The Pomp Podcast - #1489 Bill Barhydt | This Bitcoin Bull Run Is Just Getting Started

Episode Date: February 19, 2025

Bill Barhydt is the Founder & CEO of Abra. In this conversation we talk about bitcoin, regulation tailwinds, how we think about DeFi for institutions, memecoins, stablecoins, and what Bill is excited about in the future.======================The future is being built today and the future of currency isn’t dollars, euros, pounds, or yen, it’s crypto. And Gemini thinks that’s a great thing. Because a future where money is decentralized, inclusive, and globally accessible, that’s a future that we are anxious to be a part of. Go where dollars won’t. With Gemini. ======================This episode is brought to you by Bitdeer (NASDAQ: BTDR), a global leader in Bitcoin mining and high-performance computing for AI. Led by a seasoned management team, Bitdeer is driving innovation with its proprietary SEALMINER ASICs for Bitcoin mining and has a massive 2.5 GW power portfolio across three continents. Learn more about Bitdeer at www.bitdeer.com======================Polkadot is a scalable, secure, and decentralized blockchain technology aimed at creating Web3. Created by Gavin Wood, co-founder of Ethereum, Polkadot empowers users to build decentralized applications with ease. Backed by industry leaders, making it a preferred choice for big names, Polkadot stands out as a leading choice for investors seeking a reliable, future-proof solution in the growing world of Web3 technology. Learn more at https://polkadot.com/.=======================Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/=======================View 10k+ open startup jobs:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's going on, guys? Today, we've got a great episode with Bill Barhite. He's the founder and CEO of Abra. In this conversation, we talk about what's going on with Bitcoin. Are we actually going to get the regulatory

tailwinds that have been promised? How do we think about DeFi for institutions, family offices, RIAs, and wealthy individuals? And then what is he most excited about moving forward, both for his business, but also crypto in the coming years? This conversation is filled with unique insights, and I think you'll learn a lot. Here's my latest conversation with Bill Barhite. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion.

This podcast is for informational purposes only. isn't dollars, euros, pounds, or yen. It's crypto. And Gemini thinks that's a great thing because a future where money is decentralized, inclusive, and globally accessible, that's a future that we are anxious to be a part of. Gemini teamed up with futurists,

technologists, and designers like award-winning artist Matt Griffin, known for his illustrations for Dune, to craft a vision of the future with crypto at its core. The creative theme, Go Where Dollars Won't, emphasizes exploration, growth, and the crypto market's limitless potential. Whether it's going on that Martian safari

to capture an unforgettable photo of a herd of woolly mammoths grazing the red planet or using Bitcoin to pay for your Lyft pass to go strata skiing down the mountain peak of a breathtaking comet. Whatever adventures we'll be living, one thing is for sure, in a future this fantastic,

the limits of traditional currency simply cannot keep up. Financial innovation will usher in this new frontier and so go where dollars won't with Gemini. Go check them out at Gemini.com. slash go where dollars won't. Again, go check it out at Gemini.com slash go where dollars won't. Today's episode is brought to you by NASDAQ listed Bitdeer. They trade under the stock ticker BTDR. They're led by a seasoned management team. Bitdeer is a global leader in Bitcoin

mining and high performance computing for artificial intelligence. And they are backed by technological innovation and a massive 2.5 gigawatt global power portfolio. Recently, Bitdeer launched its own Bitcoin mining ASICs named the Seal Miner to target what Wall Street analysts project to be a multi-billion dollar annual market. Their proprietary Seal Miner ASICs are redefining efficiency and performance, and they are backed by the industry's most advanced chip roadmap with two more groundbreaking models set to launch in 2025. To learn more about Bitdeer's cutting edge technology and business, visit their website at bitdeer.com. That's B-I-T-D-E-E-R.com. Go check out Bitdeer today.

It's easy to understand why Polkadot is gaining more and more traction in the cryptocurrency world. Some people even are talking about it as the AWS of Web3. Now, companies such as Mythical Games, Astro Network and over 50 other independent blockchains with hundreds of applications already leverage Polkadot's technology to power their platforms. If you're looking for a reliable, scalable and cutting edge solution, Polkadot seems to be the top choice for industry players. Go check them out today at Polkadot.com. So Bill, I thought a great place to start when we think about Bitcoin. Obviously, there's been a sea change when it comes to the new administration. Regulators are switching out. It feels like what was a headwind where banks and politicians were very against Bitcoin has

now become a tailwind. Everyone's super excited. What are the big things that you're seeing change in the market, both in terms of a Bitcoin holder, but somebody who's building in this industry? So there's three things that I think have changed significantly, right? So the first is there was this regulatory headwind that was probably keeping Bitcoin down post FTX by maybe 40, 50%. You think that the regulators were actually suppressing the Bitcoin price, not intentionally? Not intentionally. But just the fear, right? The Gensler, Warrens. So what happened right after the election, right? Boom, 50%, right? There was no incremental liquidity happening at the same time. It wasn't like all of a sudden there was a massive injection of liquidity,

which tends to drive bitcoin price so i think from a regulatory perspective bitcoin was kind of like a a beach ball in the water right when you let go boom it goes up but it stops when it hits the water right so under normal circumstances bitcoin is going to do what it's going to do which means it basically acts like a suck for liquidity in in a market where basically you just print money like a you know and spend it like a drunken sailor which is what the western governments have been doing for 50 years right so that's number one right number two is the same point which is bitcoin's going to do what bitcoin's going to do anyway which we've seen for four cycles now you and i right so so in other words we can assume that the government is going to continue to print

money to pay off the debt and bitcoin basically acts like a levered bet on tech stocks which tend to get the outsized portion of that liquidity because in the case of stocks discounted cash flows but in the case of bitcoin it's a pristine asset because we know exactly what the float is going to be and you can't just keep making more of it right now on this idea one thing that uh i've been talking a lot of friends about which is doge is claiming that they're going to be able to reduce the deficit um there wasn't promises on the campaign trail about there being a balanced budget but now it feels like hey people are like could this actually happen because they balance that budget would that be negative for bitcoin like if all of a sudden the debt was not exploding

you know in in the midterm you could see bitcoin stabilize relative to liquidity injections that makes sense right if i'm saying it's a liquidity suck and there's less liquidity because we're not printing money it makes sense that bitcoin may not be skyrocketing the way it was before but first of all even if you balance the budget tomorrow which they're not going to do right how much you know incremental debt are we carrying that needs to be serviced right and you know it You're basically looking at several years at a minimum, even if Musk and Co. are wildly successful, which leads to the third point that we track, which is what now are governments and companies doing? Now, I don't think that governments and companies are what's going to make Bitcoin go to Valhalla. I think the liquidity does that.

But what it does is it sends a message to consumers who are afraid necessarily, don't necessarily understand the tech, are afraid to jump in that says, OK, there's some kind of implicit blessing on this. Right. It's not just my crazy Michael Saylor. It's 50 companies. It's a thousand companies. It's every government looking at this. It's every state. And what are we up to 30, 35 states now that are looking at holding Bitcoin and lots of governments now, sovereign wealth funds. So I still think it's retail and liquidity in each cycle. But the blessings, the anointed Bitcoin has become the anointed one in terms of having a kind of pristine apex predator of digital currencies. Those three kind of factors to me say it's another cycle, right? There's more tailwinds than headwinds now. But still, it's going to do what it's going to do anyway, just like it did when China banned it, just like it did when FTX happened, etc, etc. does that mean that you think there's going to be a big 80 drawdown on the other side or do you think those four-year cycles are dampened or gone so so there's bitcoin and crypto right so for bitcoin i think the and i think you've pointed this out the drawdowns will become less

over time right it's just a function of uh adoption of an exponentially growing asset if you if you zoom out and look at charts of you know tech stocks from dot com era right if you zoom in on 1998 1999 the sky is falling because amazon fell 90 but if you zoom out in a 25-year chart it looks like a straight line up and to the right and bitcoin is following a similar pattern which means that the drawdowns on that log chart should look like less and less over time on the way to you know valhalla and i think bitcoin is playing that out so even this cycle right the the mentality of oh bitcoin went from 106 to 95 oh my god what's happening that sounds crazy to anybody who's been in this space for more than seven eight nine ten years because we've seen the eighty percent draw

downs but i don't see i don't think you're going to see eighty percent i think you might see what was the peak last time seventy percent you'll probably see like forty five percent and then it'll probably get less and less unless we start getting into some hyper inflation mode in the west which luckily i i think we're at least we've we've kicked that can down the road for at least another four years hopefully 12 but but yeah i think i think the the volatility will decrease but then there's crypto which is a totally different animal right uh and you know with crypto i think in the short term it looks a little bit like venture wildly volatile because there's no cash flow right and then you see these d5 platforms and protocols start to generate massive cash

and then you can actually do an analysis on what they're doing and value the tokens based upon where that money's going which is really interesting and and so that those are going going to be really volatile for a while. But if you look at the, I don't know, Ethereum, Solana, Sui, Aptos, they kind of look like Bitcoin did in the early days, plus the yield and the cash flows, right? So I think there's a dynamic there that's going to play out kind of in parallel over the next 10 years or so. Yeah. What's interesting to me, I think, about Bitcoin in particular is all the drawdowns in this bull market so far have been suppressed. And it almost feels like, although it went up 50% after the election,

it does feel like even the upside has been suppressed as well. And you're just getting less volatility. It's more of this like grind up. And then there's a separation between Bitcoin and kind of all the other crypto assets. And I think that Bitcoin outperforming, you know, whether it's ETH or Solana

or whatever in certain timeframes, people are surprised by that. Usually the large cap asset should not be the one that outperforming the small caps when everything is going up. Do you think that there is like a separation now? We have like two separate markets or in my opinion,

Bitcoin has been the winner of like that global store of value. It's kind of like digital gold and everything else is, you know, kind of like a tech stock almost. And there's going to be some winners and losers in there or what? Yeah, I'm not convinced

that it's playing out any different this cycle than previous cycles. Okay, so what's happened in previous cycles, right? Bitcoin has a run, stabilizes for a while, kind of sideways up and down in like a 35, 40% band,

which to a lot of people sounds crazy, but that is sideways for Bitcoin. And then it has a huge leg up, But all the gains tend to make their way into other things because people have this kind of funny money now, whether it was investing into ICOs or investing into Ethereum, which made its way into NFTs or investing into Solana and meme coins. It tends to be the Bitcoin that drives access to other things. And I don't think that's going to play out any different this cycle. So in other words, Bitcoin is probably going to have another huge leg up. But I think altcoins will most likely, particularly the L1s, are going to outperform Bitcoin, right?

And so we've seen Bitcoin, there's this measure called Bitcoin dominance, right? I think it's around 60, 62% right now. It's peaked in the last few cycles at around 70%. I don't think it's going to get to 70% this cycle. I could be wrong. That doesn't mean it's not going to continue to go up. In my opinion, it's consolidating. If you believe in any way whatsoever on technical analysis, Bitcoin is consolidating for another leg higher.

The question is, what is everything else going to do? I think everything else, not everything else, but the L1s that look like Ethereum did five years ago are going to outperform, which is why Bitcoin dominance is going to plummet. And it's going to look like an alt season, but it's basically waiting to flush everyone out, which is what happened last time as well. That's what I'm saying. It's not significantly different than last time. It's just that Bitcoin's volatility is a little bit less. Well, what's interesting, I guess, also is altcoin season, right, that everyone is waiting for. If it does come, to your point, you need capital to come into the market.

Capital can come in through Bitcoin gains. It can come in through fresh, you know, fiat coming into the market. But also another thing is, like, there are these new protocols that seem to be getting launched all the time. And, you know, each one's a little bit different, but there's, like, magic creation of value that you can swap. And so which one do you think is a bigger feeder? Do you think Bitcoin or do you think actually just like all these crypto projects get launched? There's, you know, the quote unquote funny money floating around and people are converting that back into, you know, L1s. My intuitive answer is the answer is yes.

So in other words, I do think there's significant liquidity coming in. You've got, you know, $7 trillion in debt that has to be refinanced. You've got Treasury General Reserves being depleted. You've got, you know, I know they're talking about Doge refund checks. I don't know that that's going to happen. I think that's a bad idea. Yeah, I think it's a very bad idea. But but, you know, if they're going to give out the money, a lot of it's going to go to crypto, just like, you know, COVID stimulus checks. But I also think that, like I said, we're going to have liquidity via new Bitcoin gains. I mean, we see a huge benefit to that at Abra where we're doing loans against the Bitcoin. Right. So people are waiting to ride gains, borrow against those gains. In some cases, they're actually doing a small amount of leverage to buy more Bitcoin. Right. Which just kind of feeds the cycle as well. And then to your point, there's all these kind of next generation alts that are that are, you know, riding huge gains that tend to act as liquidity for other things whether it's memes or nfts or you know

games i i think there's this kind of growing belief that gaming is going to have its day um in the tail end of the cycle which i tend to believe but you know we'll see uh have you paid attention at all to uh what's going on in argentina with this like meme coin uh slash sovereign coin or whatever yeah it's bizarre what is uh what is your general take on those types of things because to me that is like the bitcoin community thought hey bitcoin is going to be the like pristine thing that's going to save you know first individuals then companies corporations and then eventually you'll get kind of nation states i don't think a lot of people thought that countries were going to be launching essentially you know meme coins so okay

so i have a lot of feelings about this whole kind of meme coin thing the first thing i'll say is just get the the for me the obvious part out of the way if you're a post person of notoriety large social media following uh politician of any importance please don't get involved in meme coins just don't do it just say no right i don't if i hear the word meme coin i don't want to do it to my staff if you're getting involved in meme coins stop it yes that's the first thing i would say to all of them okay now let's put that crowd aside even like the kanye's the kardashians like who i don't follow any of that world please don't do it yeah okay it's just from from it just looks like a grift now if you're in if you're like me and you don't have like a huge social following

and i decide i want to create an abra meme coin i wouldn't call it abracadabra because we have a company in davra but like you know some pepe meme coin fine right because you're not necessarily hurting anyone i actually think that the meme coin craze has in general independent of the the politician issue has been a big win for crypto because now you have solana sui to degree aptos that are massively scalable layer one blockchains that have been tested on public networks right to a degree that surpasses what visa or mastercard probably combined can do in terms of transaction processing how do you can test that on a test net but how do you do real world testing of a massive layer one blockchain meant to process 25 000 transactions a second i think meme coins is

probably the single best way we could have done that all of the trump and legion or whatever those tokens are aside which i don't support right so so again stop stop the stupid grift even i think in the case of of it's called libra right i think yeah i think in the case of libra i'm gonna give me like okay he was dumb he should have put a stop to it immediately i think the narrative of oh i just republished it i wasn't promoting it i shared it i didn't promote it yeah i mean it's just come You can actually say the words, this shouldn't have happened. I shouldn't have put my name behind this. The people that actually did this will be out of my administration and we'll figure out how to take whatever money's left and redistribute it to basically existing or something

like that. He could have done that. That's what I would have done. As I am a wildly big, you know, melee supporter in terms of what he's done for Argentina. This was a mistake. Own it up. and it's okay if you make mistakes exactly right just own it say it hey it's a mistake move on okay 100 100 so so you know i i would highly encourage you to not create a pomp token because i think you have like you know seven figures of followers we were talking uh recently and um i tried to calculate how much money i've been offered over the years to do pomp coin nfts whatever yeah um tens of millions of dollars i don't doubt it every single time it's just like it's not even a conversation yeah right and i think that people um people who are

drawn to do it what i've noticed are usually people who do not create companies they don't they don't build companies and they don't understand that like for something to have value it needs to have some fundamental value creation yeah right it needs to solve a problem for somebody it needs to have you know revenue it has like like all these components that go into building a business you look at the meme coin you're just like dude it has none of that obviously it's going to eventually lose the value once the belief system here's the difference um one of the nfts i forget what it was called but you know kevin rose he created one of them and i can't remember what it was called i think it was bird something okay i mean i'm sure i'm sure you knew

it if i remember the name when when and and he created this project not to just issue nfts he had a whole idea of a community and and a value-added model and wanted to build a long-term sustainable company now of course all the people who had made a ton of money on ethereum who were aping into his nft didn't really pay that much attention to what he was trying to do but when the price went up everybody was happy and then the price plummeted and he was satan spawn to that community of course and it hit him he did a an interview with um tim ferris where i heard about this and it hit him like a ton of bricks i mean it personally put him into a depression because he was there for the right reasons right and we did a test with a uh a token that we created which

was a rewards currency we didn't even have a a sale or would make any money on it we literally just gave it away to customers and i still to this day because we don't do that kind of retail anymore i still to this gay day get like pox on you and your children dms on my on my twitter feed feed from people who lost five dollars on some rewards token that we literally gave away right so so i think you need if you're in this for the right reasons you one you can sleep at night yep and and two there is not a hundred percent bad happening via meme coins i actually think the meme coins have added value to harden these networks we just need to separate the grift yeah i was talking to somebody recently and um richard dawkins uh talked about um kind of what

what is a meme coin he i think he coined that phrase and it was basically it's like a unit Of culture, a unit of, you know, whatever. And so this guy who is building on top of Bitcoin said that Bitcoin was like the original meme coin in the sense that, you know, it really was the first digitally sovereign token where you could own it, but it represented a lot of values and, you know, ethos

and like all these things that, you know, now is kind of like Bitcoin, maybe even Bitcoin maximalism or whatever, like kind of represents, but it was backed by real substance. It was backed by real value. It was backed by the strongest computer network in the world, right?

all these all these components to which is a kind of a unique way i guess of looking yeah 100 you could also make the case that in 71 when the dollar was no longer a gold back stable coin that it became a meme coin because it was basically backed by nothing except people's belief or or basically you could almost say it was like a mafia token because it was backed by the full power of the mafia that ran a protection racket that said we're going to continue to protect you as long as you use our our dollar uh which is more or less what the game has been for for 50 years but just depends on your perspective i guess what's interesting about that is um it would make the dollar the most successful meme coin ever 100 right um how do you think about dollar

dominance uh you know obviously bitcoin has been very successful but dollar has continued to uh be used for bilateral trade um it seems like stable coins really are helping to extend that dollar dominance yeah yeah i mean we could actually talk about that for a minute the regulatory kind of tailwinds that i'm seeing right so there's a new stable coin bill i think that that this administration because they're so crypto savvy especially i mean just the cabinet is all in on bitcoin right which is amazing uh congrats to litnick by the way and and so i think that the stablecoin legislation is going to set the tone i'm very encouraged by what i'm seeing but most importantly this administration realizes that um you know 100 fiat backed stablecoins are one of

the largest holders of u.s treasuries right now right in the aggregate right i think tether is larger than Germany or larger than many governments in terms of holding US treasuries. And they realized that the more dollar hegemony they can promote via stable coins, the lower interest rates become because it basically drives demand, which raises the price and bond prices move in the opposite direction of interest rates. So if the price of the bonds goes up because there's demand, interest rates go down. It's common sense. So they intuitively get that. I mean, David Sachs has been pushing that. I've heard him say it many times. It's very obvious. I'm a fixed income guy. So that stuff's very obvious. So I think that

they're going to do right to basically promote the kind of traditional collateralized stable coins. I have some concerns about some of the wording about putting a stop to algorithmic stuff, which I think companies should be allowed to do within a sandbox framework, which we can talk about. The other concern I have is that SWIFT allows for the conversion of a euro to a dollar, meaning if i wire money from deutsche bank germany to the us it can send euros and land in dollars right they need to make sure that if a stablecoin is issued in another country it can still be used to send money to somebody's wallet who's hosted on an exchange in the us and the way it's worded today is it confuses that issue a little bit but i have a feeling they'll they'll clean that up

but i'm hoping that it starts a kind of a windfall of positive clarity for the us market whether it's stablecoin issuers, what exchanges can and can't do via stablecoins or hosted wallets can and can't do, all the way down to securities and CFTC-oriented regulation, which I'm very hopeful now that we're going to get right. Yeah. What are the things you want to see regulators do or change? I would say there's a few things. I'll focus on the highlights. With stablecoins, like I said, it's on the right track. I would definitely get clarity to make sure that we can interoperate with internationally issued stable coins so that if I send money cross-border, it can still work, just like with Swift. We can't break what worked in the TradFi system when we moved to digital

currency. That's number one. Number two is I personally want to see a sandbox between securities and commodities regulators. Remember, we're unique in the world in that we have different regulators for both commodities uh and and securities most regulators in most countries it's one one regulator i want to see a sandbox that allows a company in the u.s to innovate issue a central a decentralized platform by raising money via token sale and then have the ability over two to three years prove that that platform has become decentralized right so that nonsense that every token out there is a security clearly goes away right so to me the litmus test has always been if something has no off switch who are you suing right so if i sue

the uniswap foundation well okay you're technically suing developers because that system really can't be shut off anymore right so so you really do you think it can't be shut off i don't know for certain yeah i think the probably the original version can't be at this point interfaces can get shut down applications is different for sure and that should be addressed so that people who provide application layer access to these things that aren't holding people's assets aren't sued that those people are deemed software developers protected by free speech in the united states which i think we with the bite administration in parallel to screwing up securities enforcement also screwed up uh you know protected free speech right with a lot of the fincen and and kind of

coordinated actions with the tornado cash developers and other things so we need to double down on free speech which they clearly are in things unrelated to crypto of course but but if we get this sandbox right right the amount of developers who've had to move to switzerland and dubai and singapore just because of out of fear of basically you know coming in and registering and then getting thank you very much here you go here's your world's notice have a nice day is is going to go away and i think a flood of money will will come into us especially now with the convergence of of ai and especially the kind of agentic web and smart contracts right so if you look at what's coming right we've got this whole agentic web coming which says there's going to be

millions of these kind of ai bots out there that are going to provide services to enterprise supply chain consumer services your personal assistant and the ideal way for those services to transact is d5 whether it's bitcoin lightning or ethereum what doesn't matter it's it's it's it's d5 regardless of some sort of software automated product where uh there's not a lot of centralized control 100 it doesn't make sense to have to get a paypal account for a bot that has no off switch because you've just added an off switch right by definition so so we need to get that right and we want those companies in the United States, in my opinion. And I'm guessing that Lutnik does and Sachs does and by proxy, Trump does, even if he doesn't understand all the nuances of the tech,

right? And so getting that sandbox right is crucial, not just for number go up, but for the future of AI transaction processing, even banking, because I'm convinced the next generation of banks is going to be DeFi based, right? What would that look like? Well, if I was developing, I tweeted this the other day, if I was building a neobank right now, especially in developing markets, I'd probably build it on Solana because the transaction fees are really low. The meme coins proved it can scale. You've got Visa partnering with them to issue debit cards. You don't need a bank partner in most non-US countries to issue a debit card. So you've got all the pieces in place to effectively launch a kind of competitive

neobank in these markets that doesn't require traditional bank core and heavyweight expenditures that can hold dollars, which is beneficial to the United States, earn yield rights by definition in ways we've discussed, do collateralized lending if you promote Bitcoin and other pristine assets, eventually we'll have tokenized real estate, which I think we can talk about coming down the pipe. And basically, it's a bank without all the heavyweight crap, without all the COBOL-based centralized cores that people have to go out and partner with in order to build their banks. And it also limits the operation chokepoint potential by basically allowing companies to control their own destiny via these next-gen L1 platforms. Do you think that whether it's

the public.coms, Robinhoods, maybe even the Stripes of the world, there's all these fintechs that have their hands in certain, whether it's brokerage accounts, there's obviously neobanks, but even payment providers, is it all just a race and they're going to converge and kind of offer us as much as possible? Yes. But I also think that ultimately, it's going to be upstarts that win. I mean, so, okay. So the question is, is banking different than any other industry that's been completely transformed by the internet? And up until now, it's been different because of the regulatory moat around the banking industry, right? And I'm putting securities and commodities investments and banking all in one big kind of moat protected

industry. Finance. Finance. Yeah, exactly. I think that moat's going away. I think you can't stop what's coming, when you have systems that are on 24-7, have no border by definition, have no off switch by definition, et cetera, et cetera, long term, the regulatory moat becomes very difficult to protect. I think the dollar hegemony gives you a certain amount of power because if you're going to issue dollar collateralized stable coins, those dollars need to be stored. So the collateral needs to be stored somewhere. And right now it's most, Even for Tether, the collateral is stored in the U.S., which is very interesting, right? You could ask yourself, why are they doing that?

Well, because they want access to the U.S. treasury market, which is why they're doing it, right? So, but long term, right, I really do think you're going to see upstarts become the biggest banks in the world, right? It's not Blockbuster that became the biggest streaming company. It's Netflix, Prime, companies that didn't exist while Blockbuster was the fastest growing company in the United States. It's crazy, right? So, is banking different? I think it has been because of the regulatory moat, but I do think over the next decade and decade and a half, that's going to change significantly because you can't stop what's

coming by definition. Yeah. Does that blur the lines of the different countries as well? 100%. Yeah. Where you're basically now, you're just like on the internet. Yeah. Probably more so even than traditional.com services because with streaming and whatnot, when you have services with a login and a credit card, it's very easy to say, okay, my streaming rights in the US are this for this product, this in this country for this product, et cetera, et cetera, down the line for a hundred countries. But when it's a DeFi service where you connect your wallet and it has no concept of what country are you in, you know, and you can't block it, right? I think a lot of those nuances of the Web2 services go out the window and the idea of

a country or a border becomes greatly diminished. Yeah. When you look at kind of the DeFi space in general. You guys have a SEC registered investment advisor. You've been building a lot of these services for customers. What are they using? Are they looking for yield? Are they using some of the other things? Where is customer flows? And I always think of it as from an academic or theoretical standpoint, there's much people who pontificate as to what people are supposed to be doing. But you have the data. What are people actually doing? We have three types of customers today. We have the high net worth customer, could be high net worth or family office that maybe is in crypto, wants to basically earn safe yield, either via some of these new kind of Bitcoin

L2 products, or maybe they're holding Ethereum or Solana, they want to stake it, earn yield there, or they want to borrow against it because they've been holding Bitcoin for, you know, five, six, seven years, they've written significant gains, they don't want to sell, but they want to maybe even get a tiny amount of leverage, or they want to, you know, buy a house or, you know, fancy car, whatever. And so we're seeing people do kind of relatively safe 25%, 35% LTV loans against those Bitcoin holdings. And that's been wildly popular for us. Then we have companies and nonprofits looking to execute the microstrategy playbook.

We get a lot of privates who are doing really well, who are quietly starting to buy Bitcoin. It's amazing how many private companies now have not disclosed that they're actually holding Bitcoin. I was in a meeting yesterday with a very, very well-known studio, private company that is holding Bitcoin and is basically going to fund future projects by borrowing against the Bitcoin at a very low LTV on a reasonable assumption that the gains may not be 75, 80% each cycle, but even 25% yearly gains, given how much they're holding, is going to allow this company to flourish for a very long time. And so we're seeing more of that. And then we're seeing newbies looking for advice because we're a fiduciary. We have to do what's best for our clients as an investment advisor saying, how do I invest in this space? How do I do tax planning in this space? How do I do estate planning in this space? I want to get into crypto. I don't know how to allocate. I don't know how to do estate planning. What happens if I die? I'm in my 60s, et cetera, et cetera. So we have those conversations as well. So those are generally the RA clients that we deal with. And when you're talking to the larger kind of more institutional crowd, whether it's the RAs or maybe some of the institutions, what are the things they're worried about? Like, why are they not, you know, maybe they're at half a percent or 1%. Why are they not at 5% or 10% or, you know, the kind of young people would be like, you should be, you know, 50 plus percent in various assets or these technologies. Well, first of all, if somebody makes their way to Abra, they're generally not trying to be convinced about whether they should be in the crypto space.

i would say 80 ish percent of people that make their way to abra are already in the crypto space and need help right either it's for lending yield better custody solution or some combination of all of them like implementing that micro strategy playbook so so our clients biggest fears are do i have my allocation right do i have my tax strategy right um am i getting screwed on this lending facility am i you know i'm i'm i'm borrowing from this kind of small shop at 15 percent and i i feel like i'm getting screwed and by the way you probably are if you you know and so so you know we help them with that and there is a small percentage and i do a lot of speaking at ria events um you know other kind of wealth management events where people are new to the

space and we'll help them free education free consulting i actually also think this is going to be the next kind of 24 36 months is going to be a big big kind of turn in in the ria space we're going to see all of these RIAs that don't offer any crypto services today start to get into crypto. And that's something that I spend a lot of time on is how to take our platform and make it RIA friendly so that even though we're an RIA, other RIAs can offer our platform. Today, all they can do is offer ETFs by and large to their clients, which is easy. But for somebody who wants to earn yield, who wants to borrow, who wants multi-asset exposure, the ETF is not a viable solution, obviously. And so I think that's going to be a big deal in this cycle.

Let's talk about the psychology of crypto. I saw somebody tweet recently, and he was very bearish. He was like, basically, crypto screwed up tech. And his thought process was a bunch of people came in, they were playing this PVP zero-sum game in crypto. It was all about just get rich quickly um when crypto crashed in 2022 and into 2023 a number of people left crypto went into ai and now they're like running the grift in ai and it's just like get rich get rich get rich um there's definitely some of that like mentality that i see do you think that's the majority of the industry or like how do you think about the psychological component of you have something that is early with a ticker that trades up and down is very volatile. And then you go

online and you're seeing people who are like getting rich every day, right? Like just talk through maybe some of that. So it's a great question. I mean, first of all, I separate Bitcoin and crypto, right? So we kind of understand the psychology of Bitcoin reasonably well at this point. And a lot of people get it. Some don't. The percentage that don't is decreasing, which is great. And there's going to be a few people who will never get it until they die. And then we all die and things get flushed and technology moves on. Crypto is a different animal for a couple of reasons, right? First, it does, to a degree, act like venture, right? Because you're constantly funding new products. And some of those products are funded by venture. And on the promise that

they're going to generate significant revenue, in some cases for equity holders, in some cases for token holders. And I think you're seeing more and more interest in crypto projects generating revenue for token holders, right? I mean, if you look at Athena last year, right, it went from zero to hundreds of millions of dollars in revenue for the protocol in weeks. It's crazy, right? I mean, real revenue, right? Not just the value of the token. And so, you know, I'm just not in this for the number go up, right? I am actually trying to build a crypto-based bank that takes advantage of this technology to build the future of money and investing, financial management and investing. And that's what we're committed to at Abra. So we analyze how are these protocols

working? What value do they provide? What's missing in the financial and investing and banking stack as it relates to crypto and smart contracts? And so that is hard. So if you're trying to understand where all this is going there are a ton of moving parts to understand then there's the people who are like to your point just here for number go up and and that's okay right but my my warning slash strong suggestion suggestion to those people is forget 99 of what's out there because your chances of picking super early stage winners unless you're just making throwaway bets, unless you do this 24-7 for a living is like zero, right? I mean, we get it wrong a lot and this is my job, right? My job is to think about where it's going and why and to

align a large team around that vision. And we get it wrong sometimes and we do nothing else, right? So, the average investor from a psychology perspective should probably come in this when something is slightly established, getting traction, if they care about number go up and make those bets. That's why I tell most investors stick to the next gen L1s if you really want to make a next gen bet, because the metrics are kind of proven via what happened with Bitcoin and Ethereum in the past, vis-a-vis liquidity cycles, wallet adoption, et cetera, et cetera. Those are things that you can understand, right? If you're really far out there on some real world asset platform that hasn't launched yet, and you think you know something that the public doesn't,

and you're an armchair quarterback investor, you're going to lose your money. Yeah, I guess part of people coming in is like, you know, they buy some Bitcoin, they're trying to figure out what it is. Is it a psychology thing where they're like, hey, Bitcoin, the people who bought Bitcoin early, they made a lot of money.

I'm not going to be able to make as much money because the return is coming down. So I have to push out on the risk curve. And it's almost like they're seeking the highest percentage return and that's pushing a lot of capital into these kind of components. Yeah, I mean, look, it's tough because I think people's expectations are unrealistic when they think about these crypto cycles, right? Meaning if I just follow the four year cycle, am I going to make 5x my money every five years? I can pretty much assure you you're not. Okay. And so if you get rid of that mentality, first of all, and say, okay, I'm a long term investor for life. And if I focus on early stage technology, and I'm really good at it, and I go super deep, yes, on that allocation,

of my money, I can, in theory, make 30% a year. But there's very few people that consistently, consistently achieve a 30% per year IRR return, whatever you want to call it, in early stage tech, right? It's in the maybe tens of thousands, I don't know, on the whole planet, out of eight, and billions of people. Okay. So, you know, I actually think that the wealthiest people out there became wealthy via significant concentration in order to get wealthy. But they made those bets with extreme conviction, meaning they didn't just follow Bill and Pomp and say, I'm going to do what they do. First of all, we don't tell everybody everything we do. So they wouldn't even know, right? And most people who have super concentrated bets aren't out there screaming from the rooftop

what their concentration is for whatever reason. But the reality is people who make super concentrated bets have extreme conviction around those bets in my experience okay i'm sure that people get lucky right and so how do you get that conviction how right you know just by reading on twitter no you do a lot of homework you dig in you understand the tech you understand the adoption curves whether it's enterprise or consumer if it's tech whatever okay then people tend to diversify because they care more about asset protection than they do about or wealth preservation than growing the wealth, right? And that's when people's expectations around returns are greatly diminished. So your only chances, in my opinion, of growing huge wealth today are either owning a

business, and it's the owner mentality of I'm all in, I'm going to do whatever it takes to own that business, or I'm making super concentrated bets as an early stage investor. So the psychology of everything else is burning cash unless you have realistic expectations around what your return profile is going to be over, you know, years and decades. Yeah. Um, what it's on the horizon for Abra, like we see the tailwind now coming from politicians. You guys have been able to get the regulatory, um, I'll call it a proof. I don't know if that's the right language, but like, you know, you're a registered investment advisor, et cetera. Um, what is the future look like? Yeah. So we're, we're involved in a lot of licensing processes. We're now, uh, a registered,

uh, I forget what the term is in Europe. Uh, we're, we're live with our, our, our licensing there. You're going to see more announcements this year in the US on other international licensing, moving more and more in the direction of basically what I would call crypto banking services, full stack of services for custody, yield, lending, trading on a global basis, and then building more and more on top of that over time. Moving down the income pyramid, starting at the top, institutional clients, high net worth clients, family offices, eventually moving back down into retail. But right now focusing at the top of the pyramid,

it's just easier to navigate the licensing world to do that. But you'll see us moving more and more in the direction of kind of licensed appropriately crypto banking service provider. Yeah, it makes sense. What are you most excited about for this year? Oh, you know, being able to run my business without a bunch of wackos behind me

that look like Fred Flintstone and Barney Rubble chasing me with a big bat with spikes on it, trying to smash me in the head all day long. It's a pretty good feeling. And I shouldn't have to feel that way. But the fact that I do now, it's pretty awesome. I just want to run my business like every other American. I mean, how many times do you have a discussion with the average American who's trying to build a business where you say, well, there's a bunch of regulators chasing me around all day like lunatics trying to beat me over the head with a bat. That actually has me the most excited because i know that this business is going to exist and it's going to be successful that's the kind of

conviction i was talking about i have that conviction but what i didn't have conviction for until recently was was that i was going to be able to do that in the united states unencumbered by lunatics trying to kill me and now you're here now i'm here still yeah still still um where can we send people to find you on the internet and also find out more about ever sure i'm pretty active on on x these days bill barr x is my is my handle bill barr x and then abra.com uh is the best place to get a bunch of free information on how our products work services register both as an individual or institutional client abra.abra.com baby amazing thank you so much we'll do it again in the future see you bud