Happy Sunday, and welcome to Benzinga’s financial advisor newsletter.

Today we’re featuring an interview with financial advisor Tyrone Ross Jr., about how he educates his clients about cryptocurrencies and especially Bitcoin. If you’d like yourself and your business to be featured in an upcoming issue, click here to send us an email.

So, let’s get to it!

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INDUSTRY CHATTER

Financial Advisor Calls Stocks 'Dinosaur Bones' — But Likes Some ETFs

Tyrone Ross Jr. sat down with Benzinga's Chief Content Officer Brad Olesen in a multipart interview series to discuss how his financial planning firm, 401 Financial, is educating clients about cryptocurrency and Bitcoin (BTC/USD) and avoiding some of the pitfalls of the traditional financial advisory industry. He also made it clear where he stands when it comes to advising clients on how they should build a portfolio.

"What we really try to do is one, stop them from over-trading," Ross says with regards to how he advises clients in constructing how their assets are managed.

He invoked an anecdote in which there was one client he came across who had performed over 14,000 transactions. The "beauty" of 401's model, he said, is that it gives advice, and ultimately clients can make their own decisions. 401 doesn't benefit if you trade more or less – it's just advice that comes monthly compared to some advisors who could meet with clients as little as once or twice.  

401 Financial's name is borne from a former track coach who advised running 401 yards through the line — not just the 400. The origin story began following Tyrone's years at Bank of America Corp (BAC)-owned Merrill Lynch where he witnessed incredible success stories. The failings, specifically in accounting for crypto-related exposure, served to light the fire.

"I did realize there, though, when I was shown Bitcoin for the first time, I couldn’t unsee it." Despite those shortcomings, what left an indelible mark on Tyrone during his time at Merrill through 2016 was the "value" of financial planning. "That team did financial planning like I’ve never seen it to this day," Ross says.

But it's not all crypto, all the time for this financial advisor — despite the fact that he calls himself the "biggest crypto hippie you'll ever meet." While he considers traditional assets and stocks "dinosaur" bones, he adds, "if you want it (stocks), we give you exposure."

Among the assets he usually advises clients to pursue are some larger, broad market ETFs like the Vanguard S&P 500 ETF (VOO) and a bit of emerging markets depending on age and where they are in their lives.

He says the beauty of his advice-only model is that "we’re not trying to acquire your assets" or "sell you anything" so 401 can get you into the "lowest cost ever." Ultimately, clients often know what they're going to get with Ross given his open stance on cryptocurrency and specifically Bitcoin, he says.

Tyrone and his team want to educate as much as anything else, whether it's around dollar cost averaging or learning how to gain direct access to Bitcoin instead of buying into Bitcoin ETFs, trusts and derivatives like iShares Bitcoin Trust ETF (IBIT), ProShares Bitcoin ETF (BITO), Fidelity Wise Origin Bitcoin Fund (FBTC) or similar funds. "I don’t like the (crypto) ETFs, because, again, I think it’s a way to siphon fees on top of buying crypto."

401 has a message for those looking to start their financial journey: "We want to work with folks that have never worked with an advisor before. We don't have any minimums … and if you can't afford it, we'll take you on anyway until you can afford it. "

As Bitcoin crosses the $100,000 mark, and the crypto industry’s market value nears $4 trillion, it’s only more likely that those in the market for advisory services will require someone who speaks blockchain in its native tongue.

If you’d like yourself and your business to be featured in an upcoming issue, click here to send us an email.

MARKET RECAP

Fed Cuts Interest Rates, But Powell Spoils Santa Claus Rally; Dollar Surges To Over 2-Year High, Bitcoin Sinks Below $100,000: This Week In The Market

In a December meeting that will be remembered for its seismic impact on markets, the Federal Reserve delivered a widely anticipated 25-basis-point interest rate cut Wednesday, bringing the target range to 4.25%-4.5%.

Yet, it wasn't the rate cut itself that shocked Wall Street: it was the Fed’s revised economic forecasts and Chair Jerome Powell's stance that crushed expectations for deeper rate cuts in 2025.

In its December economic forecasts, the Fed raised inflation projections for 2025, signaling that only two rate cuts might be on the table for the year. This marked a dramatic shift from the expectations that had fueled investor optimism in recent weeks.

Powell cemented this hawkish tone during the press conference, stating that after a 100-basis-point reduction in 2024, the Fed would enter a “new phase” of monetary policy. With rates nearing neutral levels, Powell emphasized the importance of a cautious approach, erasing any lingering hopes for aggressive easing.

In true Grinch fashion, Powell's message drained investor hopes for a Santa Claus Rally, a seasonal market trend that sees equities showing strong gains in the second half of December.

The S&P 500 — as tracked by the SPDR S&P 500 ETF Trust (SPY) — tumbled 3%, recording its worst single-day drop since September 2022, while the U.S. Dollar Index surged to a two-year high as investors recalibrated their expectations.

Bitcoin (BTC/USD) demonstrated significant sensitivity to macroeconomic developments, dropping below $100,000 after reaching a record high of $108,388 one day prior to the Federal Reserve meeting.

Friday brought a brief reprieve as the Fed's preferred inflation gauge for November came in lower than expected. Yet the Fed's sting has left lingering wounds that only sustained progress in disinflation can heal.

The focus now shifts to 2025. Investors are bracing for the fiscal policies of the incoming Trump administration, the potential for a government shutdown and the broader implications of Fed monetary policy.

ChargePoint-GM Collaboration

ChargePoint Holdings Inc. (CHPT) and General Motors Co. (GM) partnered to deploy ultra-fast EV charging ports at key locations across the U.S. This strategic move aims to enhance electric vehicle infrastructure and accelerate EV adoption nationwide.

Palantir Defies Gravity

Palantir Technologies Inc. (PLTR)’s stock surged Friday after securing a key U.S. Army deal and joining the Nasdaq-100 index. The stock's year-to-date gains now top 340%.

THE WEEK AHEAD

Christmas, no earnings, but a few kewy economic figures

Economic Data

• Monday: US consumer confidence numbers

• Tuesday: US monthly new home sales

• Wednesday: Christmas Day

• Thursday: US initial jobless claims

• Friday: US preliminary goods trade balance for November

Earnings

No earnings of note due to the Christmas holiday

Click here for the full calendar of economic data and earnings reports.

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