The Pomp Podcast - #1580 Yoni Assia | Why Bitcoin Still Has 10x Upside

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Starting point is 00:00:38 Find your rhythm across a seamless 33-inch display and an immersive 19-speaker AKG surround audio system. This city demands agility, and Optic delivers with precision to make every drive extraordinary. Let's take the Cadillac. Find out more at cadillaccanada.ca. Luxury sales claim based on S&P Global Mobility Canadian New Vehicle Total Registrations for calendar year 2025 for the Cadillac definition of luxury. 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

Starting point is 00:01:16 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. 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. What's going on, guys. Today, we've got a great episode with Yoni Assia. He's the founder and CEO of eToro.

Starting point is 00:01:59 They're a $6 billion publicly traded company. They got three and a half million users and they are coming to the United States fast and furious. In this conversation, Yoni explains why he was buying Bitcoin when it was real cheap back in 2011 and how he thinks about the rise all the way to $120,000 in price, why he thinks it's still early. Then we get into things like tokenization, what's going on on all of these retail trading platforms, how he thinks about being a public company CEO today and what to expect from the emergence of all the traditional finance world and the new crypto ecosystem that is forming. This conversation is fascinating. There's lots of new information in here. So enjoy my latest conversation with Yoni. All right, Yoni, I thought

Starting point is 00:02:35 a great place to start this conversation. You were buying Bitcoin. I think it was like a penny, maybe two cents or something. You predicted that it was going to go to $120,000. You nailed the predict. No, I'm kidding. But you did buy Bitcoin very early on. And I think that you had very high conviction that it was going to be very successful. How do you evaluate Bitcoin's rise over the last, you know, 10 to 15 years that you've been in Bitcoin? So first of all, this was buying for eToro. So we were actually probably first or one of the first companies in the world to have Bitcoin treasury. We started buying at $5 all the way to 15, I think with about $50,000, we bought 3000 Bitcoin. This was in 2011, 12. And then, you know, first crypto rally until we started

Starting point is 00:03:18 trading for clients. So clients started trading Bitcoin on eToro in 2013. For four years, everybody, my board, management, they were like, Yoni, you were going all in this Bitcoin. Nothing really happened. We were like wasting so much resources in it. And then 2017 came. By the end of 2017, 95% of our clients were trading Bitcoin and XRP and ETH. We listed ETH when it was about four dollars so i've always been a big fan and still am of bitcoin and of blockchain tokenization digital assets uh and i have no doubt that we are still very very early stages it's going to continue why do you think that why do you think that like let's talk about bitcoin that we talk about the kind of rest of the market uh but with bitcoin specifically why do you think it's still

Starting point is 00:04:05 so early given you know it's a two plus trillion dollar asset 120 000 price point the the way i look at it is bitcoin is is the reserve currency of the digital economy uh and gold is sort of the reserve commodity so the reserve commodity versus currencies nine and now it's more than nine trillion probably like 13 40 it's like 20 20 oh oh my yeah because it went up uh i need to update my slides so 20 trillion dollars right so i i i think there's a very good chance digital commodity commodity surpasses physical commodity, right? Which means we have a 10x horizon to Bitcoin as the reserve commodity of the digital economy. Now, how long does it take? Is it a five-year process, a 10-year process? I think that's still out there. But I think gold and gold market cap

Starting point is 00:04:57 is a very good sort of signal to where Bitcoin should be and eventually should probably surpass that. Yeah. I don't disagree with that. Now, what about the rest of the industry, right? Because I think that there's a lot of people who look at it. One of the stories that you've told me before, but I don't think people really know is colored coins early on. I think you were like pretty involved paying attention to that. We now have all these alt coins and it seems like some of them are working, some of them aren't, but it's kind of like experimentation or how do you look at it? Sure. So we founded Colored Coins in 2012. There's actually a project that started in Itoro and then we came to the board with the concept of colored coins and my board was like stop dealing

Starting point is 00:05:34 with these things uh or in crypto uh so we completely open sourced it uh and actually uh vitalik when he was i think under 18 pinged me at bitcoin talk and he's like this is super interesting tokenization this was basically colored coin was uh tokenizing on top of the Bitcoin network. This was also the first sort of Bitcoin maximalist because when it's all, by the way, public, like on Google groups. So you can see Vitalik arguing with other people saying, hey, maybe we should start a new blockchain. And everybody's like, what? That's blasphemy. Bitcoin is the only blockchain that should be. They're still saying that today on the internet. Same Bitcoin maximalists. That was the beginning. And I think back then we were like all talking

Starting point is 00:06:21 about eventually like our vision and passion was about tokenizing real world assets right so tokenizing gold and silver and currencies by the way another interesting story is tether was actually built originally on on bitcoin right and it was almost built on colored coins and then and tether if i remember correctly they created it originally to be able to are between exchanges and they didn't have to use like the bank wire system and stuff so they created a lot of the early exchanges didn't have banks at all right so so the entire concept of stable coins basically started as a path for digital crypto native companies to be able to transfer basically dollars between them and for the users to transfer dollars in between exchanges

Starting point is 00:07:07 without the need at all for banking rails uh so early days bitfinex which is related to tether Binance and others didn't really have banks. You couldn't move money through banks. So everything had to move through stable coins. I think now, you know, the crypto is in a whole different path. But going back now to sort of tokenization, we were talking about colored coins and tokenizing real world assets in 2013. And eventually, obviously, Vitalik went and built Ethereum, which really started tokenization. It always surprises when you actually find out it's more about meme tokens eventually, and new type of tokens or apes, rather than real world assets. But I think now, you're pushing that towards 2025. And I think everybody understands that

Starting point is 00:07:55 digital assets are better from a technology point of view, than analog assets, right? It just makes sense. So everybody assumes, and we were saying this for years, this is at least $100 trillion dollars worth of assets are moving to become digital assets, which are existing stocks, bonds, eventually real estate and other assets, right? So when you look at the industry as a whole, there's two huge transformations of wealth. One is Gen Y, right? So basically younger generations amassing roughly $120 trillion of assets over the next 25 years. And the other part is on the back end. So one part is on the front end, where platforms like eToro have younger generations amassing wealth. And the other part is from a technology point of view, all of those

Starting point is 00:08:44 assets are moving on chain over time. And when you think about this whole move of tokenization, right, I think of Bitcoin is, it's a tokenization of store of value, which is kind of not a real world thing, but we created a better version of it. So it's digitally native store of value. Stable coins are really the proof point I would point to that probably have the second best product market fit in this entire industry. It is tokenizing dollars or some sort of fiat currency. What do you think the next thing is? We've seen stocks.

Starting point is 00:09:16 I know that eToro now is starting to look at the stock thing. I've seen people try to do real estate. I've seen people try to do all kinds of different types of assets. But what is the next area that's going to get this product market fit? So I think real world assets are coming. We've announced we're now launching 100 tokenized assets of the top traded stocks only over the 24-5. And if you think of the usability originally, again, of stablecoins, it was the transfer of assets, right? It's the transfer of assets 24-7. So that unlocks a lot of opportunities for stocks, eventually for money market funds. You have people like Fidelity, companies like Fidelity and BlackRock issuing money market funds on the blockchain.

Starting point is 00:10:01 You see Goldman Sachs going into that direction as well. So I think treasuries, which is money market funds and other types of treasuries and stocks are coming on chain right now. And that would unlock a lot of possibilities around DeFi. So if you think of sort of the core, the most interesting part of digital assets, you know, that's way beyond analog assets, it's real time transfer of assets 24 seven across the globe anywhere. Right. I think that was very efficient. And when you tokenize, let's say stocks, right. How much of it is access? So people who don't have access to the stock market or whatever will get access or it could be access in terms of there's private companies and that will be tokenized and I can go buy it.

Starting point is 00:10:46 So there's like an access component, but there's also this, like I can move it between exchanges. I can, you know, do something with it in off hours. Like, you know, there's almost like a, okay, now that I own it and can access the actual equity itself, then there's a bunch of stuff that I, it unlocks for me to be able to do. Do you think it's both of those things? Or do you think one or the other is the reason why people adopt? I think eventually it's all of them. But I love the quote of Elon Musk that the most entertaining outcome is eventually the

Starting point is 00:11:12 most possible one. I think we don't know what's going to be the first real sort of mass scale usage. I love the concept of gifting stocks. So I always say, like, I started trading when my father gifted me some stocks when I was 13. I think gifting stocks to people is a great opportunity for people to understand the value of stocks versus just crypto. And I think the crypto community today, I think there's about 400 million wallets out there or 400 million people already trading crypto. So it's actually bigger than any single stock market across the globe. And we've always looked at crypto in eToro as sort of, in some cases, gateway to understand

Starting point is 00:11:55 how capital markets work and how stock markets work. I always say, even if Bitcoin is a million dollars and you still want to buy Coca-Cola and McDonald's or your Netflix subscription, they're going to pay for it. So these companies are still great companies, whether it's in dollars or in Bitcoins. Yeah. And then when you think about your business, you guys were in Europe, you guys crushed it there. You came to the US and then there was some regulatory headwinds. I think that every company, both domestic or an international company came to the US dealt with. At one point, you guys delisted a bunch of assets and then you guys kind of came roaring back. Walk me through what happened in terms of the regulation and how it's changed how you guys think about building the company. Sure. So today, Toro has customers from 75 countries, were regulated across the globe, started in Europe, expanded to UK, UAE, which is amazing, Singapore, which was just launched, Australia. And then about four years ago, we started in the US. Now we offer in the US crypto assets, stocks and options trading. And under the last administration, and that is not a surprise to anyone, there was a lot of pressure against the crypto community.

Starting point is 00:13:07 And as we've seen our business across the globe actually succeeding both in stocks and crypto, we decided to take a step back during basically a very highly scrutinized industry on crypto. We eventually delisted the majority of crypto assets, except Bitcoin, Ethereum, which was sort of approved as commodities here in the U.S. Very proud, by the way, and would love to talk about going public two months ago. So definitely one of the biggest milestones in my life now being eToro being a public company here in the U.S. And for us, that was a trigger. We really wanted to go public, be a public company, be able to look at newer, bigger opportunities and then start expanding in the U.S., continue to expand in the U.S. as well.

Starting point is 00:14:00 So we since going public, we added more than 60 different crypto assets. We expect to launch more than 100 crypto assets by the end of August. So significantly scaling up our crypto offering here in the U.S., adding staking as well, which we had in the past. We have it outside the U.S. We'll bring it back into the U.S. I think there's definitely much better and higher regulatory clarity with the new SEC administration, the new administration in general in Washington. and it's amazing to see how crypto has become such a strong narrative of the administration with Trump talking about it

Starting point is 00:14:39 and Howard Lutnick talking about it and seeing a lot of the crypto colleagues in the White House. I was there at the DC crypto inauguration party for Trump just before the inauguration, which was, by the way, mind-blowing because we were there. The entire crypto community was there in the room

Starting point is 00:14:58 and suddenly you see everybody picking up their phones and they're like, what trump coin what's trump coin uh i think everyone was wondering if it was real not real whatever right at least two three hours of the biggest ogs in the crypto community um and they're all like is this real is this is not real is that was his account hacked uh i'm absolutely mind-blowing and um you've told me a story in the past about uh the debanking this like choke point 2.0 stuff um i think you told me that you had 100 million dollars in a bank account and the banks came to you and said you got to take the money out of the

Starting point is 00:15:40 bank account yeah so this was early days of crypto i think there was about 2017 uh this was again not me the 100 million dollars um and you know we've grown in 2017 from opening 200 accounts a day to opening 20,000 accounts a day, 20,000 accounts a day. And that was like KYC verified financial institutions account. And we saw the same happening with our bank accounts or our bank accounts grew some of them from like $20 million to a hundred millions or $200 million. We were growing rapidly back then, 2017. And some of the banks, and these are the, what have, you know, one of the largest banks in the world were like listen this crypto thing we we can't uh you know we can't tell you why but we don't like it and you need to we need to shut down the bank and

Starting point is 00:16:34 now it's amazing to see uh in 2025 i would say we have amazing relationships with banks uh from you know most of the biggest banks in the world which was we're also on our cover from uh you know jp's banking us, Goldman, we work with Citi, with UBS. So we're working with the largest banks in the world. And I think the narrative changed a lot. So most of the big banks now in the world have a digital asset team. They cover with a research crypto assets, not only Bitcoin, they cover ETH and Solana and others as well. So I think that changed significantly, but it was definitely early days of crypto debanking was a big part in a scary part of crypto which again led to the huge success of stable coins did they come back and ask you to be a customer of the bank later of course

Starting point is 00:17:26 did you uh not yet i figured all right let's talk about uh the product itself one of the big things that um i think etoro has done a great job of in europe is uh with the cfds uh these uh contracts for differences. And it's been a really big part of the business. I think there's a lot of American users who would like to use that product, but in America, we're not allowed to use that product. Do you think that that'll change anytime soon or kind of under this administration? I think it's different products, different names. Just an example, one of our big announcements is launching perpetual 24-5 trading futures alongside 24-5 trading of stocks, therefore tokenized stocks as well. So I think generally tokenization of assets introduces a lot of new opportunities

Starting point is 00:18:18 into the markets to bring in new types of innovation, whether by the way, it's just the tokenization of assets and traditional financing or potentially DeFi financing, right? So we are already seeing crypto assets trading on exchange on the CME. We see the CME launching basically indices that are trading 24 civil perpetual futures, replicating a bit what's happening in the crypto world into traditional assets. And I think over time, we'll see a lot of the innovation in the world of financing and the ability to leverage, which again, we see in DeFi as well, coming to the basically traditional assets that have been tokenized. So I think it's a part of that process where tokenization of assets create a much better ledger and less

Starting point is 00:19:10 counterparty risk. And when you have a better ledger and less counterparty risk, you can introduce a lot of different features that we see today in DeFi, whether it's leverage or things like flash loan or things like lending against collateralized assets. And I think all of those technologies of DeFi are going to get basically borrowed into all types of tokenized assets and so is the thought process that um tokenization in a weird way to me is it's kind of akin to like an etf wrapper like an etf for a lot of different uh you know kind of strategies it turns something that was complex into a single click so if you think of you know the s&p 500 you could have went and bought the 500 companies now you just one click bam now i got exposure to the

Starting point is 00:19:53 500 uh there's covered call strategies there's you know all these different kind of types of etfs but the wrapper simplified and now you just one click and you have exposure it feels like what you're talking about is very similar like some of these concepts in defy are very confusing or very difficult to do um but if you can almost tokenize them and you know maybe you don't have to go really far on like the um kind of defile if you look at something like athena right uh kind of doing this cash and carry trade like anyone can go do it but the ability to just simply one click and now you have exposure feels like that is where the world is going, especially with like the rise of retail investors. What's going on, guys? One of the most important trends in all

Starting point is 00:20:33 of finance is the rise of the retail investor, what I call a self-directed investor. These are people, they don't have a financial advisor or a stockbroker. They simply go and learn on the internet and then they direct their own capital directly into the market. These people are taking Wall Street by storm. And so I'm going to bring all of us together on September 12th in New York City for the Independent Investor Summit. It's a one-day event that I'm hosting where I'm going to have a bunch of my friends come together and talk on stage, explain what their thoughts on the market are, what their best investment ideas are, and how they think you should change up your portfolio to better position yourself for the future. I've got Jeff Park, Jordy Visser, Darius

Starting point is 00:21:08 Dale, Chris Camelo, the Nigerian brothers, and many, many more that are all coming. These people are incredibly smart. They've made lots of institutions, lots of money throughout their careers. And they now are going to bring this information and share it directly with you, an independent, self-directed investor. So September 12th, the Independent Investor Summit in New York City. Please go into the description, click on the link there, get your ticket, and I'll see you in Manhattan on September 12th. I think the rise of retail investors, it's not only the rise of retail investors, the rise of global retail investors, right? So Bitcoin is the assets that's most widely

Starting point is 00:21:46 distributed across the globe more than any in my my guess is more than currency more than even the dollar or getting there and will be there right but definitely more than any stock but eventually when you think of ETFs it does simplify significantly access to some markets whether it's an index like S&P 500 or whether it's buying gold right tokenization is basically the same but it's wider. It's not only about tokenizing something that you can't trade like S&P 500, you can, but it's complex or gold, it's physical, but it's also about removing the global barriers, right? So it's very easy for somebody in the US to buy US stocks. Sometimes it's very hard to buy stocks in Taiwan or in Japan unless somebody wrapped them as an ADR, right? So

Starting point is 00:22:39 that's another type of wrapper. It's very hard to access hedge funds or private companies stock, right? Once you tokenize them, it unlocks the ability for more institutions and people to basically access those products. And then for more people and companies to create innovative products around those newly issued tokens. And then when you came to the US, this hyper-competitive market, right? You know, it's like in a weird way, all the killers in business want to win in the US. There's already a bunch of domestic players.

Starting point is 00:23:16 You guys were, I would say, one of the big winners internationally that now is coming. What are some of the things that have gone well? And what are some of the areas that maybe, you know, have been harder in terms of entering the United States given exchanges in particular?

Starting point is 00:23:30 Everyone knows they got to figure out how to get users, right? Like the user growth. And you guys did a great job over the last decade or so. But coming to the U.S., I think it's like a whole different beast. And so like what are kind of your takeaways from from doing that? So, first of all, I'm always surprised people assume the U.S. is significantly more competitive than, let's say, the U.K. or Germany or America. We're just egotistical, arrogant.

Starting point is 00:23:54 I think at the end of the day, every market. I also sit on the board for the past 12 years of like the Israeli Schwab, where I saw growth, by the way, their stock went up 700% over the last like two and a half years. So I know the traditional industry and the traditional industry is very similar across the globe. So you have like five very large investment houses, right? You have like the real big ones here are Fidelity and Schwab and BlackRock to some extent, but that's something a bit different and Vanguard to some extent. But those are like the $10 trillion, very large. And in every country, you have those very large investment houses, which are the 800 pound gorillas of the older generations, right?

Starting point is 00:24:38 You have five very large banks and usually five very large insurance companies. Each of those represent roughly 80%. Whether you go to Australia, to the UK, to Germany, anywhere you go, Spain, Italy, all of the countries looks roughly the same. very large five financial institutions across asset management, across brokerage and investing, banks, and insurance. And I think all of that is changing again to what we spoke about before. One is our generation expects very different user experience to the markets. When we say a great product, we mean a great user experience in an application. When my father says a great

Starting point is 00:25:21 financial products, he means a line in his Excel somewhere with an IZ number, right? So product becomes the user experience. And basically the deal brokers, the neobanks, the entire new industry we are building is focused on that user experience, the digital user experience of the consumer. And we're much, much better than the traditional banks and asset managers. And then on the other hand, you have the technology that's empowering digital assets that eventually has the transition of $100 to $200 trillion over the next 25 years, where again, eToro has always been on that cutting edge of understanding those assets and enabling access to those assets who are of interest of those Gen Y and younger generations. So what you really see is a transition from

Starting point is 00:26:19 older generations and older companies and eventually trillions of dollars trickling down to newer companies focused on innovation and user experience. And you see that across the globe. And we've been very successful in Italy and France and Germany and Spain, but I don't speak those languages. English, at least I can speak roughly. I was going to say very well. When the United States, you turn it on, you guys come here, you go public, US market. I'm assuming capital of capitalism is the US market. What's it been like being in public companies so far? It's been great. But really, the experience of going public in the US, I've always said,

Starting point is 00:27:08 there's a couple of moments in my life that I'll forever remember that aha moment. One of them was connecting to the Internet. I'm like, wow, I'm connected to everyone everywhere. The second for me was like my first trade when I like did a trade and I looked at the order book and then I went to Yahoo Finance. And I'm like, wow, my trade was booked in the actual books of the stock exchange. And the third, which for me was mind blowing, was Bitcoin. Now I've been through that experience of going public in the roadshow. And I have to say that's like the fourth big moment.

Starting point is 00:27:47 And for me, it's amazing because I've been passionate about capital markets since I was 13. I knew I wanted to deal with capital markets and technology since I was 13, since my first trade and have been in capital markets full time for the past 18 years in eToro. And since I was 13 for 31 years now, always around capital markets and only when I did the roadshow for eToro. And I saw, you know, suddenly a book. When you raise money, you have the book of trying to raise 500.

Starting point is 00:28:17 And eventually you're seeing like every day, $500 million of interest, a billion dollars of interest, $2 billion of interest, $5 billion of interest. And you understand the depth of U.S. capital markets. It's crazy. It's crazy. I met investors who jointly manage more than $30 trillion. That's mind blowing, right? So you meet these amazing companies like BlackRock and Fidelity and the sovereign wealth funds that's not necessarily U.S. capital, but they're all in U.S. capital markets. And you see a very different capital market and a very different ecosystem.

Starting point is 00:28:59 And you understand that the size of that capital market is something that, you know, just makes it very, very different than any other capital market or experience I've had in capital markets in my entire life. So it felt like, you know, finally, we are a part of capital markets. It was super exciting to stand on the desk in NASDAQ and say, now, finally, customers of eToro can trade eToro on eToro. And what is the dynamic of that, right? Because you guys have a very interesting business where your customers are obviously putting money on the platform. They're buying stocks, whatever, but now they can buy your stock as well. And so have you seen overlaps or any lessons learned in terms of the types of people who are buying the stock versus the user base? um we have so we look at etoro stock on the etoro platform just like any other stock um i would say

Starting point is 00:29:54 that uh what we're seeing which is interesting or have learned through the process is just like on etoro you have a lot of different type of investors you have like the the very active traders uh you have the very sort of long methodological uh value investors on etoro So actually what I've seen in capital markets is the same way that we analyze and look at the different types of investors in eToro. You have exactly the same thing in capital markets here in the U.S. You have the hedge funds and the hedge funds are just like the active crypto traders looking for an opportunity, looking for ARB, looking for something to flip. You have the very long term investors. Those are like the value investors on eToro.

Starting point is 00:30:40 They're looking to do their analysis, understand the competitive landscape, understand the moat of the product, and have the army of internal analysts in places like BlackRock and Fidelity and others that really understand well the company and want to invest long-term. And then you have followers where they're just trying to understand how successful is this going to be based on other people's research. We see that on eToro as well. People are just coming in, looking at what other people are doing and just copying them. right copy trade copy trading pretty good right uh it's been amazing to see that as well like we've

Starting point is 00:31:15 constantly upgraded the copy trading and explain what it is for those that don't know so on each other the unique part of itoro is uh we're a social network where people can actually see the performance of others on the platform itself you can actually go to see my portfolio it's a 32 on average for the last 12 years on etoro so i've been bragging uh during the ipo when i met investors, I'm like, Hey, look at my portfolio. I've been doing quite well, almost as good as your hedge fund or better. But so you can actually see the track record of people. And then out of the three and a half million funded brokerage accounts, 3,500 are basically on the path of becoming pro investors. We help them basically get certified as professional investors and get

Starting point is 00:31:58 paid for other people copying them. So if you come to the platform, you can either trade on your own stocks from 22 different exchanges, about 200 now crypto assets alongside on-exchange and on-exchange derivatives that trade 24-5. Or you can see other people's performance. A lot of them, by the way, mind-blowing. They're very, very good. I meet them in person, by the way, once a year in our summit. And you see people with track records of 25% on average for the past five years. And you click, you want to copy them and it copies their entire portfolio into the sum you selected. So you copy somebody with $10,000, you just copy his entire portfolio into your portfolio and it trades every time they trade at the same time, the same performance in your account.

Starting point is 00:32:47 Now you keep mentioning 24-5 and most people say 24-7 when talking about things. You've mentioned around tokenization, you've mentioned around some of the trading, some of these assets. 24-5 refers to this idea of rather than Monday through Friday, there being kind of hours of operation is to just trade all day long. Why is it not 24-7? cryptocurrencies. With world-class customer service, military-grade encryption, and a vertically integrated licensed trust company, it's no wonder more than 200,000 Americans trust Bitcoin IRA to secure their financial future. Getting started is quick and easy. It takes just three minutes to open an account. Once you're set up, their team of IRA specialists will reach out

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Starting point is 00:37:00 So, the funny story, 2017, we're trading crypto on eToro, but we started from capital markets, right? from stocks and derivatives which all trade some of them trade 24 7 or less and we're having these arguments and i'm telling my team listen we have to open up over the weekend trading and they're like you know we'll need to recruit people to actually work 24 7 now if we want to open the markets and i'm like listen it doesn't make sense that we close trading friday night where bitcoin continues to trade elsewhere in other exchanges like we have to let people buy and sell during the weekend so for us like coming from traditional markets into crypto markets uh i remember that

Starting point is 00:37:45 change and people were super skeptical they were like it's gonna cost us a lot who's gonna trade over the weekend and i think over the like the first three months we opened it we actually saw the revenues of like a three-year return on what it costs um but but the markets you need to remember started from a nine-hour day market right so people are used to the fact that it opens and closes at a certain time some markets have expanded that like future markets right so future markets the cme expanded trading significantly uh around assets like commodities currencies trade roughly 24 5 by the way very hard to trade currencies even 24 7. a lot of the problems uh in the history of crypto was the fact that you can't transfer euros and dollars over the

Starting point is 00:38:30 the weekend so you get you get you get stuck money onto the exchange on friday anticipating in case i want to do anything on over the weekend i at least have the money on the exchange because if not then uh you gotta wait till monday morning exactly uh and for businesses complicated right so that's also a part of sort of the emergence of stablecoin so now real world assets eventually trade on traditional exchanges traditional banks they all shut down during weekends and that's why Uh, now the shift is first to 24 five, but I think the shift will go into 24 seven earlier than expected. So if you think of 24 five trading on stocks, it actually happened because they saw crypto.

Starting point is 00:39:14 I believe that's because of crypto. People are looking at like the fact that crypto is trading 24 seven and they're like, Hey, that's more revenues eventually for exchanges and for brokers and for everyone. So you saw that shift for 24-5 in the stock markets, by the way, not mostly top stocks here in the U.S. markets now with perpetual futures on the CME or another futures exchanges here in the U.S. But in many other countries, they still just trade nine hours a day. Technology like tokenization enables the transfer of assets 24-7. So if the assets are transferable 24-7, in theory, you could also find liquidity 24-7, but liquidity is hard. So tokenizing something, let's say you want to tokenize, and I know we all believe that eventually real estate gets tokenized as well. So tokenizing a real estate building is one thing, but making sure that there's liquidity for people to actually buy and sell some of that real estate as a token 24-7, that's much harder, right?

Starting point is 00:40:20 So suddenly you have a spread, right? So the cost of trading could be like 20% per trade if there's no sufficient liquidity. So it's about scaling up liquidity, having more participants who are there 24-7, using technology like automated market makers. I think that's coming for real-world assets as well, which means technology can always, like an AI agent, can be 24-7 running risk management and therefore creating liquidity for those tokenized assets. And when you have all of that, everything eventually becomes 24-7. And do you think that the legacy world can make the transition? I think they don't have a... It's inevitable. They have to try or they'll get behind, right? You wouldn't trade... Again, these things take a very long period of time, especially by the way in

Starting point is 00:41:14 finance, because if you think of where the vast majority of assets in the world, it's either inside existing financial institutions, which are very conservative or in the hands of people who are over 60 year old, right? So that's like 90, more than 95% of wealth in the world is in that bucket, right? So, so change happens slowly in traditional finance and, and change happens extremely fast in crypto finance, right? So we've seen NFTs that suddenly become super expensive or super valuable or meme coins that go from zero to hero in a day or two, right? So extremely fast versus extremely slow. And then we're going to see in the next five, 10 years, basically the convergence of that. So one of the critiques of the whole tokenization

Starting point is 00:42:10 of equities has been um i don't actually own the stock i own like a like almost like an adr you know like i own like a claim on the stock um how do you think about the current state of tokenization where the companies themselves aren't tokenizing their stock the future probably is that right where the issuer themselves says hey we're going to create it we're going to own it we're going to give you all the same rights but this kind of transition period like are there risks or is that kind of like people are technically right on the structure but it's not a it's kind of like a non-issue compared to what they think it is? I think, again, it's a transition. But again, Bitcoin ETFs were actually the same thing, but opposite, right? So when you own a Bitcoin ETF,

Starting point is 00:42:52 you don't own the Bitcoin, right? So Bitcoin max, you know, people from the crypto, I don't know a lot of people from the crypto community who are actually buying Bitcoin ETFs versus buying Bitcoin. So most of the people within the crypto community who are crypto native, they're like, why would I pay management fees and not hold my actual Bitcoin, hold them in a bank where I know the bank can maybe not open, can maybe tell me to move my assets somewhere else. So this is the same thing just happening in the opposite direction. I do think eventually, and there are groups of uh all of most of the exchanges uh we know and are familiar with like traditional exchanges like the nasdaq the cme um you know the london stock exchange euro next deutsche bourse the abu dhabi

Starting point is 00:43:44 stock exchange they are all looking at that opportunity of tokenization of the ability to transfer directly those shares uh that are listed on the exchange uh and of course of the business opportunity of 24 seven and end of global financing right so all of the exchanges are looking into this opportunity how fast does this become sort of top down versus bottom up i think uh like you know like everything in crypto people can have their projections uh but sometimes uh again the most entertaining outcome happens what are the big bets for you guys over the next couple years tokenization sounds like a really big one what else I think access to global markets continue to be a very big part of what we believe in.

Starting point is 00:44:29 We always see opportunities in surprising places. So funny enough, this year started with a meme stock version of Europeans, which was buying defense companies stock. So we were waking up and suddenly you saw like stocks that I've never heard their name, a thousand percent higher volume. And we're like, OK, this is a meme stock moment for Europeans. what are they actually trading? Very profitable defense company stocks, right? So we always see that opportunity where we see people are trading a specific asset class or stocks in a specific market. And most people outside that specific sort of niche or story happening are not familiar with it. So that connects to the social part of Vitoro. And as a social network, what's amazing to be

Starting point is 00:45:18 active as a social network in 75 countries is you see how that information suddenly flows and suddenly you see our Australian customers buying European shares because Europeans are having their meme stock rally. And we see that all the time. We see ideas that are flowing from customers across the globe. And there's no doubt that the biggest game changer in trading and investing is ai um i've been in the space you know i've been managing my portfolio well over the past 12 years on etoro would you say your performance was what like roughly 32 on average a year but including crypto as well so crypto is like 50 now a bit less maybe 40 percent of my portfolio but i i look the i start when i started trading i when i was 16 i started building like

Starting point is 00:46:09 algorithms to trade the markets sort of the that connection between the love for capital markets and love for technology but it's always been hard to actually establish something that trades automatically for me although i know the math right the math is out there of how to optimize a portfolio but i don't have the time because i'm managing etoro to actually manage my portfolio 24 seven. I also need to sleep and take care of my five kids. But now with AI, we can start building and we'll be launching soon a couple of very, very cool products around it. Of every trade you make, you can have an AI agent connected to that trade asking you, why did you do that trade? How do you manage that trade over time? You can basically be as good in your portfolio as Jim Simmons from

Starting point is 00:46:58 Renaissance and Stevie Cohen from 0.72 and Warren Buffett, right? Because you can build those agents to manage your portfolio. And there's no doubt that machines can make better investment decisions. And now that path of how do retail investors suddenly have access to something that a year and a half ago, if you'd ask me and Itoro, do I think that our investors would be able to use the same level of technology, access to the market, speed of execution and usage of AI to analyze everything happening in the world 24-7, I would say, no way, Jose. Today, it's like, that's the, you know, we're getting there and we'll be announcing a lot of tools that basically enable each of our customers to be as good as potentially the best hedge funds in the world.

Starting point is 00:47:49 It does feel like in a weird way, everyone for the last decade has been trying to get the users. Now what you almost want is you want the users to sign up and then just get their AI agents or their like automated systems to start trading. And maybe there's like different risk levels, different strategies that they want to employ. But why would you not at least want to have the automated agent help you, let alone replace you? I think it's about helping versus replacing at this stage. um because i do think it's a lot about preference right so i could give you probably a pill that would give you all of the nutrition for the entire day and i'm like hey you don't need to eat steak or uh or you know or or drink coca-cola because that pill is enough and you'll be healthy

Starting point is 00:48:39 so stop eating everything you love right i think a lot of one of the greatest thing around investing is connecting people's emotions and logic to what they invest in, right? So when you look at Bitcoin, you see a lot of passion, right? You look at Michael Saylor talking about Bitcoin. There's a lot of for you. There's a lot of passion around it, a lot of belief, right? You don't want to replace that with a machine. You want investors like Tesla investors that love Tesla and talk about Tesla.

Starting point is 00:49:11 You want that to be a part of it because you can't expect machines necessarily to have a long-term vision projection, right? Machines can't necessarily estimate or predict what you think on Bitcoin on 2035 or where Tesla is going to sell their taxi robots in 2035 or how much of enterprise is going to be in the hands of Microsoft versus Nvidia and Meta, right? So long-term projections

Starting point is 00:49:41 and therefore the capability of investing in companies for long-term because you ask what warren buffett uh always says like ask yourself is this company uh going to be there in 30 years and i'm going to see my grandchildren asking me to buy products of that company if that's the case that's a great company uh because because basically it means it's there for 30 years and i have five kids so hopefully 25 grandchildren if they all wanted netflix and a disney subscription uh that's that's exponential growth for those companies what about private markets it feels like people now are trying to figure out how to tokenize private markets or give people access in the us there's the whole accreditation issue

Starting point is 00:50:24 like do you guys ever attempted to go and do anything there we uh we're definitely looking at it um the biggest challenge again and that's also what's unlocking right now is regulatory landscape i think the reason now tokenized real world assets are uh basically coming back right because we initially launched some of them in 2019, is you have in Europe a new regulatory environment, MECA, that came into effect at the beginning of the year, which enables a lot of existing financial issuers, including banks and insurance companies and asset managers,

Starting point is 00:50:59 to actually explore these new rules that enable to launch different types of tokenized assets. So regulation is a big part of that, because when you tokenize real-world assets, you have to have that connection between the real world and the ownership and the tokenization of assets right otherwise uh it's very hard it's all based on trust it's like not enforceable it's not enforceable so it's based on trust and and you want it to be based on more than just trust so regulatory landscape in europe coming soon in the uk now with a genius act is for stable coins but

Starting point is 00:51:33 i think a lot of people expect that to expand here in the us with new rules coming from the SEC and CFTC. So I think that puts the framework where it needs to be to enable regulated financial institutions to actually issue new types of tokens. And then each country has their own rules, their own regulations. So while in theory, crypto was easy and Bitcoin was easy and it was not, if you were there from very early on, it was very hard for crypto companies to open bank accounts or to set up relationships with financial institutions or to understand where they want to set up. I think it's the same now with tokenized assets. It's a bit complicated because somebody in the US and somebody in Europe and the UK and Singapore each have different rules and regulations,

Starting point is 00:52:25 but a lot of that is being written now on chain, which is interesting. How much money do you think you guys spend on all the regulatory compliance stuff? How many people do you have? Well, we're 1500 people globally. A lot of the efforts in eToro are, I'd split them into roughly three, but one is technology. So about 600 people are in our engineering and solutions group. And it's a lot of the focus right now is how can we build faster with AI and what is it to mean to be an investment platform for our customers and the user experience with AI for our customers, right? So a lot of the engineering now, 42% of code in eToro is actually written by AI. Oh, really?

Starting point is 00:53:18 42%. And like my ask for the team is I want to see that in 80% by the end of the year, we've actually enabled... How are you doing that? Is that like devon from cognition or a lot of it with cursor and claude uh but we started now experimenting with grok as well so it's interesting like the models they improve they're improving so fast grok for heavy it's it's mind-blowing how fast things are improving we just opened uh there's a company called base 44 which enables uh people to actually write their idea for an app uh so we just like gave a lot of people in Toro access to it and are thinking of how do we open this for customers potentially to build their own apps, right? So AI is a big theme within engineering.

Starting point is 00:54:06 Then you have sort of the global operations, which include the governance, the risk setting up of the regulatory framework of eToro, which spans across the globe. So 12 different regions with regulated entities, which cater to both, by the way, we have the Toro Money products, which is a banking card, basically, or Visa debit card, which has been launched in Europe and the UK. We're in payments, we're enabling people to pay in crypto and in fiat money to their payments, and that alongside trading, investing, and wealth management, like the equivalence of 401ks and IRAs here in the US, we're doing in Australia, in the UK, and in France. So about a third, I would say, goes to basically global operations, compliance, risk, etc.

Starting point is 00:54:57 And then the other third would go mostly to customer facing, whether it's marketing activities, which also do awesome stuff with AI, or whether it's our customer service across the globe, servicing three and a half million brokerage accounts speaking uh uh 14 different languages so you get out of my room you see like 200 people and you hear like the all the different languages like french spanish uh arabic all of the languages so it's very cool um before i let you go what are the latest public numbers on etoro in terms of size revenue things like that i'll give you uh 2020 the end of 2024 we published q1 already uh and q2's expected earnings in the 12th of august uh but tell me those ones yeah of course uh but uh uh again last year uh we had 930 million dollar

Starting point is 00:55:51 top line three and a half million brokerage accounts with about 17 billion dollars of assets uh and it's amazing to see by the way how the assets of our customers grow from year to year and the average size of accounts are growing year over year and one of the i think biggest achievements we've had since 2021 to 2024 was significant profitability so we had over 300 million dollars of uh a beta profit for 2024 uh and that was a a great path to become a public company with almost a billion dollar top line 300 million dollar uh bottom line uh and continued user growth across the globe it's great numbers thank you and and what you said three and a half million uh users funded accounts funded accounts yeah that's that's real right all right um where

Starting point is 00:56:39 can we send people to find you on the internet uh mostly on x yeah i see you on there yeah yeah yeah i'm tweeting posting i think posting posting posting it's all right i'm waiting for you to start posting ai photos of yourself i i i think you have one of me riding a bull when we did the All right. So what is your ex-account? Yoni Asya. Y-O-N-I-A-S-S-A-Y-A. All right.

Starting point is 00:57:03 Easy. Thank you for doing this. We'll do it again in the future. Thank you very much.

The Pomp Podcast - #1580 Yoni Assia | Why Bitcoin Still Has 10x Upside

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