Through critical early investments not just in Bitcoin, but Ethereum, Qtum, EOS, and several other now high profile digit assets and companies, Steindorff's first fund significantly outperformed Bitcoin's 1000%+ gain from 2014 to date.  He and several other prominent early crypto investors and entrepreneurs have now partnered to launch Distributed Global, one of the most pedigreed crypto / digital asset funds in existence.   With Bitcoin finally exploding past and oscillating around the $10k mark this week, Kevin Harris from SumZero sat down with Johnny to discuss Bitcoin, crypto funds, and the future of blockchain technology.

In 2011, a study of academics by the University of California indicated that most individual investors achieve results that are worse than standard investment benchmarks. One of the main reasons was that people were trading emotionally, rather than following a clear strategy. Simply put, if in the past they entered a trade that “coincided with pleasure” they would try to repeat those actions and avoid those that “generated pain.”
After entering a position, we just hold them until the market goes on a bull run. Our strategy is to wait for the overall cryptocurrency market cap to hit it’s all-time high again and sell a portion of our portfolio for USD every week. This means we take profits and can reinvest them back into the market, when it eventually turns bear-ish and repeat. This process also rebalances our portfolio after every market cycle, so we don’t become too overweight in any single position.
At Total Crypto, we think that investing 20% of our Total Net Wealth in cryptocurrencies is actually a high allocation. No matter how high our conviction was in a cryptocurrency, we would never finance a purchase with debt. Again, this can lead to very stressful and financially damaging situations. When looking at things through the lens of Total Net Wealth, we think it’s easier to determine what we can actually afford to lose in cryptocurrency investing.

Generally, the strategy suggested to average out such short term volatility for something that one is investing in long term is to practice dollar cost averaging. This preaches that one should set an exact time at regular time intervals to buy an exact amount in fiat currency of the investment one is looking to purchase — e.g., $1,000 worth of bitcoin on the 1st of every week, or every month. This means that over time, you’ll be able to take advantage of bitcoin’s general trajectory upwards, but balance out the relative short term volatile price movements both high and low, such that you experience a more linear growth trajectory over time of your principal.
Here’s a story about a completely random Norwegian student who bought 5000 bitcoins for $27 back in 2009. Today, with a single bitcoin pushing past $2700, those 5000 bitcoins are worth over $13.5 million. That’s a gain of over 500,000X. No other investment in recorded history that I’ve been able to discover has ever come close to touching these sorts of gains.
Once the ICO tokens are released on an exchange, prices would tend to shoot up in value – often in multiples – as there will be a huge demand stemming from those that were not able to invest during the ICO stage. A trait of popular ICOs is that they would have a whitelisting period, where you must register yourself prior to the ICO period to book a slot for the actual ICO date.
Bitcoin is also dramatically cheaper to use than almost any other form of international money transfer today. Already, for this use case alone, it proves its worth over current dominant international money transfer solutions, such as Western Union. I can transfer money to anyone in the world, in any amount, and have them receive it without moving a finger in just a few minutes. For this privilege, I have to pay just a few cents, no matter how much I’m sending, instead of a huge proportional percentage, with hefty minimum fees and surcharges.
I don't know where this is going to go. And let me let you in on a little secret. Neither do you. One thing I know to be true, that has played out throughout history over and over across several different landscapes, be it political, economic, science and technology, etc is the following... It only takes about .00001% percent of the RIGHT part of the population to get on board with an idea whose time has come. ( 1.) The colonies should declare independence from Great Britain (The American Revolution) , 2.) Free men should not be able to be imprisoned or whimsically taxed by the king (The Magna Carta) 3.) Powered flight is possible (The Wright Brothers, etc) 4.) Racial discrimination should not be supported by the state (Martin Luther King) 4.) The Catholic Church is not only not infallible, but is corrupt and we need to split from it (Martin Luther) 5.) It is stupid to build a rocket, launch it, and then crash into the ocean (Elon Musk) etc. etc. etc. All that being said I think I can make the following statement with absolute confidence. *** Given the perceived injustice and full display of avarice perpetrated by the global central banks, the banking/finance guild/medical guild (to include healthcare, insurance, drug companies etc), the global political class, and the amount of leverage/debt and soon to be unfulfilled social contract promises and the corresponding counterparty risk/chain of custody issues AND given the GLOBAL talent pool that is lining up behind ico's/blockchain in all its use cases to think that revolutionary change is not only possible but imminent would seem very likely to be a suckers bet. It is worth keeping in mind that MOST of the rational sounding population will dismiss this idea out of hand. People that are "rational' in a fucked up world are in effect the radicals and mean reversion both illustrates this in hindsight, and prunes their belief systems and all the structures and constructs that those flawed belief systems were supporting from existence. The current global situation seems to be very near full term pregnant with crisis and opportunity.
This occurs because any block that the rogue miner who changed their software mines won’t be accepted by all the other miners who are still running the original software. Consequently, all the other miners will begin mining different blocks, and adding those to their blockchain. This leads to a fork in the road, essentially, where two completely different blockchains are formed — one by the rogue miner, and one by all the other miners.
It is important to note that some altcoins innovate by experimenting with useful characteristics Bitcoin does not offer. For instance, Ripple serves as a protocol users can employ to make inter-currency payments with ease, BitShares describes itself as “a fair version of Wall Street,” and Darkcoin hopes to provide a platform for completely anonymous transactions. Some altcoin ecosystems, such as Mastercoin and CounterParty, even utilize the Bitcoin blockchain to secure their platform.
It’s almost 10 years into the introduction of the first virtual currency, the Bitcoin and yet, neither the Govt in India nor the RBI have been able to provide a proper regulatory environment, for the crypto currencies to thrive in India. There are many reasons cited: National Security, Threat to convention currency and unregulated investment, causing severe loss to various investors, who are not well versed in these new avenues of investment.
Bitcoin was the investing story of 2017, with prices of the cryptocurrency soaring into the stratosphere. That success lured many bitcoin investors into the market at what proved to be a short-term top, and since the beginning of the year, bitcoin has lost about half its value and is down more than 65% from its highest levels. Some see bitcoin's pullback as proof that the cryptocurrency craze is over, while others think it could represent yet another in a long line of buying opportunities following major pullbacks.
On the flip side, if the world suffers a global financial meltdown on the scale of the Great Depression or something similar again, and fiat currencies start to crater, it very well may be such that governments are forced to resort to accepting bitcoin and other cryptocurrencies, if enough people simply flat out refuse to put their stock in fiat. This was exactly what the US government was forced to do just 13 years into their original experiment with Continental currency, when they agreed to promise to back all the currency they issued with hard gold and silver.
Bitcoin is a digital currency, also known as a cryptocurrency, and is created or mined when people solve complex math puzzles online. These bitcoins are then stored in a digital wallet that exists on the cloud or the user’s computer. Because bitcoins are not housed in bank accounts, brokerage, or futures accounts, they are not insured by the FDIC or SIPC.