I believe bitcoin is the best form of money

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Ask most financial podcasters how they got started investing, and they’ll likely name an interest in business or an enthusiastic parent who encouraged them to look at the stock market.

For Peter McCormack, the initial inspiration came in the form of a “sack of weed”.

“The reason I got into bitcoin was in 2013, a friend of mine came over and said he found this new website called Silk Road,” he reveals in an interview with the podcast Money Clinic at FT.

“To buy your weed, you had to have this thing called bitcoin. So I bought some. ”

Fast forward to today, and the McCormack podcast founded in 2017 – What Bitcoin Did – is one of the best-known financial shows on both sides of the Atlantic.

For the past five years, the 42-year-old former Bedfordshire publicity manager has traveled around the world interviewing bitcoin commentators, ranging from investors and tech specialists to macroeconomists and executives working in the fast growing crypto industry.

Last month, he was in El Salvador to document the country’s journey towards legal tender for bitcoin, interviewing President Nayib Bukele.

McCormack says, “Six or seven years ago my life fell apart. I got divorced, my business went bankrupt, my mom passed away, and I was two weeks away from losing my home.

Peter McCormack: “You never feel rich because you never really want to spend your bitcoin”

“I started this podcast in 2017, not thinking it would be anything, just more of a hobby. Now I am interviewing a president. There is no way to try to figure out how it all happened.

A bitcoin bull, McCormack is not afraid to allow his opinions to be challenged on his podcast, but shuns conventional investments in pensions and Isas stocks and stocks because he believes the cryptocurrency will produce much higher returns. He’s also invested in bitcoin miners – who create new bitcoins by solving complex calculations – and even mined bitcoin himself.

However, in his interview with the Money Clinic, he reveals that he has a buy and hold strategy and no longer tries to make money trading bitcoin after disastrous early losses.

“In 2017, I think I invested around $ 30,000. At the end of that year, [I was] almost $ 1.5 million and then I started losing most of it just by not really understanding the market and just thinking I was a genius, ”he admits.

“So I decided to stop trading and adopted a very different strategy. I believe bitcoin is the best form of money there is, so I decided to put as much of my personal and business profits into bitcoin [as possible] and maintain it over the years.

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Peter McCormack explains to Claer Barrett why he strongly believes in bitcoin. Listen now

It turned out to be more lucrative for McCormack, at least on paper.

“It changed my financial situation,” he said, declining to go into details. “I wouldn’t say I’m gloriously rich, but it’s one of those weird things. You never feel rich because you never really want to spend your bitcoin.

On the FT podcast, he explains why he is convinced that in the long run, the potential returns from bitcoin will outweigh any other form of investment.

“For me, it’s a store of value. But when I was recently in El Salvador, I was using the bitcoin I have on my phone. . . buy coffee, buy breakfast, buy dinner. So I used it as a means of exchange.

Another guest on the podcast, Katie Martin, FT Markets Editor, questions this duality.

“The real puzzle in the center [of bitcoin] is it really going to the moon or is it a currency that you can use to buy eggs, Tesla cars and everything in between. It can’t be both. The crypto industry has yet to find a good way to close this circle.

Nonetheless, she accepts that it has been a watershed year for bitcoin. A growing number of traditional financial institutions are taking a serious interest in crypto; the US listing of the Coinbase crypto platform was another big moment; and El Salvador is unlikely to be the last country to make bitcoin legal tender.

However, the growing popularity and prices of crypto investments have put them on a collision course with financial regulators, especially in China where the ongoing crypto crackdown has caused sharp swings in the price of bitcoin and other coins this year.

China is one of many nations with plans for central bank digital currencies (CBDCs) which McCormack says are “the ultimate form of control.” . . depending on where you live, your transactions may be used against you ”.

The world of traditional investing is divided. Cathie Wood, founder of Ark Invest, predicted last month that the price of bitcoin could reach $ 500,000 within five years (in an FT poll, three-quarters of readers disagreed). Ray Dalio, founder of the Bridgewater Associates hedge fund, recently warned that regulators will “kill” bitcoin if it becomes too efficient.

Yet despite the risks and price volatility, the opportunity to make a lot of money very quickly has an undeniable appeal to young investors.

Consider everyone to be a con artist and protect yourself. . . The threat model is broad

The Financial Conduct Authority estimates that over 2 million people in the UK hold bitcoin or other forms of cryptocurrency as an investment, but many are unaware of the risk of investing in an unregulated asset class .

On the FT podcast, McCormack warned young investors to be especially wary of crypto-related fraud.

“Consider everyone a crook and protect yourself” is his golden rule. It uses hardware wallets and private keys, but the scams are sophisticated and it urges hyper-vigilance.

“You might receive a fake e-mail [supposedly] of Ledger saying you need to update your hardware wallet, plug it in – and then you get your bitcoin stolen, ”he says. “The threat model is broad.

When asked what advice he would give young investors, McCormack urged them to be more interested in bitcoin than just price before parting with any money.

“First and foremost, before you invest in this stuff, make sure you have a job and a good, secure income, and then make a decision on what percentage you want to invest.

“Understand what bitcoin is and what role the people who support bitcoin think it can play in society. “

“And don’t trade. Ninety-five percent of the people who try to do so will lose. If you must trade, please do not use leverage. Bitcoin is volatile. [Leveraged trades] will play with your emotions. I have spoken to many people who have screwed up crypto completely financially and lost everything.

To listen to Peter McCormack’s interview, click the link above or search for “Money Clinic” wherever you get your podcasts.

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