's a advanced Tailwind but holy moly we had a lot in place without it are you ready to secure your future with Bitcoin at onramp we're revolutionizing how you can save for retirement onramp has just launched the industry's first Bitcoin Ira product with multi-institution custody designed to give you unparalleled security trans transparency and peace of mind with onramp you can verify your assets on chain and protect them with the support of three independent institutions reducing risks and enhancing security at onramp we believe that Bitcoin is the most important asset of the 21st century the hard part is securing it right there are shortcomings with keeping your coins on an exchange but also with setting up your own self- custody arrangement onramp sols for these concerns our multi-institution custody solution maximizes security and minimizes counterpart party risk ensuring that your Bitcoin remains securely in your possession and provides built-in inheritance planning to ensure your family is protected as well onr provides peace of mind for your Bitcoin Journey whether for your whole stack or for part of it as a complement to your existing self- custody setup for more information about our services as well as our new Bitcoin Ira product check us out at onramp bitcoin.com so I'll kick it back to our Stars here Matt and Christian to say on your side what do you think any of the potential tax or compliance or wealth management issues have changed with the election and which ones are are not affected unless Rich you want to sort of hand off there because you're better splicing the two maybe we'll start with Kristen what are what are some of your observations and thoughts oh so this is going to seem like I'm being pessimistic and in light of all of this um new and good news uh I I certainly don't mean to seem cynical but I think as we discussed this we need to keep in mind kind of an underlying premise that it takes a while for things to happen in Washington and even with a unified Congress presumably that's what we're going to have um and like I don't think that that's happened since maybe 21 the first Biden's first term um even with a unified Congress and and the president being you know of the same party uh it things the tax regulations don't just get formulated and adopted overnight and so while I think it's very important to think about these things just keep in mind as we're talking about them that um I think president Trump made a lot of um proclamations of what he wanted to do and given what we think the house and the Senate will look like that is a reasonable possibility uh but will it get done in four years I mean four years is a relatively short amount of time right um but I do think that it's very encouraging that he is pro Bitcoin uh it's interesting I actually saw this morning for all the accounting nerds out there the um aicpa National Tax conference is going on right now um and uh Maya mcin is is um the chair of the um what is it committee for responsible federal budget I think and so I had not heard this take yet but she said tax policy may not be as high on the Trump administration's priority list so that's kind of an interesting takee because I really thought you know given a unified Congress and that this is a a green light for him to get some stuff done um so we'll kind of see where that goes um I think everyone expects that yeah let me let let me let me interrupt interrupt you real quick because I think you're that's an interesting I that kind of surprises me too um yeah you know largely because I think that you know if you if you were to pay have paid attention to the campaign messaging that had come along right the no tax on tips the no tax on overtime the no tax on on uh Social Security benefits things on that nature it seemed to me that that there was an illusion um or he was alluding that there was going to be a fairly significant um you know tax reform in some way shape or form uh so I'm somewhat surprised by by that U you know nugget that you're sharing yeah and you know I don't want to speak out of term because obviously I'm I'm not at the conference right now I did not I'm just reading this from um The Tax Advisor but I think she was also a little bit surprised and I think we all expect that so tcja the tax cuts and jobs act that was put in place in 2017 when Trump was in office previously I think most people most tax practitioners expect that now that he is president-elect that a lot of those Provisions that were going to expire will be extended um and and so I certainly that you know I don't think that anything has changed with that it just uh I think one thing that that he may run into is this pressure of the you know the tax cuts are going to add to the deficit and we all already know that we've got this astronomical deficit and so yeah I I think that it will be interesting to see how much he he can get done um in in in for years but and I don't mean to be pessimistic I just want to if people think that oh you know January 1 things are going to change I mean obviously that's that's not that that you all think that but I think that there are some people who think yeah let's go it's going to happen immediately yeah I think I I agree with that Kristen um a couple of thoughts here I mean first of all nothing happens in Washington quickly and I think that is a feature not a bug frankly um the uh the reality is he doesn't have they don't have the Republicans don't have four years they have two right that's right because in two years the entire house is up for re-election onethird of the Senate is up for re-election so that means you know with you know assuming that the Republicans have locked in the house which I haven't checked the numbers but it seems like that's where where we're going um we've got there's a two-year window where the Republicans will control both chambers of Congress and the White House they've got to get a lot you know if you look at Trump's wish list from the if you look at his list of promises his his list of priorities is as long as my arm is you know it's you know everything is the top priority you got to pay for that stuff and um we see runaway deficits runaway debt you got got to pay for this somehow I I do agree that we're get I I think we will get some type of tax extension I don't know that it's going to be just a cart blanch extension of the 2017 Tax Act I think there's going to be some stuff around the margins um but it's got It's got to happen inside of two years at the end of the day first of all every every tax reduction act must pay for itself within a 10-year budget window so that means that no matter what happens it will be temporary it will be just like the 2017 Tax Act was temporary if there is a 2024 act or 2025 act or 2026 act it will be temporary the devil will be in the details and we have no idea what the time Horizon is going to be um so I think that to a certain degree um folks need to plan with this with the fact that the 2017 Tax Act will expire at the end of next month I mean at the end of next year sorry the end of next year so the end of 2025 the 2017 Tax Act just goes back we go back to where we were in 2016 um so the time for planning to take advantage under of the opportunities underneath the 2017 Tax Act that's like right now like right now um and the window is closing will will it be extended I think probably um but the extension will be temporary and they've got two years to get it done what are the what are let me ask the two of you I mean I when I look at tcja you know and what's about to Sunset I there's obvious implications on the estate planning side um you know that jumps out at me um you know I think that the bonus depreciation component um also jumps out at me uh you know will there be an extension of that uh to in Inspire small business in or incentivize small businesses things on that nature um but what uh what are the things that that are really on on the table from a planning perspective that people ought to be moving you know on right now uh knowing that that sunset said is 1231 2025 well I'd like to speak first from the from the high net worth individual perspective yeah I started so yeah this is kind of the Wheelhouse that we inhabit you know all the time especially in a world of $80,000 Bitcoin um when there are a lot more ultra high net worth people today than there were this time last week um in the Bitcoin space but um you know one of the features of the 2017 Tax Act was to double the uh what's called the basic exclusion amount or the the amount of wealth that an individual is allowed to pass under the federal gift and estate tax regime um without without paying tax so that the number in 2016 was $5 million per taxpayer plus adjustments for inflation the 2017 Tax Act doubled that from 5 million per taxpayer to 10 million per taxpayer again with inflation adjustments so that means means in 2024 the number is 13.61% Aries free of estate tax or free of gift tax the first dollar above that exemption amount is taxed at the rate of 40 cents on the dollar so 40% tax rate of every dollar above the exemption amount um the number next year is 13.99 so it's almost 14 million bucks starting in January but like I said the 2017 Tax Act will collapse under its own weight if it does not get extended by Congress and signed by President Trump so that means that we you know with barring a new tax law um the federal estate tax exemption will revert from 10 million plus inflation for uh plus indexing for inflation back down to 5 million for plus indexing for inflation there are a couple of Silver Linings in this deal mean first of all what Chris and I talk to our our friends and clients about all the time is that this tax exemption it's called the basic exclusion amount but this exclusion amount that you have is an asset that you need to proactively leverage while you've got it that asset will be cut in half by the end of next year or at you know after the end of next year so use that as an asset that's that's Silver Lining number one silver lining number two is that to the extent you shift value out of your gross estate from a tax perspective during your lifetime under the current tax law if the tax law does revert to a lower exemption in the future the the um transfers that were completed before the tax law sunsets those are free and clear there will be no clawback for transfers that were made during this 2017 Tax Act window so the exclusion amount that you have to plan with is an asset that you need to think about using strategically and use it or lose it uh and you know if you proactively use it the IRS cannot later come back in and say well now the tax exemption is lower you owe retroactive taxes on that um one thing the final thing I'd like to say before I kind of kick it back to Kristen for a second is don't be complacent about the planning process you cannot get a lot of really heavy lifting from an estate and gift tax planning perspective you can't get that all done in a weekend you've got it it takes months many months to get these strategies designed properly documented properly get the asset valuations done properly get the tax returns done properly and these strategies are often additive so one of the things that we do all the time when we're when we're designing strategies for clients is we talk about you know first you you start with just an outright gift and there are a lot of ways to structure those outright gifts they get complicated but you can but but they add leverage into the gift itself but you start with the gift and then you can often follow that gift with subsequent transactions in the form of additional structures in the in the form of potential sale transactions things like that but you can't do it boom boom you've got to let these things kind of mature let these strategies season if you want to stand a chance to withstand a review and an audit by the IRS uh there the law is complicated and the the cost of getting it wrong is Onan so um affluent people who are kind of on the brink or maybe beyond the federal estate tax exemption they better be planning right now because we don't know what Congress is going to do in 2024 2025 and Beyond but we know what the law is right now and we know that this law will expire at the end of next year they better be planning right now yeah and the one you just did a a g I'm sorry go ahead Kristen oh no I just and I the one thing that I the one thing I definitely want um people who are on the your audience to uh be aware of sorry my dog is like in here with me and you know the joy of a home office or I have my husband come get him um so related to these transactions and the immediate future and we can come back to this in a minute if that's better but is the unsexy Rev proc 202 24-28 for cost basis of digital assets and this looming immediate 11 125 like when we're talking about you need to be planning stuff like right now literally like today you need to if you haven't already talked to your clients about this um or you know or per for your own personal Investments people have us taxpayers have historically been allowed to use the universal method for accounting for their digital assets and so without going into a lot of granular detail there wasn't a um affirmative like permission to do this but it just wasn't prohibited and so for in terms of planning out your gains and tax planning you were allowed to not you didn't have to adhere to fifo for instance and I don't want to go into a ton of financial accounting and Bor folks but does come into play and it is very important in terms of you know planning your gains for the year planning losses Etc and essentially the universal method allowed you to pretend that all of your assets were held in like one account and you could kind of specifically identify and specifically allocate certain units or of basis to certain assets when you had a transaction and that's going away as of 1125 and so if you've heard people talking about cost basis and fifo and you're not going to be allowed to specifically allocate there is a safe harbor provision that rev proc 2824 provides for but you've got to get that on that now and you've got to do it before you know where are we now November 12th I mean so less than 60 days uh to get that done and that will be treated as irrevocable and so um in line with what Matt's saying there's this L longer term planning uh for next for you know in 2025 but then this is something if you're going to take advantage of this Safe Harbor and this I think I mean this has been in place for a while um I think since like June but people just aren't talking it's not sexy people don't want to talk about it especially when we got Bitcoin at you know 85k uh but but that's all the more reason that call one of us call your financial advisor call your Tax Advisor because you don't have much time to get that safe Harbor election in place yeah I think uh it's interesting that you mentioned that Kristen because you know when you and I first met gosh what was it four or six weeks ago um you had mentioned that and I was like I don't know that I had even heard anything about that so you're you're right I think it is a little bit under um under the radar if you will um so thank you for for sharing that with the with the audience um and if if you don't mind could you repeat what that is called so that everybody can kind of take a look into that and make certain that they're they're doing well by their clients and making sure that they're aware yeah so it's it's Revenue procedure 2024-25 digital assets and happy to share resources um in that regard and I'm kind a lot of clients recently reach out you know ideally and I probably should have given this background before I have historically done more compliance and I do a fair amount of Consulting now but I've historically done a lot of compliance and particularly International compliance because when I was in Big Four I did all International and so I'm easing into the like sexy world of M ment and the and planning right that's the stuff people want to hear about um but if you need help with like compliance or the nitty-gritty or you know that's stuff that I'm still doing trying to kind of phase out of that but right now it does become important and you know you got to get you can't plan without knowing what's going to be on your return and what you want on your return and so the the not the unfund portion you can you can come to me for that and you know I mean we really are kind of running out of time with it but I have been doing some oneoff ad hoc analysis Bas bases analysis for folks ideally it would be part of your larger compliance but given the short time frame if you need just some oneoff discussion we can do that yeah I think it's I mean here's the other side of that too is like um 85,00 Bitcoin does make it kind of an attractive sale price for some people you know I get that you know it's like people who have low bases Bitcoin you know look this is $85,000 per token worth of gain I mean that's some gravy and I don't I mean I'm not selling right now my clients that I'm aware of aren't selling right now um because we kind of understand where we are in the cycle at least we where we think we are in the cycle um but you know somebody's selling because a lot of people are buying so there's they tokens moving volume is high and so um there's a lot there's a lot of churn in the market right now which is a sign of a healthy Market but to the extent their individuals who are the owners of the tokens that are moving they need to be doing a couple of different things they need to be talking to people like Kristen to make sure that they're being intelligent about how they're allocating basis which again not sexy super difficult to talk about unless you've had a whole lot of coffee on a Tuesday Morning um but the other side of it too is they need to be thinking strategically from a tax mitigation perspective it's like all that gain is going to be taxable income they need to be planning to offset with some deductions either they've got some losses to harvest and if they're in Bitcoin they probably don't have a lot of losses right now to harvest um but they might have some other losses to harvest or they should be getting charitable they should be starting to get some philanthropy planning in on top of their wealth and that's one of the most exciting things we get to do with a lot of our clients um in the family office space um I've got the privilege of working with some ultra high net worth bitcoiners people who have you know High eight figures to high n figures worth of bitcoin and they become Mo some of the most philanthropic people I I've been privileged to know during the course of my almost three decades in this business um and it's you know to a certain degree it's just it's in their economic best interests to generate charitable deductions to help offset their gains but really much more gratifying than that bitcoiners that I get to work with they they they placed a bet early they they got into Bitcoin because they believe it's a a better form of money they believe it's this truly beautiful way of disintermediating financial transactions among free people and it just so happened that they got in in 2010 or 2011 and they were mining it with the GPU on their laptop and they ended up with thousands of Bitcoins it's like holy cow then Bitcoin did what Bitcoin does and it mooned and now they say well gez now I'm worth hundreds of millions of dollars this is not I mean what am I going to do with that kind of money really what do I what do what do I want that kind of money for I don't want to give it to my kids I'm not going to consume it and so a lot of people that we get to talk to say how can I make the world a better place yeah as a result of the wealth that I've built and we've been very fortunate to work with people who are making the world a better place directly because of Bitcoin um through philanthropy to help generate charitable deductions to then offset their gains uh it gets complicated for sure but that's what groups like bespoke is all about is trying to simplify that process and streamline it um and we work with people like Kristen all the time to kind of create like a um like the true like a what what operates like a single family office within the realm of a of a multif family office yeah yeah what a privilege right uh to be in the roles that you you both are um I'll say this I spent 33 years uh in traditional finance and and I loved the work that I had the opportunity to to do to the best of my ability but the one thing that I have to say is there's really something special about bitcoiners um as I've come to know them they're very similar to an raia in many respects they're very altruistic they're principled in how they approach things they're purposeful in their intent uh and to have that type of individual at the core as a client um I think is really really powerful uh and I don't know that many of the ra competitors yet have fully woken up to who these people are and and what really drives them and why did they find Bitcoin you know what was it about them intrinsically that allowed them to find Bitcoin uh because they really really phenomenal client um and we all all four of us get a chance to share in in in meeting these unique people and their great stories and and you know to be honest I think in many respects they're underserved in the marketplace um because people don't understand the complexity maybe that's a piece of it but I think it's also um recognizing that well gez just because you have Bitcoin doesn't mean that your planning needs go away in fact they're Amplified because the return characteristics of Bitcoin itself it's much more than that too though rich I mean it's like um it's not just the asymmetric dollar denominated return value of Bitcoin Bitcoin is a complicated asset it's it's difficult um it's a bearer asset which means it doesn't have a title it's digital it doesn't exist in the Physical Realm um it's infinitely portable it's almost not quiet but almost infinitely divisible it's part of that divisibility is how it scales so beautifully um you know down to the SAT but it's it's really complicated and we are still you look Bitcoin itself is 15 years old it's only 15 years old um and and really as we were talking about in The Green Room Bitcoin kind of in this current um kind of in this current um season of social Awakening if you will it's four years old bitcoin's Bitcoin Wicked down below $4,000 in March of 2020 so it's like to a certain degree a lot of you know and I've been in this game since 2017 so I you know I I was I came in right after the Block siiz Wars right after segwit um and so I've I've been kind of around long enough to know some of that history and I've bought Bitcoin every week since that point I've bought $188,000 Bitcoin I've bought $3,000 Bitcoin and then I bought like last week I bought $80,000 Bitcoin almost um but the as far as becoming part of the social fabric now or the Overton window I know Jesse talks about the Overton window shifting quite a lot the the Overton window is now wide open on bitcoin but traditional like uh professional service providers like CPAs and attorneys financial advisers family office folks they're just now starting to wake up to what Bitcoin is and unfortunately they're waking up to it in terms of an $85,000 spot price they say holy cow we've missed out on all these great returns and now they're interested because they see the dollar denominated value of it it will be a while before many of them understand what F what is fundamentally different about Bitcoin and what is fundamentally different about bitcoiners and what are their needs from a planning perspective and that's why people like Kristen and frankly people like me and my team who have been in the Bitcoin game long enough ideologically through the ups and the Downs it's like we you know we get it we've been here and the you know the JP Morgans of the world the Goldman saches of the world they're going to ape in because they're going to see um they're going to see a market opportunity but it's going to be inauthentic and it's going to be it's going to be poor service yeah yeah it's interesting I I spend a lot of time speaking with various custodians traditional custodians and they're they're they're really struggling um in many respects to try to understand their role uh in Bitcoin you know one how do we serve this client two how do we talk about this asset intelligently you know two you know three h how do we monetize um right you know what do we want to be in this space and I think that they're completely um you know disoriented um from one week to the next trying to figure out what is it going to be are we going to open up a casino here and you know uh or are we going to get specialized and and really kind of understand and have a point of view a deep point of view to share with clients and help them I you know I I I find uh you know the asset management side they're obviously moving into the ETF Direction um and and rightfully so and and I'm I'm glad that they're there and participating albe it I don't think it's the ideal solution um in terms of how to access it and you know but then you know there's companies like onr right which you know we kind of look at Bitcoin to the points that you brought forward which is this is a very complex asset um and it it requires a not only a way to enter the asset correctly but a way to secure the asset properly um that allows you to to mitigate against single party failures to allow you to mitigate against counterparty risks because they're going to be all over the place and so to the very best of your ability how do you take those risks and and mitigate them as best as you can and you know and that doesn't even cover off to what you were talking about which is the jurisdictional risk you know how do you disperse jurisdictional risk in a in a digital asset um so there's so many really complex things that live in this space that the people you know that are listening to this show um they they need to seek out guides and trusted people to actually have conversations with and that's one of the reasons why we're delighted that the two of you are here because you've done the work um and you have figured out I think in many respects ways to stand out singularly with your voice in the Bitcoin Community let alone traditional asset Community which you guys obviously are very very well versed in so rich I wanted to just jump in um on the on that note about what Matt and Christian are doing and highlight we kicked off about what the Bitcoin ETFs did and how it gave access to a broader group of people even though you know we think there are better ways to own it for for reasons we shared Fidelity started mining in 2014 they did the work they built their own custodian um operation they then um you know and then Black Rock same thing Black Rock spent time writing a white paper that no one looked at speaking about the asymmetry that you Matt highlighted so the returns were there but the institutions that are in it for the long run and for their own benefit God bless them they did the work to create the runway to support a business so they could all of a sudden have the fastest 10 billion ETF which they got this year with Bitcoin because they created it and what you folks are doing is allowing the individual and the mini institution to then get on board with this next phase of adoption and price appreciation as awareness increases to your point we're only four years into the public awareness of Bitcoin so yeah what you're doing is analogous to what the institutions did and they're they're benefiting from that um investment as well yeah and I think rich I think the point that you're making about the ETFs is an interesting one um you know I think the ETFs I'm trying to find the right analogy for them but it's like the you know maybe it's the gateway drug for people I don't know I mean bitcoiners understand that there's a fundamental difference between owning the asset and simply owning a pledge against somebody else's asset so you have a paper claim where you have exposure to the price um I will tell you that um we have a nuanced view of of the ETFs you know it's like um we own the underlying because we we want to own the asset we're long that asset um we're also opportunistic about the market price appreciation pathway that at least I perceive for Bitcoin and so um hopefully we can disclaim this and this is not like Financial advice or whatever but you know I liquidated a pretty successful position in a publicly traded Equity Midsummer I just I got lucky and found the found Nvidia early exited Nvidia around the top and I just went to a cash position on those Holdings and I didn't know what to didn't know what to put it in um and so it's like well I'm just going to sit on cash for the next 12 18 months and kind of ride out the the Bitcoin cycle or this you know the PO having cycle that I was anticipating and maybe we're at the eve of now but then I said you know that's kind of dumb um why would I sit in a depreciating asset like cash at 5% um when I think again not investment advice but I think that Bitcoin is going to do better than 5% over the course of the next 12 months and so I took that cash position and I went I just put all that cash in the in an ETF in a Bitcoin ETF and I was telling my wife yesterday it's Up 3 5% since I put that cash in there Midsummer it's like that's a better position for me than cash um I yes I'm long Bitcoin for sure but I'm also overallocated to bitcoin by most reasonable standards right and so it's like you know I can rotate out of the ETF I can rotate out within a trading day um I will not rotate out of my Bitcoin itself um and even if I did want to it's a bigger hurdle you know to take it across and exchange and do all that and move the tokens around think no I'm just I'm just long I'm long beta on bitcoin and that's that's great but you know the ETFs are an interesting opportunity for people who are new to the Bitcoin space want to at least experience the volatility for all of its ups and downs literally um and then hopefully that becomes the the pathway to say you know what it's been cool having price exposure to Bitcoin now I want to own the Bitcoin I don't want to rent my house anymore now I actually want to own one um you know and and hopefully as the Bitcoin ETFs continue to gain traction and we hear micro strategy adding more to the books we hear Microsoft maybe adding to the books we see Sovereign funds adding to the books we see Argentina Central Bank mining in the lobby of the Central Bank building we see Pension funds buying Bitcoin um people are going to say well you know maybe there's something to owning the app asset Beyond just owning a stock ticker that is correlated to the asset itself yeah yeah you know my biggest fear Matt um is oh I'm sorry go ahead Kristen well I just the one thing that I really would and I I know probably many members of your audience um already appreciate is this goes to the core of of onramp and I think why I have such an appreciation for you guys there are many ways to hold Bitcoin right as as we've all been alluding to and referencing and as people come in and as there is more mass adoption I think sometimes there's this uh you know they're certainly Bitcoin Maxis right and and I would not consider myself entirely a Bitcoin Maxi but there's kind of this OG way of thinking among a lot of Bitcoin Maxis of you know not your keys not your coins and has to be offline and has to be in cold storage and I think what Matt and I have talked about too is that there is certainly a place for that right um but as you're doing the type of planning that Matt and his team do and that I am also doing uh that might not be the most feasible means of of of holding Bitcoin and I there have been times and I think rich and you and I and Mark have talked about that maybe Bitcoin Maxis get a bad rep right uh because it's like they're maybe inflexible in terms of custody and storage and things like that and um as more people come into the space and adopt the asset I want them to understand that they're it doesn't have to be all or nothing right and you don't have to you can diversify even in terms of your custodial Solutions right that's where onramp definitely comes into I want to push back on this I I want to push back on this not your keys not your coins narrative by the way um because full disclosure I'm a sovereignty maximalist I mean I believe in sovereignty above everything else um H personal human sovereignty look not your keys not your coins which was pounded into my brain in 2017 2018 look that's cute and that was quaint it rolls off the tongue not your keys not your coins is a fun thing to say when Bitcoin is 10,000 bucks per coin maybe it's certainly super cute when it's 500 bucks a coin okay that's great because now we can you know when we're when we're using this as a medium of exchange to buy things on the Internet or to swap with each other for goods and services or whatever that's that's fine but now when Bitcoin has transitioned it's I think Bitcoin has elevated from a from a medium of exchange level of money to a true store value form of money yeah um and it's it's not that it's not that a hard money is all of its features at any given time it's it kind of follows a path it starts perhaps as a medium exchange then as more people are using that as a medium exchange the design of Bitcoin is such that it will appreciate over time because of its scarcity because it's because of its finitude um when the dollar is completely devaluing based on its its production rate Bitcoin is going to continue to go up in dollar denominated terms Bitcoin moves has moved by and large from a medium of exchange level of money to to now a long-term long-term store of value form of money gold is not much of a medium of exchange anymore gold is more of a store of value Bitcoin is just that you know on steroids really so now when we're dealing with an asset that has generational wealth impact not your keys not your coins that doesn't work anymore because if if you are your own bank that's the other addage is be your own bank okay that's great when the piggy bank when the total value of the piggy bank is maybe 100,000 bucks that's great it's fun you can try you can cross international boundaries with all your magic internet money that's great but now what if it's a million bucks what if it's 5 million or 10 million or 100 million bucks you don't want to be your own bank because then you know how how reliable is your transfer mechanism of the keys to that bank if you are the only one who has keys to that bank and you have a stroke at an inopportune time or you go down in a plane crash or you just get old and die well guess what nobody else is getting in that bank so yeah um things like onramp where you can have decentralized institutional supported multi- signature control so you don't have a single attack Vector that can put the family wealth at risk that is a huge natural evolution of key maturity in the Bitcoin space my I would make the argument that if you have more than call it load to Mid six figures worth of bitcoin single Sig doesn't work for you anymore you are no longer that's where your sovereignty will begin to break down and the other thing I want to make the other point I want to make which is a lot of what we say in the family office space especially around the estate planning context is if you if you have not done a intentional legally defensible privacy oriented estate plan you are not sovereign because when something happens to you you have that stroke you have a car accident you die whatever if you haven't opted out of the probate process the people that you love are going to be dragging you down to the county courthouse to get a guardianship appointed over you and some judge is going to a your laundry in a public proceeding and it becomes even more public after you die so you might be a bitcoiner you might be all about your sovereignty when it comes to the key material but if you haven't thought through a process that ensures privacy for your family you are not sovereign Matt I got work to do I got I got work to do you you you got me all fired up here that's my gospel man yeah you're you're killing it I'll share I'll share one more thing you know to the Bitcoin Maxi um conversation you know obviously I'm I feel that I'm somewhat of a Bitcoin Maxi although I I you know I I probably tone down the language a little bit cuz I one of my goals is you know in life is that everybody comes on board you know I want everybody to understand uh what you're talking about Matt which is you know truly being a sovereign individual um and you can't do that without sound money um and you know one of the things that that that I think that a lot of people lose sight of when they are a bit pointer is you have a responsibility to get other people coming over and you know as a human being right you have that responsibility but if you believe so strongly in the network and you don't care about people you still need those people to come on board well I can tell you flat out with working with hundreds of thousands of clients millions of clients at my prior firm there is no way that those clients are going to come on board and operate a very very small Hardware device not and I know that people will say well they will be they will be forced to learn what they're going to deny that as long as they can because it's not it's not it comes down to three three things right time to learn and understand Bitcoin time to learn and understand those devices inclination do I even want to learn about these things um and then you know ultimately time inclination and uh uh competency you know and that's that's the final piece of the puzzle and so if we are stuck working with the devices and that's the mode that you have to be in order to secure this asset well you know obviously you've got significant you know risks that that Matt just spoke to but let alone you you you've got people that are going to deny it for the next five years um you know if not longer and so why would you want to begrudge people that the other piece is you know we now have retirement plans that are coming online um and you know should we really be owning and Kristen smiling and nodding I see but you know should we really be you know controlling these devices that have these assets and there's some question and debate around that and and you know do we have a a proper arms length distance over those uh over that control um and and and frankly let's be honest what are the chances of losing that device you know and well yeah you could go and buy a new one but what if you lost the the 12 or 24 you know seed phas or they malfunction I mean I have just lose your retir yeah like yeah it won't power on sometimes so I mean it's not yeah it's not about scaring people but it's about thinking through a little bit deeper right it everything needs to be thought through a little bit deeper um and that's you know part of the beauty of of of the Bitcoin Journey um on my side is I feel like you know what I thought was was true um you know a few years ago I've come to learn and evolve my thinking and that's a beautiful thing um Bitcoin is all about person growth in my mind because I think that it inspires us to explore um and that's part of human nature um that being said I I know that we're kind of up against the the hour and I know that uh both Kristen and Matt are very very busy people um I'm going to close by asking one question uh of each of you um if Bitcoin is indeed sound money and if it ultimately becomes viewed as true currency is there the possibility that you know that uh we ultimately might see no capital gains on bitcoin here in the United States I know that other countries are um moving down those paths what is the Catalyst that gets us there I don't I I just don't know what that looks like I've gone back and forth on this um and I'll tell you um you know for tax purposes Bitcoin and digital assets are viewed as as capital assets and I think I have an issue with the IRS treating digital assets as capital assets when it's convenient and in currency when it's convenient you can't really have it both ways and there are times when I think this is we're are I don't know that we're ever going to get to a a point where we can truly use it as a currency and I know that's probably an unpopular opinion just because of transaction cost and speed and things like that and there are other alter I mean there's Litecoin and there ways but um I guess I don't know that we will'll get to that point so obviously you know I think I think it's going to remain being treated as a capital asset and I think there's going to be a capital gain and if it is a store of value which I certainly think it is as opposed to um a more traditional currency then perhaps that's not in appropriate you know I'm all about minimizing and mitigating taxes but I don't see that going away I don't see the capital gain treatment going away and and maybe it shouldn't um maybe we should just figure out ways to creatively minimize right my my perspective on this is um I don't know may maybe a little bit different but I probably end up in the same place as Kristen on this deal I think that um I think the path to bitcoin really becoming a currency I mean now we're talking truly unit of account medium exchange yes um I think first of all just the algorithm itself it runs counter to that narrative because of the scarcity built into it you know because of the having cycles and we're on this asymptotic path to zero new Bitcoin You by 2140 or whatever it is that that inherent increasing scarcity um automatically lends itself to an asset that will appreciate in Fiat denominated terms over time why is that well it's because Fiat is an inflationary asset not a deflationary asset um so I think you know to a certain degree if we if we truly had a Bitcoin standard and Bitcoin did become a unit of account and a medium exchange as a currency then I think we're in Jeff Booth's world where the price of Tomorrow becomes uh cheaper over time in sat Den dominated terms you know we get to a disinflationary or deflationary cycle I mean I think to a certain degree that's like Market Utopia um which is aspirational I just don't think it's realistic um I mean we you know we are it's not just the United States it's not it's the you know the consuming public is addicted to debt um the governments that we all inhabit are addicted to debt our society is run by debt it's um I just I think that we will at least for the duration of my career probably the duration of my life and maybe that of my kids we will live in an environment where Bitcoin will be subject to capital gains tax because the the appeal of governments to be able to collect tax revenue on an asset that appreciates like Bitcoin has and like Bitcoin probably will it's it's addictive for these governments um and so you can't fund Wars with Bitcoin but you know what you can do you can fund Wars with capital gains tax collected on bitcoin um and so I think that's the probably cynical reality but that's my that's kind of how I think about how from a policy perspective how Bitcoin will be taxed and of course it's subject to a state tax when you die not just at the rate of 23.8 from a capital gains tax perspective but at the rate of 40 so um the the IRS would just assume you not sell your Bitcoin just die with it yeah oh my goodness well I have to say uh I could sit here for hours and just pick your brains because I just really think so highly of of the the work that both of you are doing and and the knowledge that you have accumulated across your careers um cannot thank you enough on behalf of Mark and and onramp thank you for joining us today and um if somebody is listening to this whether they are a high net worth uh individual or family office or another advisor um how how might they reach out to you to pick your brain on on on what it is that you do and and um love to hear just closing thoughts on that Matt start with you and end with Christen sure well I mean first of all I'd be remiss if I didn't just give gratuitous thanks to you guys for what you do both both you both of you individually but also the work that you do at onramp I mean I've been a long longtime fan of on-ramp and it's Founders since the beginning I've followed that story I've known those folks for a long time and really respect everything that you guys do in the space and um the stuff that you do through the media to educate other people is is powerful and is compelling and I'm I'm Beyond honored and humbl to be able to share your your Spotlight so thank you for that um there's a couple of different ways to get a hold of me and follow what we're doing at bespoke group uh first of all our website is simply www.b bespoke group.io bespoke group.io um because I'm a grizzled old gen xer I'm also on LinkedIn uh you can I don't know exactly how you find me but if you just Google Matt mclin talk at spoke group you'll find me on LinkedIn I'm also on Noster at mlin talk that's just a at and then my last name which is on the screen here and then um I'm periodically on Twitter I refuse to call it X because I think that's just dumb uh I'm on I'm on Twitter at um mlto corm and I'm I'm somewhat active there how about you Kristen so I'm young Gen X or I guess I'm technically a millennial but I mean my husband's 10 years older than I am and definitely identify with Gen X um so I don't have a website we've talked to I've talked to Mark and Rich about this uh I still don't have one I had a guy that was helping me and uh he kind of dipped out and so uh now I'm in the market for website development so if you have any suggestions let me know um but I haven't really needed one honestly I've just a lot of my work comes from um word of mouth and so LinkedIn I'm on LinkedIn um Kristen St digital tax Council and then I am on Twitter a fair amount um it's just the crypto tax lawyer um if you go over there and you see some true crime stuff mixed in that's that's still me that's just my other kind of side passion because I used to litigate back in the day so and then telegram it's I'm also the crypto tax I'm on telegram a so yeah thank you guys so much for having having me and and and it's been phenomenal and very much appreciate all you're doing well thank you both for sharing your expertise and uh everybody have a great week I'm sure that uh who knows maybe next week when we uh come back Mark uh we might be we might be north of 990,000 and it would be shocking it would it would be enjoy rich but as I said even before the election we had a nice 110 Base number for the end of the year well I think you're on I think you're on mute rich but we want to hear you I I I just said uh well you know we're all striving to become Kristen and Matt's next clients you know so we'll just keep pushing including Kristen and Matt yeah including us exactly all right thank you so much everybody and we'll see you next week thanks guys take care thanks for listening to this week's episode of the show if you found the information valuable please share the episode with a friend or leave a rating on your favorite podcast app all the links we discussed in today's show will be in the show notes inside your podcast app before we finish a quick reminder that onr media is for informational and entertainment purposes only and nothing should be construed as investment or legal advice regardless of where you are on your Bitcoin Journey we'd love to hear from you visit onramp coin.com cont to schedule a consultation with one of our Private Client advisers