The Wolf Of All Streets - Bill Barhydt Has A Clear Vision On Crypto And Owns A Sh*t Ton Of Bitcoin

Episode Date: May 29, 2022

A lesson for Bitcoin entrepreneurs: There’s a big difference between Bitcoin evangelists and the people who are using your product. Bill Barhydt (@billbarhydt), the CEO of Abra, learned this lesson firsthand. He has big dreams for Bitcoin’s future and joined us at Bitcoin Miami to discuss institutional growth, the denomination of accounts, and the biggest Web3 misnomer. JOIN THE FREE WOLF DEN NEWSLETTER 📩 https://www.getrevue.co/profile/TheWolfDen THANK YOU TO OUR SPONSORS ►► I couldn't be more excited to announce that Vuori is a sponsor for the show. I've been wearing their clothing for years and can't get enough of it. Countless episodes have been recorded in Vuori, and I tell everyone they need their incredibly versatile and comfortable clothing. You can do practically anything in it. For our listeners, they are offering 20% off your first purchase. Get yourself some of the most comfortable and versatile clothing on the planet at vuori.com/melker. Not only will you receive 20% off your first purchase, but enjoy free shipping on any U.S. orders over $75 and free returns. Get your outfit today at: https://thewolfofallstreets.info/vuori EPISODE LINKS Bill Barhydt: https://twitter.com/billbarhydt Production & Marketing Team: https://penname.co/ FOLLOW SCOTT MELKER • Twitter: https://twitter.com/scottmelker • Facebook: https://www.facebook.com/wolfofallstreets • Web: https://www.thewolfofallstreets.io • Spotify: https://spoti.fi/30N5FDe • Apple Podcasts: https://apple.co/3FASB2c

The point here is that if you're the pied piper and you know the sheep are following you or the sheep herder and the sheep are following you towards the cliff and those sheep aren't the people who are using your product but have a different incentive from you, you have a problem. This podcast is sponsored by Vori. Please stay tuned for more information on this amazing company later in the episode. Retail adoption of Bitcoin and crypto has been one of the overlying narratives for the past few years. In 2021, we saw a major boom where crypto exchanges couldn't even accept customers that were coming in because they didn't have enough customer service to onboard them. Now, we saw a big cool down in that. So I'm interested to see what's been happening in 2022 and also what's being built on these retail and institutional platforms.

I have one of my favorite guests today, Bill Barhyde, the CEO of Abra, to discuss all of these things and more. So Bill, we've talked so many times at this point, but the last time we actually did a podcast, we were still talking about this massive retail run last year when seemingly every exchange couldn't handle the onboarding process and the customer service issues were running rampant. I assume that we sort of saw cooling off of that through the middle and end of 2021. Where are we at now with the retail cycle, would you say, as far as what you're seeing from new entrants to the market? Yeah, it's a good question. I think in Q4, November, December, maybe even a little bit, yeah, January for sure. There was definitely a cooling off within kind of the retail trading, retail buying, let's call it sector. Now, interestingly enough, we've seen, first of all, retail has picked up significantly the last few weeks, right?

So we're early April. I mean, we've seen a significant pickup in retail volume. We've also seen a significant pickup in institutional volume for us. And it's still not where the euphoria is not where it was clearly in like May of last year, June of last year. Yeah. But it's definitely it definitely troughed in like December, January, maybe early February. And I think in March, it started to pick up again. I mean, last year was weird because we obviously had sort of the market crash in April, May anyways, and then you couple that with the world reopening. And I think

people just didn't want to set their computers and stare at charts and invest. But it's interesting that you're seeing sort of this growth on the institutional side, because that seems to be the overwhelming narrative, but I haven't seen much data to back it up, so beyond anecdotally. So what does that mean when you talk about your institutions? Is this crypto hedge funds specifically, or are we starting to see the legacy? Sure. So we have several businesses that interface with the institutional world. We have our lending business, which is growing really fast. We manage well over a billion, close to two billion now in lending positions for mostly institutions.

And we're dealing in both directions, borrow and lend. We are facilitating treasury for a lot of crypto companies now. They come to us and they want to earn yield on their holdings. They know, in particular, they understand how it works because they're in crypto. So we're doing that for several companies in the space, but now getting a lot of traction outside of our space. And that's probably been our fastest growing business this year. And that is literally paying yield on either stable coins or crypto holdings for companies who are already in the space, already invested, want to be invested, family offices that want to be invested.

Generally, in the first quarter of each year, you get these allocator events where family offices, institutions come together and figure out, you know, how they're gonna look at- What are we doing this year? Right, what are we doing this year? Basically, that's right. And crypto went from not part of the discussion to like a key part of the discussion, boom, like overnight.

And for Abra, it's just been awesome. I mean, you know, that's exactly what we've been waiting for and now it's happening and it's just that's been great so um so that combined with kind of retail coming back has been really interesting the last few weeks you know we've been the crazy guys trying to tell everyone to buy bitcoin obviously for for me for just over half a decade for you a lot longer obviously um and i had a whole segment of my old friends and college friends and stuff. I could just never get there. And when I showed them that they could buy USDC and earn 10% on it, that ended up actually being their gateway. Then eventually they bought Bitcoin. So I always

thought that Bitcoin was the gateway drug and it led you to all these things. But it was sort of the stablecoin yield that kids of the 80s understood you could have a savings account and earn money on. That's interesting that you're seeing that in your business. We are, totally. And the way I use it for myself, which is, you know, the management team, we were 10 people sat around a table and said, OK, what's the product we want for ourselves? And we designed it. And we didn't really think about, about okay let's build a savings account i want an away station for my cash because i'm i'm crypto centric in my accounting right i'm thinking bitcoin ethereum first everything else second people you're talking

about are thinking cash first everything else second and they account in in dollars i account in in the number of bitcoin i hold and the amount of theory i might hold because it should i wanted to my conviction is it'll go up for a very long time and I'd rather account than that. But I come in and out in a certain amount of cash because I'm looking to make new investments. Every once in a while, particularly in Ethereum, I might take a little profit. Bitcoin, I generally don't. And then I'm looking for entry points. And I use Abra's earned product as my personal treasury for that because I'm earning more money to invest on the pullbacks at the same time. It's the holding pen. That's the same thing for me. Every time I

sell something, I know that I'm going to owe 40% taxes on it at the end of the year. So I've just been parking that in earning yield. And now, unfortunately, here we are in April and I have to get over this mental hurdle. You actually bring up two other points which have become germane to our business and others and peers I've talked to in the space. And this issue of taxes has actually created two new phenomenon for us that I think are quite significant. The first is tax loss harvesting. I spend so much time explaining to people why crypto is different from equities and why it's treated differently. And basically, it's not part of the wash trading rules yet. And I think it probably will be eventually, but in the meantime, it's not. And so we now get a lot of users who basically

offset equity positions with crypto because they look at the crypto effectively as free money because of the fact that regardless if it's going to go up or not, it's always going to have these 20, 30% pullbacks, which is basically an instant tax offset for their entire equity position. Right. Viewing an investment class as an opportunity to lock in a loss is definitely a new thing. 100%. 100%. And so, and I'd be, I was actually quite surprised in December of last year at how many of our high net worth investors already knew this. Like, like we didn't tell them. We do now, but they figured it out on their own. I'd call them up and, you know, I'd see them moving money around. I'm like, is everything okay? Because these are like our,

you know, I don't call every customer. These are the biggest customers. Everything. Yeah. Oh yeah. I'm just tax loss harvesting. I'm like, are you kidding me? And so that's one. The second thing is we've launched a new division of Abra. It's a subsidiary called Abra Capital Management. And we've launched a series of funds because a lot of our high net worth investors are saying, hey, look, you're forcing me to basically either sell or un-mint my stable coins to pay taxes.

If it's Bitcoin, I've got to sell. I literally did it today. Right. So but what if you had a fund structure to earn the yield, right? So that you got a K1 instead of a 1099, right? So in English, for those of us who aren't in the fund world, we now have the ability to allow you to earn the yield through a fund, which means that it's capital gains as opposed to ordinary income. So if you don't redeem, there's no taxes in theory.

I'm not a tax advisor. So you just hold it endlessly. You just hold it endlessly. And what you're basically doing is you're compounding against future earnings that aren't being taxed yet. So you're basically pushing your taxes off forever as long as you're willing to huddle. Right. And so so that's going to change our business significantly. Brilliant. Yeah. And we have that now for Bitcoin, for Ethereum and for the dollar funds. So interesting there is that all you've done is reskin the billionaire

playbook for the average person who's never had access to that. People have no idea how many hoops you can jump through as a wealthy person to basically just punt, avoid altogether, or just delay things. But that is a very, very simple one that there's never been access for your average person. That's right. The game has been rigged forever. I'm not trying to re-rig the game. I'm just basically playing by the rules that somebody else created. But why didn't anybody do that before? I don't think the demand was there.

Right, but people do have the perception that it's rigged for rich people, but it actually can be done. 100%. Nobody just bothered to do it because who cares about the people that you're servicing? And so, yeah, I mean mean it's such an easy thing to do you know the onboarding is a few more forms that you have to go through because it's a fund and if you've never dealt with a k1 and trust me turbo tax and all your other tax programs if you do it yourself they can deal with the k1 just like they can at 1099 probably exactly and it's super easy so do you

have to be accredited? You do. Right. Yeah. So this doesn't get us past. That's not my choice. No, of course. Which is such like a funny misnomer in the crypto space.

Even Jack, obviously, you know, his sort of campaign against Web3, that it's the VCs who are making the money and that it doesn't help the people. It's complete nonsense because of the accreditation law, not because crypto companies aren't trying to cut out the little guy or any other company. You just have to get the money from where you can legally get the money. And that's a VC. But even then, if you look at wealth creation for the public companies and the FAANG stocks and add Twitter in there, his own company, and the run-ups over the last 15 years and this longest bull run we've had since actually bigger than dot com, the wealth creation has been insane. And that's not to the VCs. It's the public markets. So I just

don't buy it. It also is really dismissive of the fact that they probably invested in a lot of things that went to zero. And the entrepreneurs are the ones doing the work, not the VCs, right? I don't report to my venture capital investors on a regular... Anyway, I don't want to belabor this, but it's just not the way... And he knows this in his heart of hearts. The way value creation happens, it's 50% immigrant entrepreneurs who don't know anything about how VC works. They just know they need the money to do what they want to do. Right. Makes perfect sense. Yeah. Necessity is the mother of invention. Exactly. Obviously. So you talked about your own sort of view on the market that you denominate your accounts in Bitcoin and Ethereum and not in USDT and how now you can actually kind of play it both ways in crypto.

Either way you're viewing it, there's something here for you. But I believe there was a time when you would have just said Bitcoin. For sure. Well, first of all, when nothing else existed, I certainly would have. Yeah, but I wasn't there from an accounting perspective yet

because my journey in crypto and Bitcoin, starting with Bitcoin was different because I was really focused on payments and the application of a trustless system to be able to solve problems like now in Ukraine and Canada. But I was thinking about this, you know, 12 years ago. That was the kind of initial excitement factor for me because I was dealing in remittances and emerging markets and I was running a foundation in Haiti at the time the Bitcoin white paper was released, doing remittances between the U.S. and earthquake survival zones and struggling with the banks. So I didn't really, even though I was a closet Austrian economist, I'd read all the, you know,

Hayek, you know, was on von Mises. I knew all this stuff. I just didn't go in that direction because mentally I was focused personally on something else. And once I realized in, you know, 15, 14, 15, where this was headed and that there was a good chance it was not going to work in the short term for payments the way I wanted because of the scaling challenges and just the focus on making this

hard money, then I really dug in from that perspective. So it took me a while. I mean, you basically gave the first TED talk on this stuff. Yeah. 10 years ago last month. But you brought up a really, that this stuff. 10 years ago last month. But you brought up a really, that's crazy, 10 years ago. But you brought up such a kind of an interesting point that I've heard, like people sort of mentioned, in the early Bitcoin days, none of it was about speculation.

None. And about the moon and how much money you could make in Bitcoin, which is funny because then you hear people say how lucky the early guys got to be so rich now. They're lucky. They're not lucky. They believed in a completely different use case for it that they still believe in,

which is why they've held it the whole time. I mean, the amount of Bitcoin I've given away is so insane in hindsight that, you know, would I have given all of that away in 2011 and 12 if I had really focused on, you know, digital gold versus, you know, person-to-person electronic payments, which I believe is what the title of the white paper says, you know, probably not. I'm fine. Thanks for your concern. But, you know, it's know. It's all good. But we wouldn't be here if you guys didn't. 100%.

Yeah. And right, I laugh so hard when everyone says that those people were lucky. Because I would say that anyone who was there for speculation or about the money, sold it a thousand bucks. Yeah, look, no. I talked to people like Tim Draper nine years ago, 10 years ago, and I've known Tim since our dot-com days. And his conviction on price, it kind of floored me because he's, human beings have a hard

time thinking in exponential terms. Very hard time, okay? He seems to exclusively be able to think in exponential terms. And it makes him seem wacky to everybody else. But he doesn't have to be right. If you think in exponential terms and you're right 2% of the time, you're a billionaire. Literally. Right?

Early enough, I mean. On your 100 grand investments. Yeah, you can't be right when it's already there. You have to be right when everybody else thinks you're crazy. Exactly. And he's been the crazy guy enough that everybody thinks he's wacky, but yet he's the billionaire in the room. So that, in hindsight, having watched Hotmail, having listened to him pontificate extensively on exponential growth, and always being somebody who prided himself on extrapolating Moore's law out 10 years, right?

Just didn't look at it from that perspective. Not that everything's about how much are you worth, but still, I mean, it's just one aspect of this that took me a while to come to terms with. Yeah, well, he was saying that to you nine or 10 years ago. That's the point, yeah. So what does that say about the next nine or 10 years? Have we already gone up that exponential curve? Well, I mean, he's talking about Bitcoin at a million now, right? So, I mean, we're at the bottom of the hockey stick as far as he's concerned.

Now I'm blanking because I've had so many conversations. But yesterday, somebody was basically modeling out. It was Brian Estes I was sitting with at dinner. And he was like, my target's 19 million. It seems arbitrary. Seems fine. I said, why? He said, stock to flow. sitting at dinner and he was like, my target's 19 million. Okay. It seems arbitrary. Seems fine. I said, why?

He said, stock to flow. He said, it's modeled out. Take a look. Going there, he's like, I was like, so what are we talking about for this year? They said, lowest end, 100 something. And I said, okay, so what's the high end? This is a dinner conversation. I'm not a podcast.

I said, I'm thinking maybe I would be really, really psyched if we got to 230, 250. It's like, no, a million by the end of the year. But there are people, maybe I sort of dismiss it as 19 million seems like a big number. Well, look, we were- Maybe I'm just not the guy who's thinking like Draper thinks. In March of 20, when COVID started, I think Bitcoin bottomed at like, what, 5,000 or 4,500 or something like that. So it's 10x. Yeah.

Even 38 if you looked at BitMEX, right? Exactly. Thank God they shut it down. You mean they had a scheduled maintenance. A scheduled, unscheduled maintenance, I think is what they said. So that's more than 10x to your point. Ethereum is way more than that. So that's not than 10x to your point. Ethereum is way more than that. So that's not unreasonable, right?

Now, I also have a theory that Bitcoin was experiencing the same network effects that drive stock to flow. And generally, that's been uninterrupted, except for two instances in Bitcoin's history. The first was Mt. Gox. And the second was the China mining ban. Black swans. Right, right. So my theory is that if China hadn't banned mining, Bitcoin might have peaked in the 80s,

like meaning the 80K range, 85K range. It just so happened that they did that ban. They crushed the bull run. Yeah, and so the network effects seem to be catching back up to where they're supposed to be. Talked about retail, talked about institutions. Institutions have a smaller effect on network effects because, and Raoul Pal did a great, great analysis on this, where it's the number of users times the value they're moving around that's driving the price.

So if it's one user moving a billion dollars around, it has a much, it's not irrelevant, but it certainly has a much smaller impact on the price. And so, you know, people have to understand that this whole narrative around institutions, the only thing it's really good for is dramatically decreasing the supply. The flip side of that is they're going to be the first ones to sell if the shit hits the fan. Which we've seen. 100%. Right. And or high net worth, you know, family offices.

They're generally going to be the first ones to sell until they get that conviction, which they don't have yet. I'm currently wearing the most comfortable clothing on the planet. Are you? Unless you're wearing Vori, then your answer is obviously no. Guys, if you've listened to my live streams, then you've probably heard me rant and rave about this incredible company. We love them so much that we reached out and did a sponsorship deal after i've already been talking about them for months yes it's athletic wear but you can wear it almost anywhere and it's the majority of my wardrobe seriously i wear these clothes all the time if they would make a tuxedo i would have worn it to my wedding and you can feel great about wearing

these clothes as well because they're offsetting 100 of both their carbon and plastic footprint. Guys, wearing Vori is an investment in your happiness and your comfort. I am serious. These clothing are incredible. Get 20% off of your first purchase at Vori.com slash Melker. That's V-U-O-R-I dot com slash M-E-L-K-E-R. If you're not wearing these clothes yet, you need to go get them right now. Right. I'm actually wondering, assuming that we make the leap and believe that we're going to effectively tokenize stocks, every market will become 24-7 eventually. That just

seems like very obvious to me. I wonder how that will then affect the price of Bitcoin when we see these massive moves, which always seemingly seem to happen on Saturday when some bad news comes out in the world and it's the only liquid asset that people can sell. Yeah, it's very interesting. If you're panicking about your Facebook stock on Sunday at 10 a.m. and you're just a retail guy, you're literally waiting to hit the panic sell button on Monday morning. You can sell your Bitcoin right then. Right. Even if you're only panicking about Facebook and you just want liquidity. This was interesting because we did some tests on collateralizing stocks using Bitcoin to create synthetic stocks a few years ago.

And the irony is that the price discovery was only effectively nine to five like stock markets. But you could enter orders 24-7 in our system, just like you could with Bitcoin, but nothing would happen until the market opened. So you can enter the order at 3 a.m. on Saturday, and it would just sit there. Even though it was collateralized in Bitcoin, it was a synthetic Tesla share or a synthetic Apple share, whatever, still couldn't do anything until Monday morning because there was no price discovery to be had.

It's a broken system. Yeah. I mean, it's closed more than it's open. But it ain't even close. Right. Yeah. It really seems like the most obvious leap in markets, especially when you see what happened on Robinhood with GameStop, 48-hour clearing. The fact that Robinhood's biggest problem was that they had too many orders and not enough money to fill them. That seems like a problem that should be fixed. And if they had had instant, if it had been Bitcoin, would it have kept going? I mean, as a matter of fact, the lending and

liquidity markets that are out there for Bitcoin right now are awesome. I mean, you could, yeah, 100%. They would not have had that problem if it was crypto or Bitcoin, for sure. You mentioned earlier Ukraine, obviously. And you've been here so early, you've seen this sort of evolution of the use cases. We talked about it was peer-to-peer cash, right? That's all it was, a uh remedy for remittance problems then of course we got the digital gold narrative and we've sort of evolved all these narratives i didn't think 100 million dollars arriving on the

ground of a war zone to be used immediately was the next shining use case for bitcoin yeah look i mean i'm on a panel today specifically about payments and Bitcoin. And I have a slightly different perspective. I'm on with Jack and Yvonne. And, you know, Jack's been this is the new monetary network for the next hundred years standard at Strike. And I have a slightly different perspective than that. I think that there's going to be a bifurcation in terms of how Bitcoin works for payments. I think for you and I, I think what's likely to happen is in the next 10 years, we're going to be holding Bitcoin, Ethereum, and we're basically going to borrow against it and pay in stable coins through a credit card. That's what's going to happen. And Abra is going to push the envelope on that.

We'll give you a 15% loan against your crypto holdings right now for free, zero interest. So that's going to be tied to payment channels in the coming months and years, because we don't have a debit problem anyway. We don't have a problem moving money around. However, the kind of big exception to that is when the man in the middle is either untrustworthy, being canceled by the other governments, is under attack, nuclear war, whatever, then you want a permissionless system in the middle of the settlement itself, right? And that's what you're seeing in Ukraine. That was the narrative around the Canadian trucker stuff. But that's the, you know, hopefully at

scale, the exception. So in that regard, Bitcoin as a payment network becomes kind of, you know, like Shamat says, schmuck insurance. But for the rest of us, it becomes the pristine collateral. Right. Like like in India, it's the it's the gold that gets passed down from generation to generation. The problem is they can't use it for anything. They refer to it as wealth. They're not borrowing against the family gold to do anything. Now, with with Bitcoin, they'll be borrowing against it in real time at the point of sale, and they'll have a credit infrastructure they've never had before. So that's a different kind of perspective on the Ukraine thing, which is going to be

its own thing, I think, right? And so then the question is, well, what is Lightning's value then, right? I think Lightning becomes really valuable in places like Ukraine, places like Venezuela. I'm skeptical that it's going to become hugely valuable here in the short term. And that's a very unpopular opinion with some of my, yeah, I mean, like, you know, Jack is convinced that we're all going to be, he's going to make an announcement today that they have, they're announcing this merchant's service for lightning in the US. And I'm just saying, well, OK, that's what we were trying to do in 2012 when Bitcoin mining fees were $0.10. It's no different. It's exactly the same

thing, right? The only value Lightning has there is that you don't have the $50 network fees or mining fees. And so the question then becomes, what problem are we collectively solving and for who? Right. I mean, you were doing that before there was PayPal, Venmo, Cash App. And no one cared. I mean, we are instantaneously sending digital money, it might not be the money we like, with almost no fee all the time. Huge lesson for entrepreneurs, right?

I just said no one cared. That was wrong. A lot of people cared. The people who were knee deep in Bitcoin loved me. They thought it was, I was like- You were too early. Yeah. No, no, not that I was too early. They were convinced that I was going to help drive the price of Bitcoin to the moon because that's what they cared about. Bitcoin taking over. What I realized is they weren't using the product. I'm saying to myself about. Bitcoin taking over. What I realized is they weren't using the product. I'm saying to myself, hmm, these people love what I'm talking about, but they're not using my product to send Bitcoin person to person. Why not? I dug in, I realized nobody's sending Bitcoin person to person. They want to hold it. So they're all full of shit.

And so be very careful on who you're trying to get to evangelize your product early as an entrepreneur. And if it's not somebody who's actually using it, there's a disconnect. Right. Right. That's humanity, though. Everybody loves to pontificate. And I'm into the newest thing.

It's the most important thing. But they're not actually doing anything. Absolutely. But now our best evangelists are people who have a lot of money in our product. They love it. Yeah. Right. And real users.

Yeah. Real users. I mean, I was at a, this, this, this user event last night with a couple hundred of our customers and like just watching them talk to each other about the product.

It's just awesome. It's gratifying, but you learn a lot too. Right. And it's not evangelists who just want Bitcoin to go up. Right. Which I do want Bitcoin to go up, but I'm running a company. It's also not the people who are kissing your ass and telling you what you want to hear.

No, right. They tell me what they don't like. Yeah, which is important. Yeah. They're incentivized to have things that they don't like fixed. Yeah. So you just brought up two things really quick. One was, again, the billionaire playbook, collateral, right? Bitcoin is pristine collateral. You can custody it. We always kind of make the same joke, but it's not like a billionaire's yacht on the other side of the world that you take a loan against it and now, good luck getting my yacht. The billionaires have been doing this for decades. I have other

customers who've been doing this with, somebody came up to me, said, you know, I didn't realize how wealthy he was, even though he had money in Avra. He says, yeah, you know, I've been living off my Apple shares for 15 years. And I said, what do you mean? He says, I've never sold a share. He says, I have a deal with my bank, and I basically get a fixed loan to value credit line against those shares. And if the shares get to a certain point, yes, I have to pay back or I have to buy more. But generally, the shares keep going up.

So they don't care. Great system until you do it on Facebook and it drops 30%. Yeah, but no, I mean, that is, you just never sell anything and never take a taxable gain. The other thing that you said real quick, talking about Jack and the Lightning Network and the potential announcement that we'll see today. I love his spirit, his conviction. But we've already seen a few of these announcements and they've just gone nowhere. And I'm not saying specific to him, but I remember he made that video, this is me on Twitter sending someone money instantaneously, queen to bishop four, whatever, your move,

nobody's used it. Right, and again, this is- And when I say nobody, I even added the little thing to my Twitter account, the strike thing. Maybe like one person at some point sent me a buck and was like, cool podcast, bro. Probably test. So again, the point here is that

if you're the Pied Piper and the sheep are following you or the sheep herder and the sheep are following you towards the cliff and those sheep aren't the people who are using your product but have a different incentive from you you have a problem as a ceo you have a problem if all your goal is to just be the pied piper and lead the parade it doesn't matter right because your your goal is the you know event evangelism of Bitcoin in and of itself. But he's running a business with investors.

And there's a disconnect. And I can tell you because I lived it firsthand. I tried to explain this. Anyway, they'll learn eventually. The hard way. But eventually you learn that there's a disconnect between Bitcoin evangelists and the people who are using your product. There's a lot of people who are Bitcoin-only companies in this space, CEOs that I talk to in the background, that say things to me in the background that they would never say on camera

because it would piss off the sheep that are following them. Well, right. I mean, you can't get half your customers to sign off because it's the truth. Asking me questions about alt coins and should they consider yield and lending things that we're doing and i'm saying well you know just be careful because you know you've got evangelists who are not going to be happy with what you're doing and and the first comment is usually yeah but they're not my customers yeah everyone's uh doing a little ballet dance right right around what you can what what you

want to say and what you can't say in the world and in this community. I mean, listen, we're sitting at Bitcoin 2022 and you're not allowed to say anything but Bitcoin on stage. I don't care about that. Right. If they don't want to invite me back. But you're attempting to have a conversation about the future of the technology.

And that obviously has to extend beyond just Bitcoin. Look, the future of money is Bitcoin. The future of banking right now is Ethereum, as I see it. The two are going to have a symbiotic relationship. And there's a lot of people here who don't like that. I honestly just don't care. But shouldn't you love that if you're... Of course. But at some point, the truth matters. It's just words. Get over it. Ethereum is actually first and foremost a word, just like Bitcoin is a word. People have these hangups. I mean, I get hate messages on social media from people like, why do you keep talking about Ethereum and just get off it? And I'm like, look, well, I have more Bitcoin than

pretty much everybody I know except Michael Saylor. I have an incentive for the price to go up. But that doesn't mean I'm you know, that I can't see the big picture, you know. So I think people just get so emotionally tied to an opinion they've had for so long. And God forbid they like publicly allow people to hear that they've changed their mind. Right. It might not even be about the actual belief. It's just about the perception of their belief. Yeah, absolutely. I mean, Tone Vase had a conference called Unconfiscatable, right? The big crypto conference that's not just Bitcoin will be permissionless.

Well, for most people, when they hear permissionless, unconfiscatable, it sounds like the same thing to me, right? It is. Exactly. Yeah. And the funny thing about the unconfiscatable idea at this point is that the not your keys, not your coins thing, it's really fallen by the wayside over the past few years as exchanges have improved their security and things. So most, and I believe Gemini's new survey said that 45% of the people who own Bitcoin in the United States or crypto bought it in 2021. Those people don't care about the confiscatable side. They're holding it on their exchange,

mostly. So aren't we at a point now where you still carry counterparty risk like you do with other assets? The way we think about that is, obviously, as a company that says, we're trying to be your crypto bank, we're We're asking you to trust us. Yeah. Ironically, in an environment where the most valuable property of this technology is the fact that you can basically manage your own stuff. The point is to us is that the right partner that you trust in this space should be 100% transparent and committed under all circumstances to allowing you to take your stuff offline and manage it yourself 24-7 anytime and if they're not

Then trust me. There's somebody else who is incentive, right? And and so we get the irony of the business. We're in it's not lost on us the whole team We talk about it all the time because we're some of our biggest customers are around the management team and and we have to be consistently Committed publicly to saying hey look you want to take it offline? You want to put it in a hardware wallet anytime? You know, do it. Right. In the meantime, we got your back. Yeah. I would imagine that also if you're going to custody with a platform, you want the one that's ethos aligned with your own. Like the CEO of the company understands not your keys, not your coins, and is going to treat your money in the same way.

Exactly. Exactly. You know, I think I sit on the risk committee for our lending business and as a customer that aligns our other customers with me. Right. So. You've obviously talked about all the things you're building, sort of the lending products, the sort of trust K1 structure. Is there anything further out before we get done that is a pie in the sky, craziest dream of what you could build with the platform? Yeah, I mean, I want to see people using the crypto banking model first and other traditional banks second or not at all. I've been saying for my team for 18 months,

one of our biggest goals is I want to be able to shut off my bank account. I actually have two bank accounts and basically they exist for me for paying bills and a couple of things that I can't easily do in my world. So I want to get my salary deposited into Abra. I want to have auto conversion into Bitcoin and Ethereum, which we have now. So you can just do recurring buys. That's all there. But now what I want to do is, yes, I can borrow against it easily, which I also do on occasion. But I also want to basically have that, you know, I have my Apple card right from Goldman in my pocket. I want the Abra version and I want it to be an instant on credit line against my crypto for free that I just tap and pay against and just go about my day.

Just like everybody, like the examples with the wealthy stockholders. Right. So so I believe that in the next year, in several countries, that will be true. I look forward to seeing you guys. I think that'll eventually happen here. I think that's going to be common across the industry. I don't know if people are thinking the way we are, but to me, if you think about India, Southeast Asia, Bangladesh's of the world, Turkey, they have no credit infrastructure. Everything's debit. I just described the perfect credit infrastructure for the entire third world. Yeah. Yeah.

I love it. That's a vision that I think we can all share, man. Thank you so much. It's great to do this in person. Always a pleasure, man. Yeah. Good to see you. See you soon. Enjoy the rest of the conference. Yeah, you too. You too. Awesome. Thank you so much for listening to this episode. If you haven't already left a rating or a review on Apple Podcasts or Spotify, please do that now. Spotify just added ratings, so please go ahead and click that five star. I'll see you guys next time.