Why Not Owning Bitcoin is Your Biggest Financial Risk

Sean Weisbrot: Our cryptocurrency is finally worth paying attention to. In 2025. I speak with Frank Hepworth, the founder of Yieldschool, a crypto consultancy firm for high-net-worth individuals. We explore why some investors are adding Bitcoin and other cryptocurrencies to their portfolios, how they are thinking about risk and the evolving strategies for navigating this intricate space. This is not. Financial advice. It's just a transparent conversation about what you might wanna know if you're going to get yourself involved with cryptocurrency in a safe and responsible manner. So if you're crypto curious, like so much of the world, this is an interview you're going to wanna hear, why is it so important for people to understand what cryptocurrencies are for the purposes of their portfolio?

Frank Hepworth: It's so important because it's the best performing asset class on the planet. It's volatile in the short term, but long term it performs better than anything else, and you're actually risk on by not having any exposure in your portfolio.

Sean Weisbrot: I think a lot of people are very scared by cryptocurrencies. Why do you think people are so afraid of them?

Frank Hepworth: Uh, I think it's the volatility over the short term, and that can scare off people. But if you just zoom out and you look at the long term, um. This is a fantastic performing asset class and you do not need to sell your house and go all in on it, but you do not also have 0% in your portfolio either. You do take some exposure.

Sean Weisbrot: Yeah, there was somebody, I think it was Jamie Diamond, I cannot remember. There was someone that runs a large hedge fund who said, you should allocate 2% of your portfolio to cryptocurrency. Why do you think they said that? And do you think that's enough for your portfolio?

Frank Hepworth: It depends on who you are. For some institutions, that's going to be enough, but the reason they are saying that is the same reasoning that I just put down. Basically, you do not sell all the existing assets you have and go all in on crypto, but you do not just keep it out of your portfolio either. It is the best performing asset class and there is a way to get intelligent exposure to it. And so, like 2% is a great starting point. For these institutions. Jamie Diamond himself, not a big fan, but I think JP Morgan or maybe one of his entities are now making that as a recommendation, and that is where a lot of the demand on the ETF inflows are coming from right now as well. Just these big institutions like JP Morgan who are buying up this ETF for their clients.

Sean Weisbrot: So, you said there is a way to get intelligent exposure. What does that look like? I think a lot of people do not know what kinds of exposure you can get to cryptocurrency.

Frank Hepworth: Yeah, totally. So, the most basic and the easiest is just through your existing like securities provider, wealth manager or maybe Robin Hood. You just get access to the Bitcoin ETF, and that is like a great starting point 'cause it's a unlimited asset. It is the best performing asset class or the best performing asset on the planet. It is kind of crazy not to have a little bit in your portfolio if there's only 21 million and so there, there's literally more millionaires on the planet than there are Bitcoin. And so if you do not have some, there's the, like the game theory argument that like if the price keeps going up, because it's a finite supply, you even if you do not believe in it, you should get some now because if the price continues getting up, like you're going to be priced out and you're going to get a smaller and smaller slice of that 21 million Bitcoin pie. So even if you think it's going to fail in the scenario that it does not, you should get some now because if it does succeed, you are, screwed. So, you should get some now. Um, that is what intelligent exposure is step one. But what we do, we run a consultancy who works with just strictly high net worth investors. And what we are trying to make the case for with them is that. There is a lot more than just Bitcoin and there is some pretty fantastic products in the broad scope of the crypto market, not just like the meme coins and things that maybe get a lot of mind share, uh, on the news, but there's some fantastic products that pay passive yield. There's some really compelling low market cap or early stage, uh, assets that you can buy into that are not meme coins. There's actually a business behind them. They earn revenue and you can apply. Analysis to assets and the businesses behind those assets pretty intelligently. And sure they are going to be volatile and maybe some of them are not going to work out. But the ones that do work out are going to give you, uh, a thousand percent, 2000%, 5000% return. And I get 1, 2, 3, or timeframe, which is crazy. Compared to the traditional markets. And so the intelligence there is like building a portfolio that has mostly Bitcoin in it, but some other assets too. And then some of these crazy little assets as well that have the potential to really go up. And also the intelligence is not selling the house. And to, or taking out a second mortgage and putting it into crypto, but you know, you've got a million dollars in, in financial assets. You take a hundred thousand of that or, or 50,000 of that, and then you put it into a crypto portfolio that's balanced and that's pretty intelligent exposure.

Sean Weisbrot: So. When you're talking about these larger cryptocurrencies like Bitcoin, there are these ETF options which essentially allow you to purchase a share without having to own the coin, which means you do not have the potential downside of someone kidnapping you and trying to steal your coins, or possibly you losing the keys to your wallet, et cetera. So the ETFs give you the. The exposure without the negatives that come with owning cryptocurrencies. Is that right?

Frank Hepworth: Yeah, that is it. It comes with negative owning the ETFs comes with negatives as well. So for example, like the argument is that when you really need your Bitcoin, like in the nuclear war type scenario or like the United States entering bankruptcy type scenario, uh, that's when you really need the physical Bitcoin. And if it's in the ETF. Uh, although you do not have it, you, you're kind of, your, your, your net worth is still actually within a whole bunch of regulated institutions that are only giving you exposure to the asset, which can all run into issues and chaos if the United States government itself is running into chaos and issues. Those regulate regulated entities that are giving you exposure, they will all run into problems as well. And so then you do not really have the exposure to the asset that you think you do. But I, I find people struggle to believe that. I find that's not a very compelling reason. Um, the more reason why you should be holding Bitcoin spot and like you should be holding it in your own custody. You get access to. Way more financial products. If you hold the Bitcoin yourself, there's bitcoin defi. You can make yield on it, you can loan it out, you can borrow against it. There's a whole bunch of things you can do with it that you cannot do if it is just in an ETF, you're just getting exposure through owning an ETF. That is one aspect to the market has solved the whole private key issue. And the kidnapping issue, like I use a service called casa. It's like only like $1,500 a year, $2,000 a year, peanuts compared to the value of my crypto portfolio. And they have this protocol where if I was to get kidnapped, there's this whole multi-party computation with like FaceTime confirmation that needs to happen before I get access to my crypto. So it just rules out the possibility of kidnapping and. The scenario sounds extreme, but the product they provide to get the protection you need is actually dead simple. They just kinda mail you a package and it's kinda like a, uh, uh, like a, a cold wallet, like a ledger. It's similar to that, but with other parties involved and like some FaceTime and so you'd keep the most of your crypto like your Bitcoin in a service like that. And then the more volatile stuff, you can keep that within personal custody. And yeah, maybe if you got kidnapped, they are going to get that. But, um, no one's going to be kidnapping you for like a small percentage of your, of your net worth. So what I'm getting at here is the market has basically solved this problem. 15 years ago, there was this thing where like people would have their private keys on their computer and they would toss out their computer, but no one's doing that anymore. People get how important the assets are, so they are making sure that they are managed their, they manage their keys properly. Does that make sense?

Sean Weisbrot: Yeah. I feel like there's a lot of issues overcome with this. I've been, uh, an avid fan of blockchain since 2015, and I've seen a number of issues come and go, and one of the issues that I think about for people is when they die. How they can make sure that their family can get access to their wallets, especially when if you work with a lawyer, that lawyer could just take the coins if they want to, if they have the password, right? So how do you protect that? I know this is not really your business, but I'm not sure if you've ever thought about this or, um, if anyone you're working with has ever thought about this.

Frank Hepworth: Yeah, there, there are several op several services in the market already for this. Um, you can go to the institutional grade custodians, like fire blocks. You can go to a solution like I was talking about, provided by casa. Like they independently cannot access your crypto. It's like they are going to have part access to it, but it's going to require, um, collaboration with say the person in your will and in your will you would put in like half of the code and then in a bank deposit pot. Bank deposit box, you'd put in another half of the code and then the two would need to combine, and then they would go to your custodian and then the beneficiaries will get access to your crypto. It sounds a bit confusing, but it's actually no less difficult than what you'd need to do to pass on your financial assets. Through your, through your estate. And so the market is actually already solved for these issues. If you were just to google, like crypto, like uh, estate solutions, there's, there's so many companies that are solving for this now. So these were issues maybe five, 10 years ago, and people are not aware to these solutions, so they think it still is an issue, but when you actually have a decent amount of crypto and you wanna figure it out, you can just Google for it and there's quite a few solutions.

Sean Weisbrot: Okay, let's, let's go back a little bit more to. Education because I feel like one of the biggest issues with the crypto industry is that people are constantly just not sure there's not enough education, but then they hear, wow, this thing called Solana went up a thousand percent this year. And they are like, I do not even know what Solana is. Um. What do you say to these people who want in but have no understanding of that and do not, do not know about the ETFs, or they have no access for ETFs? they are thinking about getting into crypto, obviously you talk about the lower cap coins. Those are obviously ones that they have to actually acquire the coin itself. Uh, what do you tell those people?

Frank Hepworth: I would ask them how serious they are to start with, like if it's just some curiosity, because if it's just some curiosity, then I'm not going to. Give them too much advice because you should just follow your curiosity. And for a lot of people doing this yourself is something that sounds good when the price is going up, but when the price goes down, you're, you lose your interest. And so your options really are to go and talk to someone like us who is, who is going to like, hold your hand through the process and give you the systems you need to just stay on top of the market even when emotionally you do not want to. But you know, we, we do not do that for free. Like we charge for that. If you do not wanna go with a service like ours, then you, you're going to have to decide for yourself how much you care. Some people love crypto. They, they obsess over it. Like the guys that we hire, they are like that. They do not hire a company like ours. They take it upon themselves to go all in on the market and figure out everything about it. And they make a lot of money from, from doing that. But people all the time say they wanna make money, but not at the expense of. Their job or trading stocks or spending time with family or going to university. And so they are curious about crypto, but they are not willing to make the sacrifice to do it themselves. And I think that's fine. And so for those people, I would leave them to their own, to their own devices and be like, Hey. Yep. Uh, if you wanna get started, buy some Bitcoin, maybe some E, those are the big blue chips. they are both fantastic. Good fundamentals. And then if you're curious, like reach back out to me and we can talk a bit more. And if you're like finding this is taking too much time and you're really serious, then, then you can approach a company like ours because we're going to make it a bit more systematic for you. But that's not for everybody.

Sean Weisbrot: So. Your ideal client. I'm, I'm just trying to get a sense of who your ideal client is and what you're actually doing for them. You said that you hold their hand through the process of, of getting them to a point where they can. Manage their own portfolio and do their own trading, or is your focus on them building wealth through trading or building wealth? Through holding and you know, saying, okay, I, I believe based on these fundamentals, that this one's going to do well, and then they just sit on it and hold it. Like, what is your goal for your clients?

Frank Hepworth: Yeah, yeah, for our clients. Who, by the way, we want them to be typically guys who have, or girls often, often women, uh, who have a decent amount of capital, but not the time nor the interest to really figure out the ca the crypto market themselves. They've got say 50 K, a hundred K, 500 k. We've even had people come in with like three mil, five mil, and. They get it at an intuitive level that the crypto market is here to stay and that there is only progress ahead and asset valuations are going to continue going up, but I've got, I've got kids, I've got grandkids, I've got my hobbies, I've got golf. This is not my thing. I'm already doing something else. My business that I'm already making money with, I just have this capital. What do I need to do to make money in crypto with this capital? And so then we put them into a system and the goal is that when they follow our system, their crypto portfolio gets managed in a way that is that intelligent portfolio exposure I was talking about before. So people sometimes come in to us. Trying to like master the crypto casino and for sure there is a casino element to some aspects of the market, but there's also like fantastic. Businesses building in the asset class or with the technology, the, the blockchain technology, of course, and these assets are compelling investments and you can structure a portfolio through the steps that we show you, like through the asset picks that we put out, through the research that we put out, put out through the calls that we do with you. We handhold you as you go through this process of managing and building a, a crypto portfolio with the idea that you're not doing it blindly so that when the cycle is happening, which is currently happening. You've taken positions in the market and your portfolio is appreciating more aggressively than any other portfolio in the market. And then once we reach the top of this cycle, which we will like, it's, it's not going to go up forever. And we are in a cycle. You know, you're taking profit on that portfolio and you're moving it into, we, we do not recommend moving it out of the. The crypto sphere, like we, we say like you should keep your capital on chain unless you wanna buy a house or a car or something. Um, keep that capital on chain and then move it into products that are going to pay you yield or give you some sort of exposure to benefit while we go into the bear cycle, which will happen probably sometime 2026.

Sean Weisbrot: So let's talk a little bit more about the cycle. Because I watch it every day, and so a year ago my fiance taught me about trading gold on a daily, daily chart. And so it was at that time that I paid for Trading View and I started to look not only at Gold, but also U-S-D-E-U-R and and a few other cryptocurrencies as well. So I'm constantly every day looking at, you know, what's the dollar doing and kind of how is that affecting the other things. Okay. So I'm also looking at Bitcoin, Ethereum and XRP. Solana. Carano, Ondo. Those are my, the ones that I look at. So I'm looking at these things and oftentimes I will see the daily chart. So I'm looking at the, the daily, I do not know what you look at, but I look at the one day, uh, view. And I can see generally, okay, it's going up. It's going up, it's going up. For example, Ethereum went to nearly $3,900, and then you start to see over the next day or so, it kind of loses steam, and then it starts to go down and it drops. I think it's like 3,600 right now today. And then the question is, does it go back up more? Because I, I've seen that these trading platforms will appropriately screw with you in order to make you think that you're going to lose everything. And then you sell, which then gives profit to the larger people that are not willing to, you know, get out because they see the longer thing or they are, they are making the market so they see this thing. So when you're working with people, are you. Making them aware of these shorter term things or are you just looking for what you perceive to be the top of the cycle for that multi-year thing and then, hey, take some profit? Or are you saying, Hey, take some profit as it's going up to hedge your bet in case it goes down suddenly in case we are wrong, in case the, the fundamentals change in the global economy, et cetera. Like, so how do you. Perceive those things. And what, what's your strategy?

Frank Hepworth: So we do both and I'll explain why. So on our team, we have a lot of experts, guys who are either running a crypto hedge fund right now, or who have run crypto hedge funds in the past. We've got guys on my team that consult like, like Jeff on my team, he consults other hedge funds about how to do their liquidity strategies in. The primary markets in Defi, and so these guys are really advanced and so what that means for our customer base is that for most of them, they want a bit more of a buy and hold strategy where they are concerned more so about the cycle and taking profits not too regularly on smaller mid blue chip assets. On the other side, we do have about 25% of our customer base who are come into it really wanting to. Like become somebody who, I would employ somebody who's on my team. Like they think that they want to become a full-time crypto investor, or they want to start their own hedge fund, or they want to do it for their friends. And so for them, they are going to work with my team and they are going to be looking at the day-to-day and the technical analysis and making more detailed plays from that analysis. I think that. That is honestly not the best approach for most of our clients. It's not the approach I follow myself. I think when you get into the six figure, seven figure eight figure portfolio range, typically you're not, you did not get that money from sitting on your computer all day doing technical analysis. It usually came from a business or something else that you have going on in your life. So you do not really have the time needed to do this technical analysis to be monitoring the macro and the micro at this level to make day-to-day trading. Or even week to week trading profitable because when you're trading on such short timeframes, exactly like you said, you're actually competing against other traders. And these are guys who are doing it eight hours, 10 hours, 12 hours a day. And so if you're not going to compete at that level in that game, it's going to be difficult to win. Even with the help of our team, you're going to be competing against like my team basically. Which would be tough. These guys do it. they are young. This is what they do every day, seven days a week. So for most of our clients, and myself included, I focus more on the macro and the cycle. So there's plenty of screenshots or like videos of me when Bitcoin was at 17 K in 2023. I'm saying like guys, like this is pretty much the bottom of the cycle. I can not see much going much lower. Maybe it does, but like this is it, right? Like 2021 was the high, two years later, 2023 is going to be the low. It's November. It's December. Like uh, no, this is a green light. Like we should really start be buying and so like Bitcoin's up seven x since then. So you could be up seven x in your portfolio if all you did was just like. Buy Bitcoin when it seemed like a reasonable time to buy Bitcoin. And I know like long-term advice or like the, the advice that's been around in the financial markets forever is like, do not try and time the market just like be in the market. I, I do not think that's true for crypto. I think that these cycles are, are super predictable. I think that they follow the M two, I think that they follow the, the haling cycle and I think you are crazy. Crazy if you do not play the cycles, you do not have to time them perfectly, but you can be 50% approximately, right? Like so the 2023 low for Bitcoin was 17 K. You could have been buying anywhere up to like 30 K and and think how much you'd be up right now now that we're sitting at a 115 K and you could be taking profits now and you could com be completely done with the cycle, even though I think we're going to go up to 200 k plus this cycle. You could exit right now and you've still done a five x, but people. do not do that, even though it's dead simple. they are going to wait till Bitcoin's at like 150 K, 170 5K, and then they are going to go in. Even though for the past 15 years, this cycle to the crypto economy has been that predictable. And so that's where I think we are in the cycle, and that's what I try and encourage our clients to move towards. More so than the x trading because one is actually dead simple that you can do without much time. We say two hours a week, and you've got the market. Covered, like you've got the entire thing covered with our resources, our team, and then you taking the actions on the resources and the effort that we give you two hours a week, you are like, you are doing a, a good return this cycle. Um, and it's pretty, it's pretty simple and so I'd encourage our clients to go that way rather than the intraday trading for sure.

Sean Weisbrot: So if someone has a million dollars cash and they are serious about being involved in the market, what do you tell them? What's your advice to them specifically? Their goal is I am willing to be risky. I want to make a lot more money with this. I want to take this million and I wanna turn it into 10 million in this cycle, and I wanna retire from that money.

Frank Hepworth: Easy. So, um, you know, they are going to come into our resources, they are going to see how to allocate themselves, and they'll talk to my team to know where they fit in. Because for some people, a million dollars is all their money, and for some people a million dollars is a drop in their bucket. And so that would sort of dictate, well, it's fair, right? Like. You're telling me you're coming to us and you're saying like, I have a million dollars. It does not even matter if it's all my money or not. I want to do 10 x. It's like, okay, well, you know, Bitcoin is not going to do a 10 X from here, so you're going to have to go maybe like 30, 40% blue chips. And then 60 70% are going to be in low caps and some mid-caps. Mid-caps, like hype. Midcaps like ave that are going to do well with the cycle generally, but they are a beta, so if the cycle does well, they are going to do better than the, the mainstay blue chips like Ethereum and Bitcoin. And then the, like, maybe like 20% of your portfolio is that out of the, the 70% and then 50% are going to have to be low caps. And so what low caps, I'm saying. The crypto ai, low caps, I'm saying any asset right now that has an attachment to a business that is earning revenue and is doing revenue share. That's very important and popular right now in the market. And there's a lot of projects that are coming out in the the 50 to 1, 25, 1 50 mil market cap range that. Are just fantastic asymmetric bets. So for example, if the cycle continues going up, like the max draw down, these projects have, like if they completely screw up, is maybe 50%, 75%. And so you'll lose most of your money. But the upside is if they are good, is five. A hundred percent. 1000%, 5000%. And if you're starting from a hundred mil market cap, of which there are many options, you know, a 10 XA thousand percent gain only puts you at a billion market cap. And a billion market cap, I think does not even enter the top 75 top crypto assets right now. There's like XRP at uh, however many tens of billions maybe. Maybe a hundred billion. Now E is 400 billion Bitcoin, maybe like 2.5 trillion. So for these assets to come to 1 billion and and you get a thousand percent return and they are not actually that big, it's actually a fantastic risk reward. It's what you call an asymmetric investment. And if you're trying to do a 10 x on million dollars right now, that's what you need to be doing and it sounds kind of crazy and aggressive. And so if a million dollars is all your money, then I probably would not do it. But if a million dollars was maybe 1% of your net worth, I would say like do that. Like you, there's actually a pretty good chance you can 10 x your money if you have the stomach for that volatility. 'cause on the way to the 10 X, like it's going to go to like five X and then two x, and then it's like, do I wanna, when you get back to three X, it's like, should I just take my three X and be good? And then you'd have to go through that crazy approach up to the 10 x, but completely possible. But at this stage, in this cycle, it's going to be more aggressive portfolio for sure.

Sean Weisbrot: What's the most important thing you've learned,

Frank Hepworth: learned in your career? The most important thing I've learned in my career. For life. The most important thing I've learned in my career is it's a difficult question to answer right now. I would say do not make assumptions when it comes to people or opportunity, but that answer might change in a couple days after I've thought about this question more, but right now I see that a lot of people, like a lot of our clients, make assumptions around what the crypto market is and what it is not. And these assumptions are costing them a lot of money and also a lot of stress. Um, when I'm running this business, as I've grown this business, we've helped over a thousand clients. Now I make assumptions with some of our team members that I should not have, and that has cost the growth of our business as well. And so I find that for me, as running the business and then the clients of the business, we're all making these assumptions towards. What we can do and the people around us that we can do those things with, and these assumptions are kind of dangerous and we just need to check them right now. That would be my answer.