Stabilize the stablecoin with Crypto Megan

GM.

Last week was a truly wild ride in the world of crypto and the sector is still feeling the reverberations from the collapse of FTX. Other exchanges have closed and hacks are happening all over the place; it really is the wild west right now. But that's what happens when there are no rules in place (broadly speaking).

A couple of weeks ago I was in Lisbon for Web Summit and I got to sit down with crypto influencer and consultant, Megan Nilsson (AKA Crypto Megan), who is on a world tour to spread the gospel of crypto to women. We talked about her job, empowering women to take control of their financial futures, and crypto regulations.

I've got a 2800-word, 11-minute read for you today.

- Erin, @erin_gee

Erin Gee: Tell me a bit about what you do as a "crypto influencer".

Megan Nilsson: Mainly I'm just trying to spread the message [of investing in crypto] and propel the narrative and get people involved in a meaningful way. I go by Crypto Megan and I'm a high-end consultant for Crypto and NFTs for portfolios; allocations for celebrities, investors, and companies, and also helping them bridge from Web2 to Web3, because this is naturally the next step after getting involved in investing, which is what I talk about a lot too. A lot of people say, "Oh, the investing side," they look down on it. "You shouldn't get involved in crypto as an investment, as a financial opportunity."

And it's like, well yeah, it is a big, massive opportunity. A lot of people start getting their feet wet by investing. And then they discover all of the amazing things blockchain technology can provide along the way. Community, their skill set, where they can fit in, where they can work within the ecosystem. So now I'm on a world tour because I decided I don't want all that knowledge just reserved for people at the top. Because that's the second layer of the internet. This is now the people's movement, so I want to help educate and advocate for women.

EG: So what's your background? How did you come into this role?

MN: I did a masters in Spain in 2009 because we live in Spain. It was founded by Google; it was the first class and meant to digitize companies. At the time, they were all brick and mortar in Spain; it was so behind the US. So they launched this initiative and said, "We need to go digital." I did that masters and I started working with startups, and some years later they flew out blockchain developers to talk at our class reunion, the first class reunion. It was like, "Oh my God, the seed, it got planted." At that moment, I'm looking around like, "Are you guys hearing what I'm hearing? This is insane. This is incredible." So then that's when the seed got planted and I started looking into investing. I got really interested in [traditional] investing and nothing captured my interest. But when I got to crypto, and I kept coming back to it, it was just like, this is revolutionary. I need to keep going. I went down that rabbit hole, and a lot of people say this, I just never came back.

EG: Do you find that with the crypto winter here, it's been harder to get buy-in from people who might be interested in investing in crypto because they're trying to be a little bit more liquid right now?

MN: Yeah, I think some people are taking the cash approach, which is good. I always tell my clients that they need to keep 20 to 30% at least in cash, or we need to prepare for what could happen. And we're in really uncharted territory in the world. It's the first macroeconomic bear market coupled with a crypto bear market. We've never had that two together in one. But at the same time, I'm looking at the charts as well. And it's, for me, one of the five best buying opportunities in Bitcoin's history. I call it the golden zone. So, my clients, we're laddering in at these levels because I really do believe that if you believe in the trajectory of Bitcoin where it's headed, it doesn't matter if you get 19, 25, 16. I mean, this is a long game.

EG: I went to a press conference yesterday with Changpeng Zhao (CZ) the CEO from Binance, and one of the questions that someone posed to him was, "We never really expected the traditional stock market and crypto to go in the same pattern. Can you explain why that might be the case?" And he said that that assumption was correct and that we assumed that they would be different and that crypto would be quote-unquote "separate from inflation". But because people need the liquidity, they're selling; people who are investing in crypto are also investing in traditional stocks so they're selling their stocks for liquidity, but they're also selling their crypto, which is causing the two markets to move together. And I think you're right that crypto is a natural next step for people who are traditional investors. You obviously have a lot of traditional investing clients, but do you have a lot of people who are new and doing the opposite or just going straight into crypto only?

MN: The high-end clients that I consult for all come from the traditional finance world. Some of them are actually hedge funds that have no idea about crypto and they want help with that. So they're very used to market fluctuations and this kind of thing. But I wanted to comment on what you said about CZ and speaking to the coupling. They're very, very correlated. I mean, it's come to the point where we're just waiting for the Fed to speak and we know what's happening. I'm telling my group, "Hey, they're announcing the basis points tomorrow. We have an FOMC meeting…" I mean, we're just only relying on that. And it's the theoretical vision and what Bitcoin should be is not the reality right now.

We're too early for that, first of all, and it's going to take time. So right now, it's still considered a risk on assets. All risk on assets are affected when recessions hit, when things are bad. So we don't know when that will be, but all I can help my clients do is prepare for when. Because the thing about crypto that's different from stocks is when the market turns around it can take off. And oftentimes those people that were waiting for those magic numbers, they'll get back in at 45,000, 50,000. It happens every time because it runs away from you. So being positioned is the best strategy for me in that way. But yeah, it's still highly correlated, and I think it's going to take quite a lot of time before we do the decoupling so to speak.

EG: I think a lot of that has to do with just people being traditional and then moving to crypto and just not having the trust in the market in the same way that they might have in the stock market because it is so new.

MN: There's a lot of fear and, oh my God, volatility is just your wildest rollercoaster at the theme park. It's like the biggest drop you could ever imagine. And that scares people, and that's understandable. If you don't have the conviction and the knowledge and the understanding of what you're investing in, it's so normal to be fearful and to settle in that fear. That's the saddest part because that's when the market generally turns around in my experience. I've been around for quite a few bear markets, and so I've seen what it looks like at the bottom, and it's scary and it's dreary for most people, so that's one of the signals apart from all of the chart indicators. I mean, all I see on the charts is that some of them are a little bit concerning in the long term, but right now we're very maxed out in the selling. I mean, it was the least volatile October in all of Bitcoin's history. So that's something interesting as well. What’s next is just boiling under the surface right now, waiting for something to happen.

EG: I think a change is coming, but what that is is going to be interesting. So what are your thoughts on regulating crypto in a similar way that traditional stocks are? Or should it be? Where should regulations go?

MN: I think that regulation is important in many aspects. Not just for investing, but also for creators. Right now, everybody's feeling around in the dark because they don't know what the Fed is going to consider a security or a commodity or how is this all going to pan out. So we just need some kind of guidelines. That's why Kevin O'Leary always says there are trillions of dollars waiting on the sidelines, but they don't want to touch it because they don't know what's going to happen. So, everybody that's able to get in now and able to take that risk, so to speak, it's going to pay off pretty well for them, I believe. And that's how I'm acting.

But yeah, as far as regulation, I mean, I think that the US is very much interested in not stifling innovation because they don't want to lose leadership. I went to the Binance gala in Paris and there were a lot of regulators, including homeland security. It was pretty interesting. They send people from the government to learn from these events, so I think they're trying to do it right. Whether they get it right or not…I don't think they're going to do something that's going to have a really, really negative impact on crypto. I think they need to start with stablecoins and go from there.

EG: In Canada, one of the members of parliament proposed a bill where she wanted to create these guidelines for a consultation with industry participants in the Web3 space. So if you were involved in a similar type of exercise, what advice would you give to government on potential regulations?

MN: That's a tough one because the whole point of having all this power for this decentralized new financial economy is that you need to also have the responsibility to educate yourself. And so it's like, where do we step in for the government that it's not too heavy-handed? Because the whole point is that now people can make their own decisions; so somewhere in between. Something like LUNA is pretty tragic to see. I would really like to actually see some regulation in the stablecoin area, just so people know that when they're in stablecoins and they're doing these kinds of different things, they're safer and more secure with that.

But then I did a panel with some investors, and some of them said there will always be the crypto cowboys. There will be a part of the crypto industry that wants to act in a total decentralized way. And so I think I really want to stress again, I would tell them to start with the stablecoins. Start there and then pan into the different areas because that's what's most urgent in my mind right now. Because they're getting the yields through there, they're using them as a store for their own fiat. So I think that that needs to get under control because people shouldn't be worried about losing money because they're in a stablecoin. Make sure it's backed, regulated, that there's actually something behind it so that tt's not a Ponzi scheme. We start there and we move into other categories. That's what I would say.

EG: Do you have any thoughts on CBDCs?

MN: I have a lot of thoughts on them. Being in the Web3 world and the power and what I've been able to do with my own finances through being able to control my money, the thought of a CBDC, for me, is not great. I know they've been experimenting in China. You can actually set expiration dates on the money. You can do so many more things and I just feel like that's headed in the wrong direction. It's the same old system with new, better technology. So I don't really think that if they're implemented in the way that it seems like they may be, that it's going to be the best for this world. So I'm not a fan, but hopefully, we can come up with some kind of happy medium, something that doesn't take control away from the people completely. Because then we're headed backward, right?

EG: You were saying that you want to bring crypto to the masses and really engage women more in this space. So how do you plan on doing that?

MN: Well, I've seen that women get involved through more person-to-person contact. That's one of the reasons why I'm on this tour. The majority of the men that I consult for are middle-aged white males, the traditional finance society. So I took their wives aside and I would say, "Hey, you and I can do our own thing," because I know it's not nice to have to depend on somebody. Financial independence is huge for me so I want to help them. These women say, "Oh, no, no, I don't do tech. I don't do finances. That's my husband's thing."

I say to these women, "Give me 30 minutes. Not to change your mind, just to have that initial conversation." Then it starts to click and they think about it and their faces lights up. Like, "Wow. Okay. Tell me more." They're almost more go-getter than the men in that way. I've been really surprised. So then I saw right then and there, I need to go on this tour. I need to show them that they can have the courage to step up and take their space at the table when previously it hasn't been so welcoming to them because we really have a chance to get it right this time. So I think it's important for them to learn about these new financial instruments and tools and ways that they can have financial sovereignty and also to create their own independent income streams.

EG: What would you say to people who are crypto skeptics and who say that crypto, particularly investing in crypto, is a Ponzi scheme, that it's just very dangerous for people to participate in? How would you convince them that they're wrong?

MN: I would say give me 30 minutes. I think it's a normal reaction. I think it's so natural…I mean, this looks like a circus from the outside. It really does. And if you're not deep into it ... My mom calls it going into the matrix. She's like, "Are you going into the matrix now?" I'm like, "I'm back, Mom." No, I think it's so normal that people have that perception. That's why I want to appeal to the mainstream, not just the inner Web3 circle. Because I want to help them understand, make it simple, and break it down. We don't need to use all the lingo. This is just the way for you to control your own financial tools, for you to be able to transmit value for the first time.

We can transmit value peer-to-peer for the first time on the internet without an intermediary. And that's huge. So I think it's normal that they think that, but I really want to stress that this is one of the biggest opportunities we may have in our lives, I believe. It's a generational opportunity, both financially and in so many other ways, for women to get involved and bring their skills to the table. I mean, people are just changing their lives. Even artists. They're coming on and they're just coming into their own, taking those risks that they normally wouldn't take to step forward. And that's so powerful. So I would say not to be scared, that this is an opportunity and we need to embrace this opportunity and learn as much as we can before the market turns around.