Tastytrade founder and Tastylive CEO Tom Sosnoff discusses investing in crypto and which trades he finds interesting.

Tom Sosnoff, CEO of Tastylive and founder of Tastytrade, discussed the evolving role of cryptocurrencies as a legitimate asset class for portfolio diversification. He noted that while crypto offers higher volatility and potential upside, it remains a relatively small and limited market, especially due to regulatory constraints and the lack of derivatives or margin trading in the cash market. Sosnoff also commented on how recent regulatory developments are lending more legitimacy to the sector, potentially paving the way for greater digitization and tokenization in financial markets.

Beyond crypto, Sosnoff highlighted current investment opportunities, expressing a preference for bonds due to their relative value compared to stocks. He also identified short positions in gold and crude oil as interesting trades and suggested that some major tech stocks, such as Apple, may be undervalued relative to others like Meta or Microsoft.

Crypto can offer portfolio diversification, says Tastylive CEO

I think we're all trying to figure that. So that's like the million dollar question. I think they are they have become a legitimate asset class and a legitimate diversification because they offer in a traditional sense they offer a higher level of volatility which means they have a higher upside. And that's why they're a decent diversification to a normal portfolio. What I will say though is that there's a lot of limitations with respect to crypto. One is that it's a relatively small asset class. And the other is that in in the cash marketplace it's a pretty dead product meaning it can't you can't margin it. There's no real derivatives of it. So it has it's very limited. But it's also the shiny new toy. But this regulation that has come out to what extent does it lend more legitimacy which is exactly what this asset class needs. Well it will. What it does is it legitimizes some of the technology but it also potentially brings digitization and tokenization into play in the coming years. So what it's essentially doing is it's opening up like from everything from funding to money transfers to everything else. It's really opening up a door that has been you know barely cracked open. But Tom we've heard this for so many years. Everything is going to be tokenized. It's not really happening at large scale. Why not. Regular regular. You have in the U.K. tough regulators in the US. We've had tough regulators until this current administration with respect to crypto. So it's really been a regulatory. It's really been a regulatory limitation. But the fences are kind of being lowered a little bit. A couple of years back I was convinced that we'd be buying a stake of the Empire State Building in the shard. It'll be tokenized and we could all buy a stake in these famous buildings. Did you buy one. Obviously it was not forthcoming. Some of that got put on ice with all the volatility that was so. But let me just circle back to what we're saying in terms of one of the big things in Europe and that is the diversification to defense to infrastructure in Europe. How is this having some bearing on what you're doing in terms of building software platforms. Is it really now a feature where you need to build more appetite for a program here. Well it's it's I mean obviously globalization is happening. Every platform and every investor but equities as well. Everything it doesn't matter. But the cool thing about today's technology and the stuff that we're building and we're not the only firm building this but we've been a leader for the last 25 years is we're introducing from a single platform every single product so that anyone any single person who's watching the shows individual investor can essentially participate in any single market with any single strategy. And that's something that's always been limited before to various different groups. It's been segregated. And now it's it's coming to just any individual's portfolio. So you know we're playing catch up. Do you want to talk to us about one of the best trades you're seeing right now. What's what's out there. Well that's very subjective but I'll tell you what I like right now. I'll give you three trades that I'm kind of that are that to me are interesting. I have my pin poised. Well I mean you talked a lot of watching you guys before I came on. You talked a lot about the bond market and the recent news in the Fed and everything else. I actually love the bonds here because they're cheap relative to stocks. So on it and they haven't had any kind of rally and they're on there. They're on there. They're on their butts. They're on their lows. And so I like the bond market here. And there's lots of different ways to play the bond market. But it's a very liquid 50 trillion dollar marketplace. Mostly futures marketplace. But I like the bond market. And if you're going to stay in the commodity world I also like the short side. I know there's been a lot of news on it but I'm a contrarian. I like the short side of gold and crude oil here. Both. I like both shorts. And this morning gold's gold's down a little bit and crude oil is pretty much unchanged. But they they're both pretty rich on a relative basis. Thank goodness someone is on the other side of this trade. Good. And then in the stock market you know it's obviously very mixed. I think some of the tech stocks are rich right now. But I also think there's a few that on a relative basis some of the big names that are cheap. And I think like for example I think Apple's cheap relative to for example Meta or Microsoft if you're looking at some of the big seven.

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