Alternative cryptocurrencies: 5 tips for physicians [PODCAST]

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“What are altcoins, and should you be investing in them?

I cannot speak to whether investing in altcoins is appropriate for you. Altcoins are a highly volatile and risky asset class that offers the potential for high returns. Every investor must decide whether they are willing to bear the associated risk. When evaluating thousands of coins to select the best opportunities, it is critical to have an appropriate framework to work from. That is why I am sharing my 5-step framework.”

John Stillson is a medical student and an investment manager.

He shares his story and discusses his KevinMD article, “Alternative cryptocurrencies: 5 tips for physicians.”

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Hosted by Kevin Pho, MD, The Podcast by KevinMD shares the stories of the many who intersect with our health care system but are rarely heard from.

Transcript

Kevin Pho: Hi, and welcome to the show, where we share the stories of the many who intersect with our health care system but are rarely heard from. My name is Kevin Pho, founder and editor of KevinMD. Today on the show we have John Stillson. He is a medical student, and he’s also the CEO of a cryptocurrency investment management company. He wrote the KevinMD article “Alternative cryptocurrencies: 5 tips for physicians.” John, welcome to the show.

John Stillson: Thanks, Kevin. I appreciate you having me on.

Kevin Pho: We’ll get into the article in a little bit, but first off, can you share your story and journey to where you are today?

John Stillson: Yeah, of course. I’m originally from rural northern Indiana and grew up there. My dad’s a family doc up there. He calls himself a country doc, does OB, the whole kind of traditional family medicine where you kind of do it all. So that’s what I grew up around. I went to the University of Alabama for undergrad and really enjoyed going down there. I watched some good football and saw a couple of national championships. I’ve got to throw a “Roll Tide” in for any Alabama fans listening. Then I came back up to Indiana for medical school, so I’m currently at IU School of Medicine, in my fourth year there.

Back when I was in college at Alabama, though, I had gotten a scholarship there, so the money that I’d saved for college, I wasn’t having to pay for my school with. So I had some spare cash, and I decided to start investing. I did a little bit of stock investing, but then I really got interested in cryptocurrency and started doing some investing back then with that money, and grew it over time. I went through a really rough crypto bear market right after I started getting into it, but I held throughout. I had a strategy that I used, and I continued to watch it and do research.

Back then I had also started a company, but felt I didn’t have enough experience, and I was probably right. As things have gotten interesting in the cryptocurrency market over the last two years, this past fall going into January, I started thinking maybe I should start a company, because I think there are a lot of people who are interested in cryptocurrency but don’t really understand it, and maybe they don’t even want to understand it. But they’re interested in the opportunity to grow their personal wealth and provide financial freedom for themselves and their family. So I wanted to start this fund through that. It’s a family company. It’s run by myself and my business partner, who is my cousin. He’s the CFO, and he has the more traditional financial background.

So with all that, we started the process back in the spring, and it was a long process of getting the right lawyers. We wanted to create a really good framework for success, so we got some really solid lawyers out of Chicago, we got an accounting firm on board, and we drafted the paperwork. If you’ve dealt with real estate or real estate groups, you might have heard of a PPM. It’s called a private placement memorandum, and that’s the structure that we use for our fund, which is what allowed us to create a fund even though we’re not financial advisors, by doing it through a PPM structure. So we’ve just been in the process of gaining investors and getting our quarterly statements rolling, starting to get a track record under ourselves. We’re continuing to bring on investors, meet with people, and grow ourselves, and to start doing more marketing and branding. So it’s pretty exciting.

Kevin Pho: So how do you balance that? You’re in your fourth year of medical school, of course very busy, going on residency interviews, and you’re balancing that as well as being a CEO of a cryptocurrency investment company. How do you balance those two passions?

John Stillson: Yeah, I think it’s just that I really enjoy both of them. So when I’m doing medicine, I’m 100 percent all in. That way, when I’m needing to study or when I’m in the clinic, that’s what I’m focused on. But then when I’m out, I’m able to separate my times, so that when I’m working on crypto and working on my company business, I’m able to maximize the time. I don’t really waste any minutes during my day. I work during lunch, and I don’t really consider it work, especially on the crypto side, because it’s just something I’m very passionate about and I really enjoy. It was originally a hobby and turned into a company. So yeah, it’s just that time management.

My wife is very supportive, and that goes a long way. She’s busy as well, but we make sure in the midst of all of it that we prioritize time for each other, because it’s also important to have a good support system in the midst of the busy times of residency interviews and all the craziness that can go on in the fourth year of med school.

Kevin Pho: All right, let’s transition to your KevinMD article titled “Alternative cryptocurrencies: 5 tips for physicians.” We’ve had a couple of cryptocurrency-themed podcast episodes, and I always like to start off with this question before you get into your article: Why should physicians care about cryptocurrency?

John Stillson: Yeah, I think one of the reasons you should care is because it’s a unique opportunity to diversify into an emerging asset class, and there are a few reasons that should matter for you. One, if you’re a physician, if you’re anyone, you should be investing. You should be growing your wealth for the future to set yourself up to have autonomy and to protect yourself and your family. Most people in the past have usually done it through stocks and real estate. So this is kind of a new market, and it’s interesting because it’s global. It makes sense that in a more globalized world, in an internet-based economy, you would start to have more asset classes that are sort of internet-based and more global. So adding that to your portfolio can really help, potentially giving you some increased returns, but also increased volatility. There’s a lot of risk with it, so I think having a small percentage is beneficial.

Also, it’s continuing to grow as a portion of the global market cap. The global amount of wealth in the world is about $440 trillion, give or take, and cryptocurrency today is about $2.5 trillion, which is a half percent, one-half of a percentage point, of global wealth. That’s not insignificant in the grand scheme of things, and you don’t capture that in the traditional funds that you would invest in, a mutual fund and things like that. So I think that’s one of the reasons. I think it’s going to continue to grow, and if you aren’t directly investing in it, through either a cryptocurrency fund like I’m doing or doing it yourself, then you’re missing out on some of those growth opportunities you could have in your portfolio.

Kevin Pho: So even within cryptocurrency, there are various asset classes. Most equate cryptocurrency with Bitcoin, but of course there are other classes as well, like Ethereum and micro-cap cryptocurrencies. There’s a variety of meme coins that are currently in the news now. But you talk about alternative cryptocurrencies, “5 tips for physicians.” Now, for those who didn’t get a chance to read your article, can you just walk my audience through it and share the story of why you decided to write it?

John Stillson: Yeah. I guess the original reason I decided to write it is, like I said, my dad’s a physician, and he doesn’t really know anything about crypto, but he’s someone who’s always interested in learning about new technology. I think a lot of physicians are always learning, especially in the medical field, but also just in general, always taking in information about what’s going on in the world. I often see physicians on the cutting edge of technology, getting a new phone or different things that are coming out and trying them out. So it only makes sense that crypto would be a next step. However, it’s kind of a confusing field, given the specific vocabulary that it has. It’s kind of a nuanced category that you don’t see in your everyday life. So I just wanted to provide some tips for physicians to slowly start to learn how to evaluate cryptocurrencies for themselves, kind of the way that I did.

So I did five tips. My five tips were use case, and I think that’s pretty important. What does the crypto do? What is the value that it’s providing to the world? What’s the roadmap? Companies can make promises, but what is their plan for getting there? I think these are just normal things you’ll think of for any company, and when I think of a cryptocurrency, I think of a company, and that’s kind of the way you should evaluate them. It’s a little bit different, but also kind of the same.

My third point is who’s working on the project. Who’s on the team? Do they have experience? Do they have good leadership? Being the CEO of a startup, I know that it’s not all about necessarily having 20 years of a track record. Sometimes it’s just about being ambitious and confident and working hard. So I think looking into who the team members are, what they’re doing, and whether they’re active goes a long way toward success, because there are a lot of cryptocurrencies that are schemes. So it’s important to evaluate who you are going to be essentially working with, who’s going to be working for you, if you own that coin.

My fourth point is to look and see if there are copycats of a certain coin or a certain idea, because usually, in my opinion, that’s a good thing. That means that it’s a good idea and people are trying to innovate. To me, when there’s a lot of competition in a field from copycats, out of that usually rise one or two that are better than the others, and they’ve had to fight, sort of survival of the fittest, in order to be the best. I think that’s beneficial if you can figure out who those are.

And then, what’s the community like? Crypto is all about community. Ultimately, that’s where it started, with some grassroots people who were confident in the future of it, and now there are thousands and thousands of coins that you can look at. But I want to see: Is there an active community? Are people talking about it? Are people excited about it? Or is there not really much talk? Are there not really many Twitter posts? Are there not many blog posts? Is the team engaging with the community? All that kind of stuff is important. So I think those five things are a good foundational five, to just look at the basics of a coin and what they’re doing, to see if it’s something you’d be interested in and if you think it has upside as an investment.

Kevin Pho: In my private physician Facebook groups, crypto has of course been in the news, and over the last few weeks, something like Shiba Inu, right, that’s kind of dominating the headlines, a thousand percent over the last few weeks. So if I’m a physician who knows nothing about crypto, and I see something like Shiba Inu go up thousands of percent over the past week, and I say, “Hey, I want to get into this,” where do I start? What’s your advice for that physician who just reads that headline?

John Stillson: Yeah, I think educating yourself is important. You need to know what you’re putting money into, just like any investment. If you’re trying to pick stocks, or you’re trying to pick a house that you want to purchase to rent out or to flip, you need to know what you’re getting yourself into. What’s the market like? What’s the value they’re actually providing? Shiba Inu, for example, seems like it has great communities. That was one of the five points I talked about, great community. But what does it actually provide to the world? It’s kind of questionable what sort of value it’ll provide over a longer time frame.

So yeah, I think educating yourself is important, and educating yourself with reliable sources, whether that’s someone who has more experience or a cryptocurrency expert. I educate myself by following and listening to people who I consider experts in the field, so that I can constantly be learning, because I don’t claim to know everything out there. There’s so much innovation happening. But that’s kind of the groundwork.

Kevin Pho: And where can clinicians buy crypto?

John Stillson: Yeah, there are tons of options. My personal preferences would be Coinbase and Voyager. Coinbase and Voyager are both U.S.-based crypto exchanges. You can pretty easily link your bank account. They’re safe and reliable. They’re registered with the federal government and run like regular businesses. So you can have a lot more confidence in them than maybe some of the other ones, which over the years have had other problems. And then, if you want to really get into it, there are decentralized exchanges that you can use, where you don’t go through a centralized entity like a Coinbase or a Voyager, but instead you deal almost more in a peer-to-peer manner, where I am giving you whatever Bitcoin and you’re giving me dollars online.

Kevin Pho: For those physicians who want to buy crypto in their regular brokerage accounts, there are exchange-traded funds, of course, that recently have been in the news. What are your thoughts?

John Stillson: Yeah, I think it’s best to hold the actual Bitcoin or the actual cryptocurrency, rather than having someone else hold it for you in that circumstance, because it’s kind of a distant entity you don’t have a relationship with. So it’s better to hold it yourself. But if you are going to invest in a fund like that, I would recommend investing in one that actually holds the physical, the digital physical, Bitcoin, rather than investing in futures and things like that, which are kind of the basis of the current ETFs that I’ve seen approved so far. I know that there’s one that has the physical Bitcoin that’s trying to transition into an ETF, and I think that would be the one I would prefer over the others.

Kevin Pho: And when you say that we can research the story behind the various alternative cryptocurrencies just like you would a company, where can a clinician find that research?

John Stillson: Yeah, there are two websites that are primarily used as a very basic aggregator of information. They’re called CoinGecko and CoinMarketCap. Those are not the end-all, be-all of education, and they can be wrong, but they have good summaries about what a crypto is about, and they usually have links to that cryptocurrency’s social media sites and their website. Then you can actually go to the websites and see what the team for that cryptocurrency is saying, what their plans are, and what they’re saying the use case of the coin is. Rather than going through a third-party opinion, you can go straight to the source, where the Chainlink team is saying, “This is what we’re doing. This is our plan. This is who we’re talking with. We partnered with this company.” And you really get reliable information that way.

Kevin Pho: And just to give us a frame of reference, what are the historical returns of crypto compared to, say, the S&P 500?

John Stillson: I think that is hard to say specifically, because there are so many cryptos out there, but it’s significantly more. I mean, Bitcoin from its inception is a million percent or something crazy like that, if you had bought in immediately when it was first created. Then there are all sorts of other coins out there that have also outperformed compared to the S&P. I mean, even during this past year, say, I’ve been tracking since January, if you just took what I’d call an aggregate of the entire crypto market compared to the S&P, it’s outperformed the S&P over the past, whatever, 10 months of this year. So it’s pretty significant upside compared to your traditional stock markets, but also a lot riskier and a lot more volatile. I mean, it drops 20 percent in a day, and it goes up 30 percent the next day, so that’s kind of the risk you have to bear.

And that’s the benefit of the fund that I’m doing. If you invest in the fund, then you don’t necessarily need to watch that every day, because you know someone’s doing that for you, someone who has done the research and has experience doing the research and investing in various coins.

Kevin Pho: Among the criticisms of crypto that have been in the mainstream media, of course, is the environmental impact, specifically of Bitcoin. So what are your comments to those who criticize the environmental impact of Bitcoin?

John Stillson: Yeah, I think that the environmental impact is not completely unfounded. However, I would be more of an advocate to say that it provides an opportunity for innovation. For one, if electricity is expensive, which it can be potentially with fossil fuels and whatnot, over longer periods of time the value of the Bitcoin that you’re mining becomes less, because it’s an energy-intensive production process. But that kind of incentivizes the people who are mining it to use sources that can produce energy over long periods of time with a decreasing cost over time, so solar and wind. You have the cost up front, but then over time you’re not continually paying to buy coal or gas in order to fuel a plant or to produce electricity. I think over the long run, it’s actually going to create innovations in energy production.

I don’t think there’s a problem with energy. It’s OK to use energy, and I think as the world continues to grow, there’s going to be more energy usage. But if it’s being used in a waste-minimized manner, in a way that’s more sustainable and renewable, I think that’s the long-run win, and it’s not something that’s going to happen overnight. I think Bitcoin might produce some faster innovation as a result. For example, I’ve seen some places where they usually just blow off gas or burn it as waste, and they’re actually connecting the burned-off gas and waste and producing it into Bitcoin mining, turning it into energy that otherwise wouldn’t have been used for anything. But now it’s being turned into a productive asset. So I don’t think the arguments are unfounded, but I think that over time, it actually is going to be beneficial for environmental purposes.

Kevin Pho: We’re talking to John Stillson. He’s a medical student, and he’s also the CEO of a cryptocurrency investment management company. He wrote the KevinMD article “Alternative cryptocurrencies: 5 tips for physicians.” John, what are some of your take-home messages that you want to leave with the KevinMD audience?

John Stillson: One, I think if you’re interested in cryptocurrency, just get your feet wet. It’s really easy to get a Coinbase account or a Voyager account, and you can transfer from your bank or your credit card. I recommend using your bank, though. Just whatever an appropriate amount is for you that’s small, $50, and just buy some cryptocurrency, and you’ll see how relatively easy it is. Once you do that, you have to be cautious, because it’s easy to want to jump in feet first. So you should also have in mind what percent of your net worth you are willing to put into it, and set a hard bar, like, “I’m not going to put any more than that into it.” But I think you should be willing to try it out and see what it’s about, and do some transactions.

And then also, just continue to educate yourself, just like you would anything else in the world. You educate yourself on medicine and politics. You educate yourself on whatever new sport your kid’s playing that you’ve never played before. Educate yourself on cryptocurrency. I think it’s the future of technology, and it’s worth looking into.

Kevin Pho: And how can people reach you?

John Stillson: Yeah, people can reach me through our email, that’s [email protected]. They can also go to our website, investacf.com, or they can call our business phone number, which is 574-780-8906. We would love to talk to anyone and hear from anyone.

Kevin Pho: John, thanks for sharing your time and insight, and thanks again for being on the show.

John Stillson: Thank you.

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