Many speculators who jumped on the Bitcoin bandwagon in the past few months were badly burned this week as the price fell 30 percent to around $ 35,000 on Friday afternoon on concerns about energy use and regulation fell to around $ 41,000 – twice as high in early December.

Dogecoin was extremely volatile as the market took its cue from Tesla founder Elon Musk’s tweets.

“Don’t let people set up their own accounts and get their friends in the pub to put them in shitcoin after shitcoin,” Carnegie told the advisors and brokers room.

[Bitcoin] will be the gateway drug for everyone … but for anyone who’s had a decent amount of time in this room, it really is a sideline.

– Mark Carnegie, venture capitalist

“Find a way to put your arm around these people and come up with simple, old-fashioned dollar cost averaging strategies that will slow them down and protect them from absolute scuz-buckets.”

Mr. Carnegie sympathized with consultants who were struggling to keep up with the fast-paced world of blockchain, but advised them to spend some time in what he described as rapidly growing. “I would urge people not to be zero here,” he said.

He recently launched a new fund, the MHC Digital Asset Fund, which holds Bitcoin as a “momentum trade” but is looking for better opportunities for other blockchain ideas created using smart contracts on Ethereum.

“I’m a crypto maximalist and a bitcoin minimalist,” Carnegie stated.

“Unfortunately for you, [bitcoin] will be the gateway drug for everyone, making up 90 percent of the conversation – but for anyone who’s had a decent amount of time in this room, it really is a sideshow. “

Banks watch out

The amount of entrepreneurial talent invested in redesigning a new architecture for the financial system will put real pressure on the big banks in the next decade, he suggested.

Pointing out Ethereum founder Vitalik Buterin and outside the blockchain, Stripe founders Patrick and John Collison, Mr. Carnegie said, “These guys are absolutely top-notch Jesse Owens-quality businessmen,” and compared them to the Board of Directors and Guys “Running the four existing banks in Australia is a kick-a-cripple day. “

“The existing banking system, the ability for them to stop the dam break, is over,” he added. “These people are going to clean up the existing banking system … The world financial system is changing incredibly quickly.”

Crypto today was like the internet in the late 1990s where “it was determined it wasn’t going to go away, it just wasn’t clear what to expect”. He said his promise beyond Bitcoin was to “make the speed of all financial transactions instantly and security near perfect … with no marginal costs”.

For discerning investors, there are plenty of opportunities in the crypto derivatives markets because “there is a ton of stupid retail client money in it, distorting the options book,” and despite the massive volatility this week, the US dollar hedging strategies the fund had settled as the pressure to sell increased – a positive sign. “Most of the pens were held last night.”

The emergence of crypto assets has geopolitical implications that could alter the balance of monetary power between the United States and China and pose challenges for central banks, Carnegie said.

“It’s like giving up the gold standard after World War I … This is the situation we are in right now, and this stuff comes absolutely wild from outside the four walls of the existing financial system.”

He admitted that keeping up with new technological developments in the markets is exhausting but said it would be a mistake not to try because customers need advice.

“When I understood that DeFi and smart contracts were a real thing, the tidal wave was way behind me, I climbed a tree and tried to hold on,” he said.

“The most important thing is: this is coming. Your customers … are going to have all sorts of weird people, with all sorts of weird things, and you have this existential question that is, for sure, you can push and push and push and say ‘no’ – but in the face of such a tidal wave next to you I just don’t see this as a functional way for you guys to deal with it. “