In today’s issue:

• Market Minute - How Michael Saylor is creating money out of thin air…

• Deep Dive - When to get your crypto off of exchanges…

• Wealth Hack - Protecting your crypto from beyond the grave…

• Brain Food - Understanding Bitcoin wallet seed phrases…

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WEEKLY WISDOM

LEARNING OPPORTUNITY

How to Protect Your Crypto Fortune

Learn how to safeguard your digital assets from a crypto fund manager who's navigated the most treacherous waters of crypto investing.

If you’re interested in learning more about managing crypto portfolios, check out the best-selling Cryptocurrency Risk Management: A guide for family wealth managers by Joshua Peck. He breaks down the common and uncommon dangers of crypto investing in an approachable way and teaches readers how to avoid them.

ENGAGING IDEAS

Saylor’s Inite Money Glitch…

Michael Saylor has invented an infinite money machine where he buys Bitcoin and if Bitcoin goes up in price, his firm appears to make money, so he can issue debt and sell shares of his firm. If it sounds too good to be true, it is. Investors in $MSTR are paying over $300k per Bitcoin by buying it through MSTR, rather than today’s spot price. All infinite money machines eventually fail, but it will be interesting to see what happens to his.

Chinese stocks are sizzling…

Chinese stocks are sizzling: retail investors borrowing record margins to bet on tech and startups, with the startup index up 112% since September. Despite foreign selloffs, local money sees potential in domestic stimulus and tech self-sufficiency. One key stat: over $20 trillion sits in bank deposits, ready to fuel the market. Speculative fever is high, but opportunity beckons.

More Late Night Speculation?

Wall Street's 24/7 trading revolution is accelerating, driven by tech brokers and global investor demand for constant market access. As off-hours trading volume grows and regulatory barriers crumble, the stock market is transforming into a sleepless, crypto-like ecosystem where traditional trading hours become obsolete. The future belongs to platforms offering instant, round-the-clock trading across global markets.

MARKET MINUTE

Saylor’s Infinite Money Glitch — $MSTR

Want to Pay $300,00 for $100,00 of Bitcoin? Michael Saylor Has a Deal for You…

Michael Saylor, the chairman of MicroStrategy, Inc., has found a way to grab the spotlight—and it’s raising eyebrows. He’s discovered a strategy that essentially lets him create money from thin air by leveraging the way companies are valued.

Here’s his playbook:

1. Buy Bitcoin and add it to MicroStrategy’s balance sheet.

2. When Bitcoin’s price rises, issue new shares or take on debt to buy even more Bitcoin.

3. Promote the stock aggressively through podcasts and media appearances.

4. Low information retail investors pay far above the actual value of the company’s assets.

5. Use the proceeds to buy even more Bitcoin, continuing the cycle.

This strategy, called Multiple Arbitrage, takes an asset from one market (Bitcoin) and repackages it for another (stock investors), where it gets a much higher valuation.

The big questions: Will regulators step in and call out this de facto Bitcoin ETF without a license? Or will Saylor’s bold approach inspire other CEOs to follow suit?

Either way, this could be a major boost for Bitcoin’s adoption—and a fascinating case to watch.

DEEP DIVE

How to Get Crypto Off of Coinbase and Protect It?

Are you ready to take control of your Bitcoin? Whether you want maximum security or minimal hassle, here’s how to protect your crypto—from exchanges to self-custody solutions that even pros swear by.

After Bitcoin’s recent surge, one reader, Mike (42, $3M portfolio, $1M in crypto), asked how to protect his Bitcoin off the exchange. Here’s a breakdown of his options, from simplest to most secure.

1. Keep It on the Exchange

For smaller holdings or frequent traders, leaving crypto on platforms like Coinbase, Gemini, or Robinhood can be practical. These exchanges are regulated by the NYDFS, requiring them to segregate client funds and use cold storage for most assets.

While this option isn’t the most secure, the platforms have robust protections in place. It’s a good fit for holdings under $100,000, where replicating their infrastructure may not be cost-effective.

2. Third-Party Custody Services

For larger portfolios, third-party custodians like Fidelity Digital Assets, BitGo, or Coinbase Institutional offer segregated storage. These services charge around 0.20% per year and cater to clients with higher investments.

Professional custody providers manage all the complexities of securing crypto. They’re ideal if you want long-term storage without the hassle of self-custody. The fee may be worth it for the peace of mind and expertise they provide.

3. Self-Custody

For maximum control, self-custody is the way to go, but it requires technical know-how and careful planning. Here’s a step-by-step guide:

Step 1: Secure Your Exchange Accounts

Before transferring, upgrade security on your accounts. Use a YubiKey for two-factor authentication (2FA) instead of SMS. This reduces the risk of SIM-jacking or other phone-related hacks. And use a secure password that you do not use for any other services.

Step 2: Set Up a Hardware Wallet

Purchase a hardware wallet like the Trezor. These devices store your crypto offline, protecting it from online threats.

Step 3: Backup Your Wallet Keys

Record your wallet’s seed phrase (the recovery key) using a fireproof and tamper-resistant product like the KEYSTONE Crypto Seed Storage.

Step 4: Divide and Secure Backups

Split your seed phrase into three overlapping pairs (e.g., AB, AC, BC) and store them in three separate secure locations like safe deposit boxes. This ensures redundancy: any two sites can recover your wallet.

Step 5: Destroy the Original Wallet

Once your backups are secure, wipe and destroy the original hardware wallet to eliminate any single point of failure. Your keys now exist only in your secure backup locations.

Maintenance and Monitoring

Self-custody doesn’t end once you’ve secured your crypto. Regularly check your backup sites to ensure they’re intact, and test your recovery process annually. For example, safe deposit boxes can move if banks close branches, so stay vigilant.

Which Option Is Right for You?

• Use the Exchange: If you’re holding less than $100,000 or trading often.

• Third-Party Custody: For portfolios above $100,000 that you don’t want to actively manage.

• Self-Custody: For long-term “government insurance” holdings or those seeking maximum independence.

Each option has trade-offs, so choose based on your goals and comfort with managing crypto security.

WEALTH HACK

The Digital Fortune That Vanished

Imagine losing $250 million and your husband. How one man's sudden death exposed a digital financial nightmare that could happen to anyone.

In the world of cryptocurrency, a single forgotten password can mean millions lost forever. This is the haunting story of Gerald Cotten, a 30-year-old crypto entrepreneur whose sudden death in India turned a thriving bitcoin exchange into a financial ghost town.

Cotten and his wife Jennifer lived a life of luxury, funded by his cryptocurrency business. They traveled the world, owned a yacht, and seemed to have it all. But beneath the surface, a dangerous secret was brewing. Cotten was the only person who knew how to access the company's critical financial systems - and he kept those secrets entirely to himself.

When he died unexpectedly during their honeymoon, everything collapsed. $250 million in customer assets simply disappeared. Investigators discovered Cotten had been secretly moving money around, essentially running a massive financial fraud. His wife Jennifer was left stunned, claiming she knew nothing about the complicated financial maneuvers.

The Lesson: Digital Wealth Needs a Backup Plan

This story isn't just about one man's deception - it's a wake-up call for anyone holding digital assets. Here's how to protect yourself:

1. Never be the only person who knows your financial passwords

2. Create a secure document detailing your digital assets

3. Share access information with a trusted family member or lawyer

4. Keep backup copies of critical access keys in multiple secure locations

5. Create a clear plan for what happens to your digital assets if something happens to you

In the digital age, your financial legacy can disappear with a single missed step. Don't let your life's investments vanish into thin air.

Read the full story at: https://www.cbc.ca/news/canada/nova-scotia/quadriga-widow-jennifer-roberston-gerald-cotten-1.6318955

BRAIN FOOD

Understanding Bitcoin Seed Phrases

Imagine losing $500 million with a single misplaced piece of paper. In the world of cryptocurrency, your entire digital fortune can vanish faster than you can say "backup" - and it all comes down to 24 magical words.

A seed phrase is your cryptocurrency's master key - a critical lifeline to your digital wealth.

Typically, a seed phrase is a sequence of 12 to 24 random words generated by your hardware wallet.

These aren't just any words, but a mathematically precise combination that acts as the genetic code of your crypto holdings.

Each word corresponds to a specific spot in a predefined dictionary, creating a complex, virtually unbreakable access mechanism.

The Crucial Rules:

• Write the phrase down exactly as generated

• Store physically in multiple secure locations

• Never take a digital screenshot

• Keep away from potential fire, water damage

• Do not share with anyone, ever

Your seed phrase is more powerful than a bank account's routing number. If someone obtains it, they can potentially transfer all your cryptocurrency with zero recourse.

Treat it like the most valuable secret you'll ever protect.

Recommended Storage Methods:

1. Fireproof metal plate

2. Bank safety deposit box

3. Securely hidden home safe

4. Split storage across trusted locations

Remember: In the world of cryptocurrency, you are your own bank. Your seed phrase is the vault's master key.

The content provided in this newsletter is for informational purposes only and should not be considered as specific advice for any specific individual. The information is prepared by knowledgeable individuals and is not written by certified tax professionals or investment advisors. For personalized advice tailored to your unique financial situation, please consult with a qualified tax professional or financial advisor.

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