Crypto and alternative assets, with eyes open

Understand how crypto, gold and other alternatives actually work, check who you are trusting, and size a speculative position you can afford to lose.

Crypto conversations tend to split into two camps: people who think it is the future of money and people who think it is a scam. Neither camp helps you decide what to do with S$2,000 you are curious about. This course explains how blockchains and the main crypto assets actually work, what MAS licensing does and does not protect, and what went wrong at Terra, FTX, Celsius, Hodlnaut and Zipmex. It then covers gold, P2P lending and collectibles with the same questions. You finish with a written policy for how much of your money any speculative asset is allowed to touch.

What you'll be able to do

• Explain in plain words how a blockchain records and confirms a bitcoin payment
• Tell ether, reserve-backed stablecoins, algorithmic stablecoins and other tokens apart by what backs them
• Check whether a crypto exchange is licensed by MAS and list the protections that licence brings
• Write a custody plan covering keys, seed phrases, backups and what happens if you die
• Name the failure behind each of the 2022 collapses and turn them into a red-flag checklist
• Compare physical gold, gold ETFs and gold savings accounts on cost, custody and liquidity
• Write an alternatives policy with a position cap, rebalancing rule and exit rule

Syllabus

Module 1: Understand how a blockchain and bitcoin work

How a shared ledger records payments without a central operator, how mining confirms them, and why bitcoin's price behaves the way it does, so you can explain what you would actually own.

• 1.1 Bitcoin is a shared ledger that nobody runs
• 1.2 Why proof of work makes the ledger hard to rewrite
• 1.3 What gives bitcoin a price, and why it swings
• 1.4 Follow one transaction from wallet to block

Module 2: Tell ether, stablecoins and other tokens apart

How Ethereum differs from bitcoin, what holds a stablecoin's price steady and what can break it, and how to question any other token, so you can sort crypto assets by what actually backs them.

• 2.1 Ethereum runs programs, and ether pays for them
• 2.2 Stablecoins: what holds the peg and what breaks it
• 2.3 Tokens, DeFi and the questions to ask any of them
• 2.4 Classify five crypto assets by what backs them

Module 3: Use a licensed exchange and know what that buys you

How MAS licenses digital payment token services under the Payment Services Act, the consumer protection rules that apply to retail customers, and what a licence cannot protect you from, so you can check any exchange before you deposit.

• 3.1 How MAS licenses crypto exchanges
• 3.2 The protections MAS requires for retail customers
• 3.3 What a licence does not protect you from
• 3.4 Run a licence and terms check on one exchange

Module 4: Hold your own keys, or decide not to

How wallets, private keys and seed phrases work, the risks of holding crypto yourself, and how to plan for loss and inheritance, so you can choose between exchange custody and self-custody on purpose.

• 4.1 A wallet holds keys, not coins
• 4.2 Your seed phrase is the whole account
• 4.3 Mistakes that self-custody does not forgive
• 4.4 Write your custody and inheritance plan

Module 5: Learn from the collapses that cost retail investors money

What went wrong at Terra, FTX, Celsius, Hodlnaut and Zipmex, the common threads between them, and the checks that would have flagged the risks, so you can spot the same patterns next time.

• 5.1 Terra and Luna: a peg held up by an algorithm
• 5.2 FTX: customer money that was not where it should be
• 5.3 Celsius, Hodlnaut and Zipmex: yield from lending your coins
• 5.4 Turn five collapses into your red-flag checklist

Module 6: Weigh gold and the ways to hold it

What gold does and does not do in a portfolio, and the costs and risks of physical bullion, gold ETFs and bank gold savings accounts, so you can compare the ways to hold it on cost, custody and liquidity.

• 6.1 What gold does and does not do
• 6.2 Physical gold: bars, coins, storage and spreads
• 6.3 Gold ETFs and gold savings accounts
• 6.4 Compare three ways to hold gold on cost

Module 7: Check P2P lending and collectibles before you commit

How peer-to-peer and crowdfunding lending works and fails, the costs and risks of collectibles, and how to judge liquidity in any alternative, so you can run the same checks on whatever you are offered next.

• 7.1 P2P lending: you are the bank, and you carry the defaults
• 7.2 Collectibles: watches, art, wine and cards
• 7.3 Liquidity: how fast you can sell and at what price
• 7.4 Run a due diligence check on one alternative

Module 8: Size a speculative position you can live with

How to decide what share of your money a speculative asset may hold, how to rebalance and exit by rule, and what IRAS rules and records apply, so any alternatives you hold stay in proportion.

• 8.1 Start from the loss you can afford
• 8.2 Rebalancing and exit rules, written before you need them
• 8.3 Tax and records for crypto and alternatives
• 8.4 Write your alternatives policy

Frequently asked questions

How long does the course take?

About eight and a half hours across eight modules, including the exercises. Most people finish in three to four weeks at two or three hours a week.

Will you tell me which coins or assets to buy?

No. The course explains how these assets work and how to check them, and never recommends a coin, token, platform or product. It is equally useful if you decide to hold none.

Does this cover crypto scams?

Only in passing. This course is about real assets and real firms that can still fail. Investment scams, including fake crypto platforms, are taught in Scam-proof your money.

Is this financial advice?

No. The course is education and does not replace financial advice. MAS warns that crypto assets are highly risky and you could lose all your money, so speak to a licensed adviser about your own situation.

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