The Pomp Podcast - The Bitcoin Truth Wall Street Doesn't Want You to Hear | Nancy Beaton

Starting point is 00:00:00 people will come to expect the benefits that blockchain gives them it gives them full ownership of their assets it gives them better access to their assets it gives them 24 7 access to their assets i mean nobody's interested in waiting around all weekend i can send things borderlessly what's going on guys today we got a great conversation with nancy beaten she is the president of retail uphold and we're gonna get down and dirty i play devil's advocate i tell Here's all the things that critics are saying about the crypto industry and she fires back. What does she agree with? What does she disagree with?

Starting point is 00:00:32 And where does she think that the critics actually have something to say? This conversation is going to open your eyes to how somebody on the ground in the trenches is seeing the crypto industry develop, what tools, what products, what assets are actually becoming popular and what do the people want? They constantly talk to their users and it's pretty interesting to hear the insights that she has. Here's my conversation with Nancy Beaton. All right, Nancy.

Starting point is 00:00:55 what I want to do today is I want to play devil's advocate. I want to basically tell you everything I hear the critics saying about the crypto industry, and then you kind of respond. Like, what do you agree with them? Where do you think they're right? And then where do you think there's getting it dead wrong? And maybe the first thing is this idea of crypto being outside of the legacy financial system. I was really excited about Bitcoin being outside of the system. I think a lot of the other assets, that's a big promise. Now though, I see like BlackRock and Fidelity and a bunch of large Wall Street firms, they're in the game and they're kind of pulling these assets and this industry into the legacy financial system. So is crypto still outside the system?

Starting point is 00:01:29 And like, does it matter if it is or not? You know, I think crypto has become and digital assets have become a part of people's portfolios. So I think customer demand is what is prompting people to bring digital assets into the fold and give people access to digital assets. And I think those of us who've been in this space for a while and those who have amassed a portfolio of digital assets are now saying, I want to be able to do more with those. So I think you're going to see more and more convergence between digital assets and crypto as we traditionally know it, and it being a part of your total financial portfolio. So basically what you're saying is they're having to bend the knee because the crypto people, they've got money, they want to do things,

Starting point is 00:02:17 and you kind of have to choose, are you going to serve this whole group of people or are you going to ignore them? I think there's a couple of things. I think on the retail side, I think there's customer demand, right? Consumers want their money to move like emails. They want it to be borderless.

Starting point is 00:02:32 They want it to be frictionless. They want it to be cheaper. They don't want to wait over the weekend to get a deposit into their account, right? They're used to that in crypto. And now they're putting those expectations on traditional means of equities or other financial instruments as well.

Starting point is 00:02:48 I think they're also amassing digital assets and they're looking to do more with those assets, right? They want to borrow against them. They want to be able to lend them out. They want to be able to earn on the asset portfolio that they've been building over these years. I think on the enterprise side, I think there's a need to meet this customer demand.

Starting point is 00:03:07 So I think you do see more banks, more fintechs, more people in the financial space looking to kind of plug and play offerings into their already established applications, services, portfolios that they give their end customers. And I think you'll see digital assets become more and more of a part of that. So I think the two things combining

Starting point is 00:03:27 are gonna see digital assets become a traditional or a regular part of anybody's financial portfolio. Now, if you go and you take this kind of a step further, it's not just the assets, it's also the companies, right? If you look at, take BlackRock as an example, their largest, most profitable product is the Bitcoin ETF. I've joked, they're a crypto company now. They're a Bitcoin company, right? They wouldn't position themselves that way. But if you just look at the numbers, that is their most successful product. Vice versa, if you go and you

Starting point is 00:03:55 look at traditional brokerages or even maybe some of the neobanks, they very much are relying on Bitcoin, cryptocurrency, tokenized securities. All of these components are now making them kind of this digital forward. You all, I think, have done a very good job of inserting yourselves on the crypto side. And it almost feels like you're trying to eat back in the other direction and say, hey, how do we start to add tokenized securities or other things? So how do you think about like the DNA of the company being crypto first versus maybe a traditional firm that's coming at it from we did equities and now we want to be in crypto? Yeah. So we talk to our customers a lot. We do surveys with them, research with them, you know, focus groups with them. We get

Starting point is 00:04:33 a lot of feedback from our users. And one thing that they're telling us is they want to be able to do more now with their digital assets. So while people may have known Uphold for our retail wallet that you could buy, sell, hold crypto and other precious metals and assets, they now want to see us bring more services to them. So what you've seen us is launch borrowing to a credit card. So you don't have to sell your assets. You can borrow against them and spend it on a Visa signature card. You can lend out your USDC and earn yield. This week, we are launching borrow, so you can get what feels like more of a traditional loan where you put your assets up as collateral, your XRP, your BTC, your ETH, your USDC, and you can borrow a lump sum in cash

Starting point is 00:05:23 into your Uphold account. We also just launched equity. So the thing is you can go one step, Bitcoin to Apple in one step. So you can leverage your digital assets to expand your portfolio and start for as little as $5. So we do hear from our users, they want to have more financial services, they want to be able to do more with their current portfolio of digital assets, and they want access to things that maybe they traditionally haven't had access to before. Now, what I always find interesting is, I think almost a decade ago, I wrote this whole piece about, hey, everything's going to be tokenized. And my general framework was we used to have the analog age, we went to electronic Q-SIPS, then electronic Q-SIPS are all going to become these

Starting point is 00:06:04 digital assets. And regardless of what the actual asset is, you're not really going to care that it's digital. All you care about is do I own Apple stock? Do I own oil or whatever? One of the promises of that future at the time was now you can go from my fractional share of real estate to Apple stock, and I don't have to go from real estate to dollars into Apple. Right. I'm kind of torn now. Does that actually matter? Do people care that you can swap between assets without having to go into the common currency of the dollar? Or do you guys see demand for that and see a value proposition there?

Starting point is 00:06:38 We do. I think people want the ability to manage their money, their assets, their trades frictionless, right? They want to be able to say, you know, the goal is I want to exchange my Bitcoin for Apple. I don't want to have to think about multiple apps, multiple steps, multiple trades in that process. I want to hit, take my Bitcoin and give me Apple. To make it frictionless like that, I think will increase the adoption. It meets what the customers want. And that's what we launched with the equity. So there's 4,000 different stocks and ETFs you can buy. You can go straight from Doge to Tesla, Apple to Bitcoin, back and forth in one step. So I do think making it easier for users to trade, to make these goals that they have with different assets frictionless

Starting point is 00:07:30 is really important for the adoption. And I think the users want to see it all in one place and they want to do it super easy. Now, when you're talking to these users, one of the things I also think about is custodial versus non-custodial. And it feels like the promise of, oh, it's non-custodial. Oh, you can hold your own private keys, whatever. Then I get on the internet and I see a story almost every day of somebody had some issue. Their heart is like jumping into their throat every time they go to set a transaction. I mean, there's all kinds of crazy, crazy problems that happen. Where are you guys in terms of what their users actually want? And then how much of that aligns with maybe the like cypherpunk vision of everyone's going to hold their own assets. You

Starting point is 00:08:10 don't need any sort of third party. Yeah, you know, we hear it all. So, you know, people love the convenience of holding their assets on a centralized trading platform. They're always available. They're accessible. They can see them in their wallet. They don't have to remember seed phrases. All of those things, right, make it super convenient for people. And a lot of people choose that convenience over the idea that you hold your own keys and therefore hold total ownership of your assets. So what we've done is, of course, we have people that leave their assets on Uphold as the centralized trading venue, but we also have a product called Vault. So it is adjacent to Uphold. It acts like it is a self-custodial wallet, right? It has three keys.

Starting point is 00:09:03 The user owns two and we have one to sign transactions. So the user's always in charge. They can move their assets over to Vault. They can sweep them out of Vault into any wallet at any time that they want because they always hold the two keys. But what they can also do is move that directly to Uphold to make a trade, to take advantage of the market, and then move it right back into Vault. So they get the convenience that they're looking for of being adjacent to a centralized trading

Starting point is 00:09:33 venue. They get the convenience of not having to necessarily remember all of those seed phrases because it has key replacement. Should you lose one of your keys, we can replace that key. And it gives you access to hold your assets but trade immediately when you want. So we have tried to provide our users both solutions and they can decide what's best for them. Today's episode is brought to you by ArchPublic.

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Starting point is 00:11:31 don't really care? I think regulatory clarity is important. Those institutions, enterprises, banks, fintechs, anybody that is a highly regulated entity wants regulatory clarity, and it will ideally accelerate the adoption and the ability to participate for highly regulated entities getting into the space. So I think regulatory clarity is always good, right? Everybody wants to understand what are the rules that we're playing by. I would say, though, however, you know, nobody's been sitting idle. There's been a lot of, you know, I'll say financial policies, regulations passed by

Starting point is 00:12:13 other entities that have been helping give more clarity to retail trading venues like us, to enterprises, to platforms, et cetera, this year. So there's been more guidance than we've ever had before. And I think it has continued to help accelerate the space. But I do think the idea of having regulatory clarity through the Clarity Act would allow or unblock some of the hesitation on the regulated fintech broker dealer, you know, bank enterprise side and accelerate that even faster than we're seeing today. What are you worried about? Like when you look at whether it's regulatory or kind of market, you know, developments, what's the thing that keeps you up at night? I think I got you. You're speechless. You know, I've been in the

Starting point is 00:13:08 space since 2018 full-time, right? Personally, a little bit before that. For me, I would say we are still fully committed to the space. So, you know, I think it's not timing the market, it's time in the market. And I think, you know, I hope that people understand that and continue to be participants in the market. And by that, I mean, you know, understanding the market, being in the market, exploring the market, doing all those types of things. There's a lot of news, a lot of headlines, a lot of sensationalism around it. And I think, you know, for me, I worry that that will overshadow all of the benefits, right? I mean, all of us in this space know that the traditional financial platforms are going to move to the blockchain. 24-7, operational efficiency,

Starting point is 00:14:05 borderless cheaper right there's so many benefits of moving money through the blockchain than there are through the traditional financial system so i think you know for those of us in the space we know that's where it's headed it's just will it take a little bit more time with all of the sensationalism that's swirling around it maybe but i think um you know if we can get things like the Clarity Act pass, I think that will help to accelerate that adoption and sort through what's real. And then when you think about the kind of killer use cases for a lot of these retail investors, obviously, perps has been a huge thing that people are very excited about. What else do you see maybe as the next five years that people should be paying attention to? Or maybe if people

Starting point is 00:14:53 are looking to invest, what are the areas or the themes that you think are going to be the biggest wants? Yeah. I mean, everybody has to choose their own portfolio advice, their own strategic financial setup and strategy. Everybody needs to do that. I would say what I see our customers asking for are the ability to do more with the portfolio that they've amassed. So things like borrow, things like earn yield, you know, things like crypto IRAs, right? Invest more into the digital assets they believe in. So one, I think people want to do more. I think those will be the killer use cases, putting those assets to work. And I think two, people continue to want their digital assets to work harder, to do more for them. So things like being able to stack your

Starting point is 00:15:47 XRP every time you use a debit card. Things like we have, you can deposit cash onto the Uphold account and earn 3.75%, which is much higher than the national local bank average. And through our partner, it's FDIC insured up to 2.5 million. They also want to deposit part of their paycheck and they can auto invest into their assets as they want and earn 3% back. So I think they want more products that let them do more with their digital assets and they want to be able to earn more on those digital assets. Those are the two things that we constantly hear from our customers. And then when you think about like from a team perspective

Starting point is 00:16:31 and the things that you guys are actively working on, how much of the focus internally is on like, let's go compete with the traditional folks in the traditional industries and maybe we're just going to tokenize them or digitize them versus trying to build more crypto native type things. And I just think about what has product market fit in crypto? I would say Bitcoin has product market fit. I would say stable coins have product market fit. I would say tokenized securities has the promise, but still we're in the early innings. I think perps have product market fit. It's kind of split. Half of it is traditional assets that

Starting point is 00:17:00 are just being digitized and stable coins, tokenized securities, et cetera. But the other half are actually crypto native things like Bitcoin, perps, et cetera. Yeah, I think you'll see us do both. So we launched traditional equities, right? Fractional equities that you can start with as little as $5. That's more access and the ability to use your digital assets to access other types of financial products. You will see us come out and we have launched with the exactly protocol lending your USDC so you can earn on it. We have borrowing against your assets in the protocol. We have borrowing against your assets in the protocol to a credit card. Those are very traditional crypto-based products. We'll also

Starting point is 00:17:43 come out with other things like prediction markets. Our customers tell us that they're interested in doing more with their money and things like prediction markets or crypto-based IRAs. A lot of our users want to move over from either traditional IRAs or just enjoy the tax advantages of a crypto-based IRA. So you'll see that as well, that kind of bridges between a traditional financial product and the crypto space. And then, yeah, by the end of the year, you'll see us have done more with tokenized securities. So whether that's access to private companies, whether more and more people can actually put equities on the blockchain, those types of things will be coming as well. So it's really a mix. There's a mix of being

Starting point is 00:18:29 able to leverage my crypto, maybe in traditional financial products. And then also, customers want to do more crypto-based, blockchain-based financial products. And then when you start thinking about these different types of assets, how much of your investors are heavily concentrated, high risk-taking, which I think is the generalization around crypto investors or people who use these products, versus it actually looks like a much more well-rounded portfolio. It just happens to be that their equity portfolio is going to be digitized. Their commodities are going to be digitized. And so like they have a lot of quote unquote crypto, but they're getting exposure to a

Starting point is 00:19:08 diversified multi-industry type portfolio. Yeah. So I can tell you a little bit about our customers. I think people assume that because you over-index in crypto, you're high risk. That's not technically the case. You can over-index in crypto, but not be high risk. And we find that with a lot of our user base, they have a large portion of their financial portfolio in crypto.

Starting point is 00:19:35 They are not high risk financial people. So they believe in what crypto is going to bring, what blockchain is going to bring, how it's going to transition the financial space in general. So we have a lot of those users that over index in crypto, but not necessarily high risk users. I think also what we are seeing is we are seeing this next generation of users that look at digital assets like they look at cash. So, you know, I have kids, they don't have checks, they don't have email, right? They wonder why I go to a bank. They're, you know, they say, can't you just send that from your phone? So they want their money to move like email,

Starting point is 00:20:23 like their snaps, you know, they expect it and they expect to have access to all these things, right? They, you know, they want to be able to get into the space and buy and put it right alongside all their other products and services. And so I think they're looking to build their wealth. And I think they see digital assets as just a normal part of that, not something that's necessarily new or risky or different, but it's just another part of the financial portfolio. Today's episode is brought to you by Simple Mining. Bitcoin mining has a reputation for being complicated, risky, and hard to evaluate as a real investment. If you're considering mining in 2026, what actually matters isn't headline profitability.

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Starting point is 00:21:57 If it sounds interesting to you, you can get it for free at simplemining.io. That's simplemining.io. Go check it out today and see if you should get into the mining game. What are your big, bold predictions for the next 10 years? What do you think the big things that are going to end up happening? Well, I don't know how bold. I would say I do feel like, you know, no matter the market we are in right now, big believer personally in blockchain, in the financial freedom that digital assets and blockchain bring, I think that it will transform the financial space. And I think the kind of conversations we're having now of is a product, you know, blockchain,

Starting point is 00:22:45 is it DeFi, is it traditional? I think none of that will matter. I think it will all move to the blockchain. And I think that people will come to expect the benefits that blockchain gives them, right? It gives them full ownership of their assets. It gives them better access to their assets. It gives them 24-7 access to their assets. I mean, nobody's interested in waiting around all weekend.

Starting point is 00:23:11 I can send things borderlessly. You know, it's really tough to send money across the border now if you're doing it the traditional way. So I think the benefits that blockchain brings, on top of all just the financial efficiency, cost efficiencies, I think that's what people will come to expect. And I think it will transform the financial system as we know it today. when you think about uphold 10 years from now what's the business look like you know i think for you know mostly uphold has been known for our successful retail wallet

Starting point is 00:23:49 the ability for us to buy sell hold one step to metals one step to equities lending borrowing all those types of things. What people probably don't know as well is that the platform that underpins that successful retail wallet is a battle-tested, proven platform that we have fully API'd for enterprise customers to plug and play into their services. And so I think if you look at Uphold going forward, you will see us continue to invest and bring out new services on the retail side. But I think you are going to see us expand greatly in our ability to plug those types of services directly into a bank, a broker dealer, a payment company, a fintechs offering, and they can have a ready-made platform in a matter of weeks for their end customers.

Starting point is 00:24:47 And so I think, you know, being heavily known for the successful retail world, I think people will more and more know us as we power the platform for a lot of these other institutions. That makes sense. Is there anything that people are talking about in the industry that you think is overblown? Like we're talking a lot about things that maybe people don't know about or aren't thinking about. But like what about the things that are overhyped or areas where maybe you think there's not as much value? Um, I don't know if overhyped, I would say, you know, it does take time to put assets on the blockchain. So, you know, as you and I were talking a little bit earlier before this, right? Tokenized securities will be coming, right? We've already announced we have a platform

Starting point is 00:25:39 partner that we're going to go to market with, and that you should start to see some of that by the end of this year. I think tokenized securities is something that people have been talking about and people want. And I think you're now on the cusp of seeing it, but it will take some time. I think getting more of these traditional financial products onto the blockchain might just take a little bit more time than maybe people expect. It's not an overnight thing. There are traditional financial products that are made for Monday through Friday trading, right? That's not how crypto and digital assets and blockchain are built.

Starting point is 00:26:19 So I think to bridge some of those might take just a little bit longer than people expect. That makes sense. Where can we send people to find you online or find out more about Uphold? Yeah, so they can go to Uphold.com. We're on Twitter. I'm on Twitter. So, you know, we get lots of feedback, lots of comments. And, you know, I would say keep them coming because we love talking to our customers and

Starting point is 00:26:41 users. We constantly do research to see what people are wanting next. And, you know, that really helps us. We plan our product launch and roadmap. You know, it's interesting. I talked to a lot of different companies and I think you all hold the record for every time that we've had a conversation with anyone on your team, whether it's you or anybody else, there's a record number of times they say, well, we talked to the user's end or,

Starting point is 00:27:05 you know, our users told us and, and so we always, we always joke that Uphold just is a one big company that is meant to talk to as many users as possible and then just go answer their questions. We do, you know, every conference I'm at, I'm talking to users. I'm in the airport. I see people, they stop me. We talk, I'm on the same flight to certain conferences with the same people every year. We laugh when we see each other. So yeah, I mean, I think you'll find us, right in the heart with our users because we're users too. We love hearing the feedback, we love getting the feedback,

Starting point is 00:27:39 and I say bring it on. I love it. Well, thank you so much for taking the time to do this. We'll do it again in the future. That sounds great. Thanks.

The Pomp Podcast - The Bitcoin Truth Wall Street Doesn't Want You to Hear | Nancy Beaton

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