AWM Insights Financial and Investment News

In this episode of AWM Insights, Justin Dyer and Mena Hanna break down the current state of crypto, separating substance from speculation while navigating the recent resurgence in the digital asset space. Together, they discuss the real opportunities and pitfalls, from the cyclical booms and busts to new industry risks—including evolving security threats and quantum computing. With practical stories and the seasoned perspective of investment professionals, you’ll gain a framework for distinguishing short-term hype from long-term value in crypto and Web3. Whether you’re crypto-curious or managing multi-generational wealth, this conversation sheds light on how to think strategically about digital assets in today’s ever-shifting landscape.


Chapter Outline
(00:00) Crypto returns to the spotlight
The conversation opens with the renewed attention on crypto markets, driven by recent headlines and the cyclical nature of the asset class. The hosts set the stage for a broad, nuanced discussion rather than focusing on any specific coin, explaining that crypto has re-entered mainstream conversations amid rising prices and speculation.

(01:45) Market cycles and volatility
The discussion highlights crypto’s history of dramatic booms and busts, referencing previous “crypto winters” and emphasizing the extreme volatility inherent in these markets. The hosts caution listeners to keep the risks in mind and not get swept up by hype, pointing out how many projects have collapsed and how holding through drawdowns requires strong discipline.

(03:40) Legislation and speculative mania
This segment covers the two key trends fueling current market dynamics: pro-crypto legislation in the US and India (notably with stablecoins) and a broader resurgence in speculative behavior. The hosts note both legitimate developments and meme-driven hype, describing how certain areas like stablecoins represent valid use cases amid a sea of speculation.

(06:30) Security risks and quantum threats
Attention turns to the heightened risk of hacks as crypto values soar, underscoring how loss of digital assets, whether from inadequate storage or potential technical advances like quantum computing, remains a significant but often underappreciated risk compared to holding traditional securities.

(07:25) Picks and shovels investment approach
The hosts describe their preferred approach: investing in infrastructure and ancillary businesses that support crypto activity, such as real estate for mining operations and companies producing critical hardware like Nvidia, rather than directly speculating on coins. This strategy emphasizes backing companies with tangible utility in the ecosystem.

(10:00) Focus on value creation versus speculation
Rounding out the discussion, the hosts stress the importance of investing where fundamental value is created—such as blockchain applications and private companies enabling tokenization—rather than chasing speculative trades in tokens without clear utility. They draw parallels to gold and emphasize the difference between long-term disciplined investing and short-term speculation, reiterating their commitment to long-term value and prudence in the face of crypto cycles.

Keywords: crypto, crypto cycles, digital assets, speculation, investment strategy, generational wealth, Web3, stablecoins, blockchain, security risks, quantum computing, private markets

Creators and Guests

Host
Justin Dyer
Chief Investment Officer and Chief Operating Officer at AWM Capital
Host
Mena Hanna
Senior Investment Analyst at AWM Capital

What is AWM Insights Financial and Investment News?

A bite sized discussion on timely financial news and investment topics, to help you maximize your net worth and wealth for the next generation with Justin Dyer and Mena Hanna of AWM Capital.

Justin Dyer: Hey everyone.

Welcome back to another
episode of a WM Insights.

We're back together, uh, here in person,
in good old Pasadena, California,

and today we're going to, we're
gonna jump into the world of crypto.

It's been a little while for those
of you, long, long-term listeners.

Hopefully you remember the good old days
of 20 20, 20 21, where I, I feel like we

were talking about this general topic.

Uh.

Gosh, on a weekly basis.

Um, and here we are again.

It's kind of back in the news or been
back in the news, uh, on and off for

the better part of the year to date.

Um, and so we want to,
we wanna talk about it.

We want to, you know, both explain why,
uh, maybe that's, uh, that already is

fairly well understood, but also give our
quick take on, on the general asset class.

It, it's not fair to say, um.

Uh, we'll have a, a specific detailed
take on any one coin or another.

We'll certainly touch on Bitcoin
a little bit bit, but crypto is a

gigantic, uh, minefield, um, of an
asset class, if you wanna call it that.

Uh, nowadays there's all sorts of meme
coined, uh, NFTs out there and, you

know, you can really, really get lost.

So we're gonna try to keep this a little
bit, uh, relevant and, and touch on

the, the main talking points, uh, today.

So let's jump into it.

Mina, um.

Right.

We, we, like I kind of said, crypto
has been on a pretty good run lately.

Maybe you can unpack exactly what's
going on, what's, what's behind all that.

Mena Hanna: Yeah, and I feel like
this is gonna keep coming up.

Um, every three to four years we've been
in really, we've witnessed two cycles.

Call them crypto winters where we've
seen the asset class really Boom.

That happened in 2018 and then 2021, and
we saw then a massive contraction down.

Now we're in, in the boom phase.

So obviously everyone's
gonna be talking about it.

You're going to hear about crypto
from, you know, all of your buddies.

Whenever you have a barbecue,
from your barber, your long

Justin Dyer: lost grandmother,

Mena Hanna: maybe.

Yeah.

Everyone's gonna be telling you how, how
amazing it is and how they're all in.

Um, but yeah, I would, I would.

Really take a step back and think
about all of those periods of time

where crypto also hasn't done well.

It's not enough to just
look at the upside.

Uh, you have to really look at the
asset class from a holistic standpoint.

And you know, if you did buy Bitcoin
in 2016, you've done very, very well.

If you've been able to hold
on through the multiple 80%.

Downturns that you've experienced.

So it's not really all, all, all
rosy and peachy across the board.

Um, and.

Also if you, if you really look at the
asset class and you look at a lot of

the projects that have been going on,
there's been a lot of Ponzi schemes

and a lot of just rug pull projects
where investors that have deviated away

from the larger Bitcoin, the larger
cryptocurrencies, think Bitcoin, Ethereum.

Ripple have lost everything.

So there's, there's multiple angles
to this conversation, and it's

really not as simple as buy this now,
make money in a guaranteed fashion.

And, and yeah, you're, you're
gonna be better for it.

It's, it's nuanced here.

Justin Dyer: Yeah.

Nuanced.

And, and we will unpack how we think about
the difference between speculative, um.

I would call speculation.

Let's call, just purely call
it that versus investing.

Um, but before we do that, I do want to
take a quick step back and also give some,

uh, context as to what's driving this.

I think there's two, two main trends or
main themes going on in the world today.

One is that there's actual hard and
fast legislation that has just been

passed both in the US India that are.

Crypto supportive.

A little bit more angled at
what are called stable coins.

Again, crypto is a very broad asset class.

Stable coins.

If you go back to some episodes
we recorded many, many years

ago, that actually is an
interesting use case of of crypto.

Um.

But some, some real hard, uh, legislation,
like I said, that was just recently

passed in the month of July, mid July.

Uh, and then there is this general, um,
return of speculative behavior within the,

within the broader market within, uh, both
crypto and, and just public markets in

general where meme, meme, stocks are back.

There's all sorts of.

Crazy numbers being posted by seemingly,
uh, boring or, or, uh, uh, not,

um, not super strong companies, um,
because of, you know, whatever socially

engineered or, or just, uh, um, viral
type narratives that have caught on.

So there's a couple, couple.

Core driving forces going on.

Uh, and then that's expanding from
actual interesting use cases within

the stablecoin world to things like
Bitcoin, Ethereum, and then Doge being

back in the A mix as well, where, where
some of these things still don't have

any utility and you can't actually
value them in any traditional way.

Certainly.

Um, uh, and, and here we are, right?

So both.

The general cycles, um, of the market are
at play that you, you just highlighted.

But the, the actual driving forces that,
uh, I think have contributed to the, the

peaking out, or I shouldn't say peaking
out, I'm not trying to time the market

here, but the peaking, um, of, of the
current, the current cycle does have

some meat on the bones, let's call it.

Uh, I think it's more so in the world of
stable coins than, than anywhere else.

But, um, that could be a
whole nother conversation.

So.

The other thing I, you know, as
a result of all this newfound

attention, not newfound, but increased
attention, uh, unfortunately there's

been record hacks as well, right?

As something goes up in
value, well, guess what?

People are trying to steal,
steal your money as well.

So just another good thing
to be aware of, right?

Um, if

you,

Mena Hanna: And I'd, yeah, and I'd also
say like quantum computers and I got into

a, a rabbit hole today on that, but there
will continue being these hacks, you know,

that is a massive, massive risk factor.

When you are investing in this asset
class, if you buy a share of Nvidia,

it's gonna be in your brokerage account.

If you buy an ETF, it's gonna stay there.

If you buy a cryptocurrency
and your wallet gets hacked,

it's not stored properly.

Or even with the introduction of
quantum computers, like we, we don't

fully know how quantum computing is
going to impact this asset class,

but it could render a lot of this
technology useless depending on.

How the industry actually evolves.

So yeah, there's like the hacks piece,
which which you just brought up, I

think is one of, one of the biggest
risk elements in this asset class

that people are not talking about.

Yeah.

Justin Dyer: Well, yeah.

Look, there's still a lot of, hey,
you need to believe, you know,

fill in the blank going on here.

Um, which I, in a way, I
think is a good segue into.

Our take Again, if you've listened
to this podcast for a while, I know

there's some of you out there that,
that have thank you for, for being

longtime supporters, but you'll, you'll
know or you'll recognize the, the, the

idea of a picks and shovels approach.

Uh, that's certainly applies here.

Um, we can, we can go down a
couple different routes here.

Let's just stay with the
picks and shovels, so.

M Mina, maybe give a
little bit more color.

What does that actually mean?

How have we actually allocated to the
world of crypto Web3 at large, et cetera,

and taken advantage of it in some cases.

Mena Hanna: Yeah, well there's,
there's a lot of different angles to

tackle this on real estate, I think
is an interesting way of looking

at the picks and shovels approach.

Obviously, cryptocurrencies
take a lot of energy.

There's a lot of mining involved.

There are a few of our investments
that actually take advantage

of these dynamics and have.

Miners that are leasing spaces
or have companies that are.

In this cryptocurrency space that are,
that are leading large spaces that

need to be in certain locations for
the energy piece, and they're taking

advantage of being able to realize
a higher rent than they otherwise

would if they were rented out to.

A company like a WM, that's, that's
an approach looking at investing

in physical companies, like there
are supporting companies that help

supercharge this cryptocurrency industry.

Nvidia is one that actually did
really well a few years ago for.

This exact reason they were able to
actually improve mining and improve

a lot of operations and they got a
bump up in their valuation for that.

AI has has contributed that to that
a lot in the last few years, but we

shouldn't ignore how Nvidia actually did.

Make a lot of money in the cryptocurrency
space by producing a product that

a lot of people ended up using.

So it's more so instead of investing
in, in the asset class, investing in

the utility, it, it's investing in the
just operational side where, you know,

people are going to be working on this,
people are gonna be mining for it.

So sell them the picks and shovels
instead of focusing on the physical.

Actual commodity.

Justin Dyer: Yeah.

Well you, if we go through the whole
valuation creation kind of formula

or model, we want to be, we want to
emphasize where value's actually created.

Speculation value can be created
there, but that's more of a

perception than actual reality, right?

When you buy an asset and it goes up,
you're like, great, but my value's gone

up but hasn't done anything tangibly,
let's say, for the world to, to add value.

And that's how re we really think about.

Investing at large, right?

We can kind of apply the
same framework to gold.

Gold has no cash flows.

There's no inherent utility.

It really is just people speculating
that the price will go up.

Sometimes you get that right,
sometimes you get that wrong.

We don't view that as really a
sustainable investing approach

for multi-generational wealth.

Um, the other piece I would add to,
to what Mina, you just kind of, uh,

the, the picture you just painted is.

Also in the private markets, I mean, the
same kind of framework applies where we

wanna, we want to be in new companies.

creating interesting applications
or use cases or, uh, utility in

this space for people to use.

Again, not just speculating
and buying a token.

Um, maybe that's a company
that helps other companies

tokenize something, so, right.

That means you're taking, uh, an asset.

Uh, it could be a baseball card
and you're attaching a crypto.

Token to that baseball card, and now
you can track that via blockchain

and buy and sell things in, in a
lot more of a, um, seamless manner.

Right.

That's an interesting application.

That's just an example.

Um.

And so that's really what we look at and
we've had some interesting opportunity

and, and, and success there as well.

So we want to see where value
is created and invest there.

We do not want to speculate on
things that we cannot truly value,

whether that be gold, that applies
similarly to Bitcoin as well.

Maybe Bitcoin becomes a digital gold.

I mean, the other interesting
thing to just kind of look back

and reflect, reflect on over the
last five years, the narrative

around a lot of this has changed.

Certainly stable coins hasn't.

I think our, our stance on picks and
shovels hasn't really, really changed

like the whole concept of blockchain.

Very interesting technology.

Still trying to find a
little bit of use case.

Broadly speaking, stable coins
being, uh, a great use case.

Like I said, tokenization seems to be
getting a lot more, uh, traction as well.

That's very interesting.

But Bitcoin.

It doesn't really have
that use case quite yet.

Uh, it is, you know, now
potentially a store value.

It was thought to become the, you know,
currency of the future at one point.

I don't think that that's
really, uh, in the cards,

certainly in, in the short term.

And so that's something that, that you all
listening to can help, uh, use a framework

like that can help use to differentiate,
um, you know, an investment, a true

investment, long-term value creation.

Investment versus something
that's purely speculative.

So hopefully that all helps.

Um, you all listeners here, if you have
any more questions, definitely shout out.

Shout us out.

Um, get in contact.

You know, uh, we love getting
content from all you guys.

So we are, are addressing timely.

Questions that, that are,
you know, nagging at you or

you're just curious about.

So definitely, definitely reach out.

But just remember, especially
when it comes to, um.

You know, these, these more volatile
kind of cyclical investments.

We really do prioritize substance
value creation, discipline

and, and long horizons.

There's something, there is something
within the world of Web3 within crypto,

um, and we've kind of believed that.

Again, since, since many, many years ago.

Uh, but we're not gonna go
chasing any headlines or anything

like that just because of some
recent short term performance.

We, we just know better than that.

Uh, with that, we will wrap.

Sorry for that little long-winded, uh,
conclusion there, but hopefully that

was all helpful and, uh, we'll wrap.

As always, with own your wealth,
make an impact and always be a pro.

Thanks a lot for listening.