The Wolf Of All Streets - Steve Ehrlich, CEO Of Voyager on His Huge Bet on Crypto and Why Crypto is the Future, the Advantages of Using a Broker Over an Exchange, Crypto's Fungability, Reaching Mainstream Adoption and More

Episode Date: May 5, 2020

Steve Ehrlich, CEO of Voyager and ex-CEO of ETRADE Professional Trading and Scott Melker discuss the challenges of running a publicly traded crypto broker in the United States, the lessons learned from playing sports, the fungibility of crypto, security and safety, how to reach mainstream adoption, whether institutional money is in crypto, infinite QE and money printing, running a company during the COVID-19 pandemic, the March 12th crypto crash and much more. --- ROUNDLYX RoundlyX allows you to dollar-cost-average into crypto with our spare change "Roundup" investing tool, manage multiple crypto exchange accounts in one dashboard and access curated digital asset content and services. Visit RoundlyX and use promo code "WOLF" to learn more about accumulating your favorite digital assets when making everyday purchases and earn $4 in free Bitcoin. --- VOYAGER This episode is brought to you by Voyager, your new favorite crypto broker. Trade crypto fast and commission-free the easy way. Earn up to 6% interest on top coins with no lockups and no limits. Download the Voyager app and use code “SCOTT25” to get $25 in free Bitcoin when you create your account --- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe.This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

What's up, everybody? This is your host, Scott Melker, and you're listening to the Wolf of All Streets podcast. Every week, I'm talking to your favorite personalities from the worlds of Bitcoin, finance, trading, art, music, sports, politics, and basically anyone else with an interesting story to tell. So sit down, strap in, and get ready, because we're going deep. Let's go. I'd like to thank my sponsors, Round the X and Voyager, for making today's episode possible. We'll hear much more about them later on in the episode. This podcast is powered by BlockWorks Group, the only events and podcast production company I trust. For access to the premier digital asset conferences and in-depth podcast content, visit them at blockworksgroup.io.

I promise you will not be disappointed. I've been looking forward to today's chat for a long time. As you likely know, I've been a huge fan of Voyager since they launched their product less than a year ago, evangelizing heavily for them long before I even met the team. Once I met them in Las Vegas at WCC, we really clicked and they've been staunch supporters of the podcast and newsletter since. Voyager is a revolutionary product with a revolutionary leader. Steve Ehrlich is the ex-CEO of E-Trade Professional Trading with a laundry list of accomplishments that would make any millennial crypto entrepreneur cower. While he described himself as the gray hair

in the room when it comes to crypto, I think you'll come to find that Steve has a deep understanding of the space and the needs of both retail and institutional traders. So without further ado, I'm thrilled to welcome Steve Ehrlich to the show. Thank you so much for being here. Thanks for having me, Scott. Look forward to doing this podcast with you and it should be a fun time going back and forth. Awesome. So let's just start from the beginning. What drove you towards a career in finance? Was it something you were interested in as a child, something that you sort of gravitated towards in college? What's the beginning of this

career? You know, it really started with my dad more than anything else. He always put in my brothers in my head that, you know, learning numbers and trying to go to college to become an accountant was the best way to learn a business. He was an accountant doing, geez, thousands of tax returns during tax season, barely saw him. But he drove into us that if you understood business and the numbers and accounting, you would learn everything you need to know about finance and that would lead your career. So that's what got me started. Went to college for accounting, loved it. Although it was difficult, loved it. And it got me my kickstart into finance.

That's really interesting. I remember you told me, though, you went to college in Pennsylvania, right? Up in Amish country. So you were going from being, as you told me, a New Yorker to college in Amish country in Pennsylvania. What was that transition like? Oh, man, you know, roll over at, you know, eight o'clock in the morning to get ready to go to class.

And you got the breeze goes the wrong way. And boy, was that difficult to get out of bed to walk your way to class, you know, but, you know, used to New York's, you know, sights and smells. And now you're in the middle of cow country. It was great, though. It was a great place. A lot of good friends came out of college in my fraternity, the lacrosse team I played on, we were all pretty tight today. And it gave me a great liberal arts background so I could learn how to write a little bit still can't write that well today but it gave me a little bit more understanding how writing actually means a lot in business as well. So you played lacrosse in college you guys were actually a really good team right?

Yeah well I grew up on Long Island so Long Island was the hotbed back in the 80s, along with a few other locations of lacrosse. Now it's everywhere, which is great to see. But we were ranked as high as six. I think my senior year, we wound up the year six in Division III college lacrosse. It was a great experience. I pretty much started the last two years and played all four years and got a lot of playing time and was happy to be part of a team that was really close-knit and got along really well. And to hit sixth in the country back there was pretty darn special. So we were happy the way it all turned out. It's funny. I grew up in Florida in the 80s, but I'd never even heard of lacrosse until I was in high school. It just didn't exist down here. And I think it started to become much more popular much later. What, what position did you play? I was, uh, believe it or not, uh, I'm pretty small in size, you know,

run about five, seven or so. I was a defenseman. I was a close defenseman, probably the smallest close defenseman in all the college lacrosse my senior year. I think that's what RSID said. Uh, it was great. I was fast. I was able to stay with small attackmen. Games changed a ton today. Attackmen are 6'3", and not so sure I could actually play today. But back then, it was a lot of fun to run and stay with those short, small guys. And it was just a great experience. So you were the smallest defender on a very close-knit team.

Did either of those things sort of teach you lessons about team building and your career moving forward? I always compare, and my team knows this, I do a lot of comparisons between sports, athletics, and team building and business. Because I think the ultimate essence of a team in the sports, the athletic world, is the togetherness, doing things together, working out your problems as a team in the sports, the athletic world, is the togetherness, doing things together, working out your problems as a team, helping each other out, and supporting each other, even though, you know, you guys might not be the best of friends off the field, but when you step on the field, you're all there for a common goal.

So, it's the same thing that really translates well to business. Within the four walls of an office, you may not like the person all that well, and you may not want to go grab a beer or drink with the person who sits next to you, but you're in there for a common goal. And the common goal is to really build a business, support shareholders, support your customers, and bring something special to the marketplace. And you leave the differences aside when you walk in that room. It's just like when you walk on the field, you leave those differences aside and you work together. And I think that's the number one thing I learned about being an athlete

is that you always have to work together because the sum of the parts is far greater than an individual in any circumstance, And that's business and sports. Yeah. There's no I in team is obviously the major cliche for, for sports, but I think anyone who I've ever spoken to who played athletics at a high level and then ended up sort of leading a team has made the same comparison. So I think that's sort of a natural, a natural comparison to make. It is. It's you know, you know, it's funny. I mean, I look for in my employees, uh, when we hire people, we love athletes. I mean, I think I have

three, definitely three, maybe four ex, uh, Franklin and Marshall lacrosse players on my staff. Wow. Uh, so we all had a common background, all different ages, and I'm by far the oldest, but a lot of the rest of the staff, uh, tends to be athletes. And we just think you bring a separate and a different distinct mindset about how to work with teams and how to be competitive. And you're driving yourself when you're being competitive as much as driving a company. That makes sense. So you graduated from Franklin Marshall with a degree in accounting, and now you're the CEO of Voyager. What happened in between? A lot of years. That's why I like to say, as you said earlier, the gray hair in the room. Yeah, a lot of years. Five, ten, no big deal.

Oh, geez. I think it's 33 years from graduation. I can't believe it's been that long. Right? 13. Yeah, 33 years. Really long time. You know, I started my career in public accounting, a CPA firm right out of college called BDO Seidman. I think we were outside the big eight at that point, number nine, then transitioned into the securities capital markets world in early 1994, when I took a job with a firm called TIR Securities under the leadership of a fellow by the name of Jarrett Lillian. Jarrett was CEO of TIR. We actually sold that company to E-Trade in 1999, which is where I really learned a lot about the online brokerage world and the transition to online brokerage and how to really develop online customers, which was way 20-something

years ago. Nobody knew how to market to them or even drive an online business. So we were there at the early stages of that. And from there, built my own, did a management buyout, a unit from E-Trade and renamed it Lightspeed Financial and grew that to be basically the third largest broker in the US by trades per day. I think 2008, 2009, we were doing 450,000 trades a day. First broker to actually do API trading with their own native APIs. And spent some time there, sold pieces off, left there in 2013, and took a little time off, learned a little bit about more API brokerage with another company. I was a small company. I was leading up and got introduced to my co-founders. And, you know, we started Voyager right from that.

Well, I have to ask. So you were in a relatively safe space. Obviously, you're doing very well. It was, you know, stocks, it's all very well regulated. Now you jump to this very nascent asset, obviously, crypto, and to a space that has questionable regulatory guidance, and you decide to this very nascent asset, obviously, crypto, and to a space that has questionable regulatory guidance, and you decide to start an exchange. I mean, that seems like a really, really risky move in your position.

Why did you jump towards crypto and decide to open a brokerage, not an exchange, in the United States? Well, I was intrigued by Bitcoin and crypto probably around 2016, 2017. And when I got introduced to my co-founders, Philip Eitan and Gaspar De Druze, and then probably the most notable of our co-founders is Oscar Salas, the founding CTO of Uber. We got together and we looked at multiple competitors and we said, what can we do different around our product that would really bring some credibility to the space? And since I've always been a guy that takes a different path, when I did Lightspeed Financial, we were diehard professional trading and direct access when everyone was kind of going away from that. I was more than eager to develop a crypto product and bring that agency brokerage solution to

consumers. Now, can you please just explain the difference between agency brokerage and exchange? Because I think that probably the average listener won't understand the difference, but it's actually a pretty, pretty significantly different product. It is definitely one of our major differentiators. We are different than an exchange. And, you know, we chose the agency brokerage path because what we do is connect to multiple exchanges, market makers, liquidity providers. And so we get a depth of liquidity that is deeper than any one exchange. Additionally, it's an opportunity for us to give a best execution quality to our consumers, which is traditional in the traditional equity markets. So we bring that back to the consumers. And then lastly, you know, when exchanges have

issues and, you know, they go down, I mean, it happens and I've been around the market so long, I've seen it happen. The big guys and online brokers went down in the early stages, but exchanges have issues. You know, we have multiple exchanges and marketplaces that we can actually connect to. So if one goes down, we just send orders to a different place. So we don't have that same issue. And that's why we feel the agency brokerage for consumers is a really important piece of the overall digital asset cryptocurrency puzzle. So how does that work technically? Because it seems like it would be extremely difficult for you to source pricing from all of those multiple exchanges and

still be able to execute orders quickly. I mean, what is technologically different that you're doing? That's a great question, Scott. I think it's really relying on the knowledge that we have as a team from my 20 years in the capital markets at this point and how we built routers and execution venues in the equity space, and especially what we did at Lightspeed when I was there, because I've done this before, is we take in all these feeds and we build our own pricing engine and market data. We also build our entire execution system. We spent a lot of time in perfecting that router and that execution system and that market data so that we do aggregate all

this. Just like anyone sees aggregated prices on CoinMarketCap or CryptoCompare or any one of the other ones, we have the same functionality and we see the depth of the market on that. And therefore, we can execute every trade in microseconds, not seconds, microseconds. And that's what we spent a lot of time building and perfecting before we actually came to market, really came to market in July of last year. Everything before that was just testing the model and testing a router. But it allows us to actually execute 34 plus currencies. We have a total vision to be able to use Bitcoin or USDC to trade stocks and other things because the router is so integral to what

we've done and how well we built it. So to be able to trade stocks with Bitcoin and crypto, you obviously have to believe that they're fungible assets. Is that something that you believe? I mean, do you believe that it will be that interchangeable in the future? Well, we definitely do. I think we think it's not only stocks, it's options, it's futures contracts. Everything is fungible. It's your money, right? I mean, I think one of the examples I tend to give people is Oscar was in my office May of last year. I think it was a Friday or so when Uber went public and we were going through some things and Uber was IPO'd. It was down, give or take 10% that Friday. At the same time, Bitcoin started a run. I think it was up 20, 30% between that Friday and Tuesday or Wednesday.

So if you wanted to actually sell your Uber stock, take your 10% loss and then jump on the Bitcoin ride, you would never have gotten your money out of the broker to do that. It takes days. You know, the trade doesn't settle for days. Get your cash from a broker is like pulling teeth. So right then and there, Oscar and I looked at each other and said, this is the opportunity. This is where we've got to get to everything to be fungible. Is that possible in the current regulatory environment? Would the United States allow you to have Bitcoin to stock to option trades? Or is that something that you look towards future regulation for? Well, we own a broker dealer as well.

And so we figured out a way to make that work. And that's basically using our router. We're working on how we do that and how we launch it, which is sometime down the future here. And I wouldn't say years down the future. I would say probably in 21. But we figured out how to do it with the necessary parts. That comes back to the team, the expertise many of the members of my team have from being in the regulated broker deal world, as well as now in our digital asset crypto world. So it's not that far off.

We figured out how to do it. And we'll look to do that at some time in 2021. So you have a fiat on ramp, you have trading, and then the thing that blows my mind is you've now added interest bearing assets or your assets bear interest, many of them. How were you able to do that? It took us some time to figure out the right model to do that. But we have a model where we know what we can give customers and allow them to trade. We think it's another one of those differentiation points for Voyager. We think that the adoption we're seeing because of the two of that, between the interest and

the ability to trade your assets without tying them up, has been a huge plus for customers. Because look, even, you know, I think Bitcoin's, you know, flying today and it's up over 86, 8,700. So you can earn interest and keep buying more. So and flip from one asset to the other and buy more and start earning interest on Bitcoin or USDC. It's a model and it's an algorithm we figured out. And with the right billion dollar partners behind us in doing this, we figured out how

to do it. Remember, the partners we work with on the interest component are investors in Voyager, are big billion-dollar companies. And so we feel really comfortable in working with these guys to make sure that assets are safe. And you're a publicly traded company, correct? We are. It's really brought a lot of credibility to what we're doing and transparency. It's one of the reasons we actually went public is for the transparency. But, you know, our numbers are audited annual by an independent third-party auditor. We have a June

30th year-end, so we're about ready to start on that year-end audit. But at the same time, we have to file quarterly reports which show customers, you could go to our financials and you could see that the number of customer assets we have and the balances we keep on our books as well. So make sure your assets are safe. Oh, let's talk about that. How do you make sure that people's assets are safe? Obviously, crypto is the Wild West and people have heard the nightmares and horror stories of being hacked and people losing hundreds of millions of dollars in the blink of an eye. How do you protect people's crypto? Well, I'll give you the high level because if I give you the low level

and all the details, that wouldn't be fun. It would be too much detail. But it's really intricate how we do it. And it's really based upon a lot of the partners that we work with and making sure that we don't custody all our assets in one place. We have multiple locations. We have a bunch of security in place on the movement of assets. And then even, you know, that even dribbles down to the consumers when they're taking assets off the platform and their assets. We're extra, we do a whole bunch of extra procedures to make

sure that you are who you are and it's safe and be able to move those assets because security to us is one of the most important items. And we want the customers to know that their assets are safe, but you know, it really starts with moving the assets and having the assets in multiple custodians and not one place. Yeah. I mean, one huge hack really eliminates all of these positive things that any broker and exchange is doing. So it seems like it would have to be literally the most important thing that you do, I would imagine. So it seems, obviously, you've made a huge bet on Bitcoin here and on crypto. So what is it about? I guess we could talk about Bitcoin individually. What is it about

Bitcoin that's convinced you that it's worth pursuing this business and building this business around it? Yeah, you're right. I mean, it's, it's as people know me and they start to know me, I am a definite risk taker in business from, you know, I started as a public accountant, so I guess that's not risk at all. That's boring. But it gave me a great education. Then to a broker in TIR Securities that was risky. We were doing soft dollar brokerage, which was most people don't even know what that is, back in the 90s. And then to online brokers early. So when I saw Bitcoin, I saw cryptocurrency, I spoke to a lot of people. I did a lot of diligence. A couple of friends of mine that are now investors in the company, we a game. And he gave me a tutorial on Bitcoin. And I was extremely intrigued. And so I thought there was an opportunity for some other global

currency to have an impact that far outweighs what we do with the dollar. And I think what I mean by that is that monetary policy set by a government that is changing every four or eight years is something that needs to be supplemented over time here. And that's what I was getting out of this. And I think what we're going through now is playing the case to everything that was written 10 plus years ago and the thought behind Bitcoin. We needed an event to actually make people realize that. And so now I think that that thought process is starting to play out. And my friend was much earlier than me convincing me that this was the way to go. And so that was the risk I took. And now I think it's really playing out.

Is your friend extremely wealthy from investing in Bitcoin early? Not really, because I think he got, you know, as most people, he wasn't, he held, but then he had peaks and then he sold. Same as everyone else. Yeah, I mean, there's, you really had to have, I'll say balls of steel to stay in for real,

you know, for the ride from where it was to $20,000. And people have different points where they're comfortable with the money they make. And it's all relative to where you sit in your earnings world and how much you have. So everybody's different, but he was an early adopter. It's funny because I always hear people sort of joke, or I should say even trivialize the early adopters. And they just got lucky and they just happened to be there at the right time and buy, but you touched on it. To be there early is a very small part of the battle. It's to actually hold it through the insane volatility and all these things that have happened in the world and still be there at the

end to sell it. I think very few people, even the early adopters, saw it all the way through. I know very few. So touching on that, there's a lot of other things that we've discussed in the past about Bitcoin. You're talking about the present global economic crisis, the endless money printing. Is the fact that Bitcoin is deflationary, would you say, is that one of the huge selling points for it? Yeah, we have a thing that we're coming out with from Voyager about certain properties of Bitcoin. And the anti-inflationary is really important to us. We really think that Bitcoin is something that will over time replace you know much of the dollar world

and i think we're we're excited about that we like the bitcoin independence uh obviously i think it's independent of any monetary policy and the transparency is really huge i think that's all value props that really help in the adoption of Bitcoin. So it's something we think, you know, 86, 8,700 today. I mean, we think it's going a heck of a lot higher and that's the bet, you know, we're all making and I made in starting the company. So you've been watching markets, obviously, for decades. What the hell is happening right now? I have to ask you because it's so absurd to watch the stock market rage while GDP is contracting and people are losing jobs and all these obvious downside

to the economy. What's going on? I mean, I am shocked by no stretch of the imagination that the market is as high as it is right now. I truly believe we're going to have another correction here. I just don't see, you know, it's artificially high right now. I mean, we're printing money. You know, the P.E. ratio is even, I was talking to someone yesterday, and he said the P.E. ratio, even based on projected 21 earnings is high. This doesn't make a lot of sense right now. And so we think there's going to be a correction. And we think when the correction comes is even more advantageous for cryptocurrency and Bitcoin.

It doesn't make any sense. It really doesn't. But I mean, I think people are happy. I mean, their 401ks and their retirement savings are okay for now. And that's a big piece of why I think this is artificially high. I mean, I agree with you. Obviously, I think money printing is really the key. And then I have to imagine that there's been a lot of people who have just been attempting to short and short and short, and they're getting squeezed over and over and over again. But it seems like it has to correct again. I mean, just like you said, it's at absurd levels at this point. And I just, I don't think that it's sustainable at all.

And I mean, it's earnings season and companies can't even tell us what their earnings are, right? Yeah, they's zero. Yeah, they're canceled. Everyone is pulling back on their guidance. I turned over my shoulder to see where CNBC and where the S&P is now. It's high 2900s. We're off only 10% off the all-time S&P high. Makes no sense.

It's pure market analytics and price discovery shows that it shouldn't be here. But, you know, who am I to say? I mean, I tend to say when I bet on individual stocks and stuff like that and options go against me because I'm always wrong. Best counter indicator is always yourself, right? Yeah. And I mean, I left my money in my 401k um and i just haven't touched it since this whole happened uh so that makes me happy where it is but i still believe there's there's a correction coming and there's going to be a lot of fallout that the unemployment is just creeping up and i still wonder i i have a big thought here. I don't understand how

the PPP money getting into some businesses hands is really going to help when some of these businesses won't be up and running over the eight weeks that they get the money. Right. So how is it really going to help the restaurant that can't bring all the people back in and they're going to pay their employees, but some of them are making more in unemployment. So are they going to be able to pay back that money down the line? Because they're not going to be able to use it

for what it's intended. And then you throw the New York City factor into it. I happened to be in New York City on Saturday picking up some things from our office because I needed them at home. And it was so quiet. I'm like, I don't know how we get back to normal in the next 60 to 90 days in New York City. I don't see how it's possible with public transportation. Yeah, I don't think it's even remotely possible at all. So you just touched on, you've traded in the past. I was

going to ask you if you've ever actually been just an ordinary retail trader making moves on your own or if you've stuck to the institutional stuff and being on the other side. I learned early on when I got into TIR, we got this hot tip once and everyone was told to buy options of Quaker Oats. And I think our entire trading floor probably did, including the Ivorsort trading and operations and a few bunch of things there. And nobody made money. We all lost money. And I quickly learned like, hey, just take your money, put it in a stock and leave it alone and choose good stocks and let it go. So I dabbled in trading. I wasn't good at it. And now everything I do is pretty much robo advisory

stuff because I've always felt as well, if I can't really trade and run a business. And so I'd love to do more research and learn and pick some stocks. But I have a business to run. And my number one focus is running Voyager. And anyway, any money I have now to invest, I always put into crypto. Doesn't matter. It goes into crypto. Really? That's interesting to hear. So you're certainly not risk averse on your portfolio balance then. It's almost a double down, right? I mean, I'm in the business as an agency broker. And then I keep adding to my account because I really believe this is the future, and I really believe in this fungibility of assets.

And I've sat with some high-level CEOs of some investment firms and ETFs and so forth, and it's a common theme. I think we all believe that fungibility and being able to, you know, make things easier for consumers to move is where this is going. It might take longer than we think, but it's, it's where the whole digital asset revolution is going. So you guys have also grown through some pretty large ticket acquisitions. Can you talk about those? Yeah, we love looking at M&A. That's also in my DNA. When I was at Lightspeed, I think we did acquisitions in seven years and really grew the business that way, plus organically. We are growing tremendously organically, but the acquisitions for us were game-changing.

First was buying the wallet Ethos back in October and obtaining a wallet that we believe in the future, decentralized finances is coming, and having that wallet to be prepared for that and to take on the technology that Ethos had with their bedrock APIs has allowed us to bring in crypto deposits and withdrawals and separate ourselves from some of the competition related to who trade in crypto. So we thought it was really important to have a wallet and get the technology behind it. And then the Circle acquisition that we announced in February and closed really quickly and moved the accounts over the end of March was important because it helped us get scale, name recognition.

Having Circle as an investor now in Voyager is great. We're working with them on some USDC things as well. So we're really excited. And I think it's game changing. I think there's two ways to scale businesses in any online brokerage is acquisitions and then organic acquisition and just acquiring customers the traditional methods. And I learned that a little bit at E-Trade when I did M&A for E-Trade as well as we did a lot of acquisitions there too. RoundlyX.com is one of my favorite companies in the entire crypto space. What they do is they take all your small purchases

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correctly, 6%. And there are no limits or lockups, which means your funds always stay liquid. Find out why so many people are making the switch to Voyager. Visit investvoyager.com or search for Voyager on the iTunes or Google Play store and get $25 in free Bitcoin when you use the promo code SCOTT25. That's investvoyager.com, promo code SCOTT25 for $25 in free Bitcoin and start trading today. How do you see the future of DeFi? Why is that so interesting to you? I think more and more people are going to want to control their assets and go P2P with a certain amount of their assets. I think the hardest part is the DeFi is for people who've been in this space for a little bit longer and understand that. But the challenge is getting more people into what I call the top of the funnel, into the digital asset revolution. And getting them in doesn't mean defy right off the bat. Getting them in means let's get them into a brokerage that they're comfortable in dealing with,

just like they would if they were in an online brokerage. And then getting them more and more comfortable, and then they'll control their own assets, and they'll start going P2P, and we'll get into a decentralized finance world. But that's going to take a lot of time too, but I think it's the natural progression. Does that mean that you'll eventually dabble in lending?

We have a lot on our plate. And the team is delivering. Every time I ask for something, the team is delivering it. And yeah, I think we will partner with the right parties to work with lending assets so people could borrow against their assets. We're also working on products like margin. So those who are familiar with margin from the equity markets, you can margin against your coins at some point too. So yeah, I mean, that's where we're going

with this. I feel like we are building the full financial services, digital financial services company of the future here. And being an agency is what allows us to do it because we're able to connect and partner with so many different people and bring the total product suite back to the consumers. I assume you won't be offering 100x leverage. I've seen that game before. You know, I laugh about, I mean, we all laugh about it, but I've seen that game before. You know, I laugh about it. I mean, we all laugh about it, but I've seen that game before. I don't know how many people remember the FX markets and the 101 leverage that was offered early on in the FX markets before it was really regulated by the CFTC.

It blew up FXCM on the Swiss franc. What was the one that blew it up? I can't remember, 15 years ago, 16 years ago. And FXCM was never the same after that. And the regulator stepped in and say, okay, if you want to be an FCM in FX, you're going to have to have $20 million of net cap just to begin with,

which eliminated all the small players. Right. And so we've seen that game before, 100 to 1. It doesn't work. The U.S. will never let that go through. And it's just a crapshoot, really. I mean, I think your odds are better if you put it on the number 15 on the roulette wheel, right?

Far better. Right? It's far better. And you get free drinks. You definitely get free drinks. And I can't wait to the time where we can all go back to that and be around the roulette wheel or the blackjack table and really have any, you know, interaction with people again. But yeah, you know, it doesn't make sense to me. It's really gambling when you think about 100 to 1 leverage. It's not really position taking. People may hedge some of their

positions doing that, but it's really a gamble more than anything else. Yeah, it's absolutely gambling. So we've talked about all the plus sides of Bitcoin. What do you see as the barriers to entry? I mean, I know that obviously, like I speak to my parents about Bitcoin and friends of theirs, and they don't really understand what it is, how it works, how they secure their assets, things like that. So what do you see the barriers of entry at this point are for certainly that generation, but for anyone who wants to invest in Bitcoin? I think you hit a few of them there. So I think people get confused a little bit by this idea of having to hold coins in their own wallet.

Because we see a lot of, a lot being mentioned about that. And like, you need to hold the coins in your own wallet. And that's why we exist because we can make it simple, easy, and secure for people to do that. But I think it's incumbent upon us to explain to people why Bitcoin and cryptocurrency matter. And it all starts with Bitcoin. I mean, we see most of our initial transactions with customers coming in with Bitcoin, then going to other coins. And adoption all starts with Bitcoin. So I think it's incumbent upon us to really get the facts out to

my parents, your parents, a different generation that doesn't understand this and show why, and let them dabble. Right? Let them put $1,000 in an account and see that it's safe and secure and they can get some comfort from it. It's how the online brokerage started. Everyone thinks the online brokerage started and everyone was putting $100,000 accounts in. It started with funding of $2,000 or less. People got comfortable. And I think it's the same way here. Initial deposits are low. People get comfortable with it. I'm getting my fraternity brothers who are pretty much all in the 50s now, all asking how they buy their first Bitcoin. Now, the answer is pretty easy. Go to Voyager and open an account. But I think the next of us, they're like, why

should I own it? What do I do with it? And I'm like, just hold it. Just buy it and hold it. Play with the platform, get comfortable understanding, follow it in the news and the media. And then maybe you'll progress to other assets, but you'll get comfort first. Get that comfort level, then move on from there. I mean, we've talked about it a bit, but what is your specific pitch to them when they ask you why they should own it? It goes back to the things that we look at, right? Is that independence, transparency, you know, the government printing money, you know, it's powered by the people. So there is no monetary policy, you know, and their transactions are efficient. And soon you're going to start seeing them used more. And I think some of the things that are being done with the stable coins and why we're so excited about working with Circle and their USDC is you're

starting to see those coins and being built into POS systems, into where you could actually use it in a bar, restaurant, store, and so forth. And trust me, coming out on the other side of this virus, I asked my 21-year-old son the other other day, you think any bartender is going to want to accept your 10 or $20 bill anymore? It's disgusting. Yeah. The dirty dollars. So we're, we're, we're getting there now. You could, you could just Venmo to the bar and so forth. But I think the use of, of a digital asset like USDC or Bitcoin is just as efficient, maybe more secure, especially if it's on chain. And I think you're going to see that adoption because I don't see bartenders wanting to wear gloves and wanting to accept $10 and $20 bills anymore.

And even if they wear gloves and they touch their face and it doesn't even matter, right? They're bartending, they're back there. There's no protection for people in jobs like that, unfortunately. It's just sort of inevitable. And so I agree with you. I don't see how we go back to that. And I think that is a huge case for Bitcoin and crypto for mainstream adoption. What other things would be the path to mainstream adoption, do you think? Well, you know, I think the paths there are trying to get people to, as I said, understand the Bitcoin world a little bit more and show them how easy it actually is to use. I don't, I really get flustered sometimes when I, when I think people are like, they don't understand it. And I think we've got to get

more, I mean, media coverage of why it matters. Shows like yourself, I mean, that we got to get out to people and see that there's really smart, intelligent people that are working in this industry. And it's not just, you know, the fact of people who haven't accomplished things in the past. And I've listened to a lot of your podcasts and there's a lot of really smart people that are working in this space. And I think that drives adoption where people realize that it's not just a tech play. It's not just some really smart technology person that is building stuff. It's really smart people. And those cover vast industry. And I think seeing some of the institutions starting to come in, the big institutions working in blockchain and digital assets

is going to help get that transition for people, the general public, to be interesting. Do you think that institutional money is heavily in crypto right now? Not yet. I think it's coming. I think people are dabbling. I think there's more in it, people are dabbling. I think there's more in it, a little bit more in it than people think, because I think people keep that a

little bit close to the vest. And maybe the hedge funds or private equity funds that have money might be starting crypto funds. And we're seeing a lot of that, the private equity funds starting digital asset crypto funds. And so they're a little quiet about it, but I think that they're putting money towards these type of companies. Now, you know, the virus has kind of slowed a lot of investing down, but I do think it'll pick right back up. And I think there'll be more investing with these digital assets, whether it's a firm like ours, or it's a firm that's doing more custody or a firm that's doing Ethereum contract, something on the Ethereum blockchain. So I think there's a lot more coming

and people are starting to get in. So you think their exposure to the space may be more, you know, the old joke that the people who made money in the gold rush are the ones who sold the shovels, right? So you think that they may be investing in companies like yours and other blockchain-based technologies rather than actually just buying Bitcoin? 100%. I think that's what we see. I think people want to be part of something. The enterprise value of a company is not just buying the Bitcoin. That's why we stay away from actually holding a lot of Bitcoin. We're huge believers, but we don't hold it on our balance sheet all that much just to effectuate customer transactions because we want to be, as you said, the picks and shovels and the infrastructure to effectuate any transaction across the chains.

And I think that has a lot of value in the marketplace rather than just holding the assets and being kind of an investment manager in the space. And we're seeing money go that way. I think more will come. Obviously, I think BC and PE firms that invest heavily into smaller companies and startups are waiting for the other side of this. And they're trying to support their existing companies that may need a

little help at this point in time. Do you think that it's sort of a meme in the crypto community that, you know, the dollar will die one day and it will be replaced by crypto? I think that's a bit far fetched and a bit very distant in the future and a bit of a Mad Max sort of future if that would happen. But I mean, I'm assuming, do you believe that there's room for both the dollar and Bitcoin to both continue to thrive? It doesn't have to be one or the other, does it? I don't think the, by the time it's one or the other, I probably won't be here. I mean, it'll probably be long past my expiration date. So I think

they do coexist. And I think that's where we look at what we're doing and what others are doing is that they coexist and they have to coexist for a while before one really becomes more dominant than the other, or one can replace the other in this case, like Bitcoin could replace the dollar. It's going to take years for that to happen. And I don't see it in my lifetime, but I think at some point you see a global currency as well that's built on the blockchain. So it's going to happen over time, but not in my lifetime. Right. It could be a digital currency that's not necessarily a cryptocurrency, even a national digital currency or something like a global digital currency, like you said, right? I agree with that. And I think it's,

you know, I think projects that are leaning towards trying to get that have stalled a little bit. Yeah. And I think, look, I think the concept makes a lot of sense. You know, I've said it before is that I think if a company that was spearheading that was high on security and privacy, it might have had more legs. But, you know, we all know that the troubles Facebook has had. Right. But, you know, each country in its own right is building out their own stable coin. And think about how easy it could have been in sending out the stimulus checks. Oh, it's amazing. I mean, it's crazy. It's great. It would have been simple if these were, you know,

on the blockchain and using USDC or Tether. And I prefer USDC obviously because of our relationship with Circle, but using something like that to get it out, you know, it could have been done so much easier and quicker. And I think there are going to be people that don't get their stimulus checks for four or five months because they're going to have to get a paper check. Right. And what happens if you never receive it and then you have to try to track it down? Have fun tracking the US government down for $1,200. It's just not going

to happen. It's hard to get that money out in an efficient manner, trying to track it down as good. Look, and it's not a cut on the government. They've got so much on their plate that if they miss, you know, a piece of the population, you know, they'll get to it eventually. But they're like, OK, you know, we got 80 percent coverage. That's better than zero percent. Right. So they've approved more loans, more small business loans, more loans for hospitals, more stimulus.

What is the end game of all this money printing? I mean, we know what happens in smaller countries like Venezuela, where they get hyperinflation, but those countries don't have the safe haven asset for the world, like the US dollar. But what is the end game of this endless money printing, infinite QE? It's a good question. Look, I mean, you said it earlier, I've been around a long time. And I saw the financial crisis of the 2000s. I saw the internet bubble dump in 2001 or so forth. But even in the financial crisis, there was an end to the printing of the money. I'm looking at this and I'm saying, okay, they've already admitted that even with money that they're getting back from some entities

that shouldn't have gotten the PPP money, that had real viable ways to get money in the public markets, way, you know, billion market cap companies that could have gotten enough money that way. There's still not going to be enough in round two to make everybody happy. And I do think there are, it's, you know, having seen and helped a bunch of people try to file their applications, the self-employed are going to struggle here because I don't know if the government knows how to get those PPP money to folks and how to do it. And the banks, I think, are struggling with that. So where does it go? I think we're going to keep printing money. We're going to see inflation. I mean, you're seeing it already. I mean, prices of meat,

chicken, pork, just normal food we like to eat every day are skyrocketing. And it's going to get worse because the pork production and chicken production is way down. And I think beef is starting to take a hit as well. We're going to be, I don't know where this ends. It just seems like we're going to be printing money to try to help people. Prices are going to go much higher. And I don't know where the balance comes in. Some cities will reopen and get to some sense of normalcy, but others just, it's going to take a longer time. Yeah. I may be one of the alarmists, but we literally bought a cow this week. Is it in your backyard? You feed a cow that you own?

We have family. My wife's family actually are farmers. So we, you know, they purchased a cow for us and we'll continue to raise it and hold it and then butcher it and we will have 600 pounds of meat. But maybe I am alarmist, but I'd rather have it in the freezer and know that I'll be able to eat meat than, you know, be at the liberty of the supply chain. Where do you stand on the spectrum of sort of alarmism with COVID-19 at this point? That's a really good question. I think I'm somewhere in the middle. And I'm worried about the prices of things and the food and getting back to normal. And again, I live outside New York, so I might see things from a different lens than some of your listeners in other parts of the country. But I have, I mean, my mother-in-law who is 86 years old came down with COVID and she was in the hospital for 10 days and got released.

And she's still feeling a little bit of the effects, but she's one of the knock on wood survivors. Wow. And, you know, so it hit home. I saw it. I saw how it affected my kids when she was there and couldn't go visit her or anything. So I have an up close and personal view of it. I saw how it affected my kids when she was there and couldn't go visit her or anything. So I have an up close and personal view of it. I sit in the middle because I know it's it's it's probably not as bad as we all make it out to be. But at the same time, you know, it's bad. It's not as as not open society.

Everyone should be running back to to buildings and restaurants either. So, and another good friend of mine, who's also, you know, one of our early investors, you know, happens, his wife happens to be, you know, CEO of one of the local hospitals here. And I get some updates and, you know, it's not as rosy as everybody wants to think that it's easy to get back to normal. So, I'm kind of sitting in the middle. Yeah, I just, I don't, as you've touched on a number of times, especially with New York City, I mean, I just don't see, even if they reopen, where's that level of trust for the individual to go out and expose themselves and their families to that?

I mean, I just, you know, I've never imagined living in a time with this much uncertainty and that it would happen so quickly. I think that's what's really shocked me is that within two weeks of being in isolation, all of a sudden, every time someone walks near me, I cross the street, that fear of other people, it's just mentally is such a strange space for me to be in. I don't know how that affects you, but it's very strange for me. That's where I think I sit in the middle because I look at it and I see how bad it can get for people having that personal relationship with someone who had it. But at the same time, I'm not that alarmist. When I go for my walk and someone's near me, I don't fret it that much.

I don't fret it at all. But then again, I'm that ultimate, as I like to say I'm more of that risk taker and I don't I like my routine I don't particularly like being separated from my team right you know and I like to be around people I'm a people person and this that's what bothers me so I think from that that mindset I'd rather be standing next to someone having that conversation rather than on zoom or Google hangouts and setting up calls. It's just fun part of, of being living is meeting people. Right. And that's why, you know, your podcast, you get to meet so many different people. It's just, it's amazing. Yeah, it really is. It's awesome. That's, that's what being a person and human and living life is about, you know, going to watch a sporting event and,

and becoming friends with the guy, even though it's for three hours who's sitting next to you at a football game because you both like the New York giants or something. That's, that's what I love. And that's what, that's, you know, that's engaging to me, but you know, we'll get there again. It just is going to take a little bit longer. So I think we, I think in the middle of all this is, you know, we'll get there again. It just is going to take a little bit longer. So I think we, I think in the middle of all this is, you know, just trying to protect people as best as we can, do whatever we can to help people in need at this point in time. And, and trying to get back to some sense of normalcy by hopefully, the summer or the latest the fall.

So that raises an interesting question. Obviously, we have zoom and we have FaceTime and we have all these technologies. So if this had happened 10, 20 years ago, it would be a completely different experience. So I think on one hand, we're extremely fortunate that we have this technology and the ability to actually connect,

but you're the CEO of a large company with a huge team. Do you see that? Has this hurt you at all? Has it hurt those interactions? Has it hurt the creativity? You know, not being in person? Actually, I think it hasn't really had much of an effect. And I'll say maybe it's even on the positive side for us. A, you know, this is the time where online brokers and guys like us grow. And we get, our assets are growing, customers are growing. I know you were on our investor presentation call last week and we're just growing like a weed. But I think this

actually, in a way, has helped my team a bit and helped Voyager because they have a level, I trust my team implicitly. Anything they do, I'm there to back them. So, I've always given them the ability to be creative. And I think when they're home, they're actually probably putting more hours in than they would at the office, all on their own, just coming up with creative ideas of things we should do and how we should analyze data. And I think it's really made us, you know, pretty productive on this. I thought it would take a step back, but I think we're at the same place, if not better. Although there is, you do miss that little interaction with people where, you know, I could tap someone on the shoulder and just ask a question rather than trying to hit it on Slack

or set up a call to discuss. But, you know, from our business, it's been good. But again, back to, I'm a people person. I like to be around and exchange ideas and have lunch with somebody and get to know them more intimately as a person, rather than just an employee. As you said, I was on your call and I was actually really shocked. I mean, like 10X growth since December. You guys are absolutely thriving. And I think my first instinct coming into this crisis was that anything that revolved around money was going to suffer, right? People are going to be broke and nobody was going to have jobs. It would be uncertain, but it seems like more people are buying,

more people are investing, and more people are using brokers and exchanges than ever. I didn't expect that. Why do you think that is? I think that first, when you're sitting at home all day and you're working, but then now the day is over and you're going to just go to do whatever you want to do post-work hours, there's just so much TV you can watch and so much Netflix or Hulu or Apple TV that you can watch. And you have your mobile with you at all points in time. And I think people are like, oh, I can still trade. The market's open. Oh, I'll trade the crypto market. It's exciting. I mean, it's one of the things I'm getting feedback from a lot of our new users is, wow, this app is really addictive.

I can't stop looking at the prices and playing around with it. So I think people look for things to do. And I think that's a time, even in 2007, 2001, on the last crisis, we weren't at home. But the online brokerages seem to thrive in that instant. And a little volatility helps there, too, because people want to check their prices more, right? I mean, this could move up or down pretty quickly. And we saw that in mid-March. Well, yeah.

So let's talk about that. March 12th, obviously, was the day, quote unquote, crypto died, as a lot of people said. Although, as of recording today, it's regained all of those losses. What do you believe happened that day? And did that make you question the space or what you were doing at all? That was maybe one of the worst days I've, you know, from a personal level ever went through uh watching my app and seeing bitcoin go 5 000 4 500 4 000 3800 i'm like is this ever gonna stop um and you know i think there it hit a bottom there and i think anybody in this industry would be kidding kidding you if they said they weren't a little

worried and you know i think we all were worried. And, you know, I think we all were worried, like, is this, you know, is this going to push down further? And is this going to make it like a real afterthought in everything that's going on? But then there was that rebound. And I think there was, I think their leverage, as you talked about, the 100 to 1 on exchanges, and I think that helped just accelerate some of this downward push. And I think I'd be really curious as to how some of those 100 to 1 exchanges, how much they dug into their available excess capital and assets to see where they are today. Because I guarantee you they're in a different position today than they were on March 11. So I think that really accelerated it. And but now we've seen it cascading liquidations, basically, just I mean, you know, I think a lot of that stuff

on those exchanges are probably automated. And look, when you go down, when you're 100 to one, they don't let you. There's no margin calls, they just close you out. Right. So I think the constant closing out just kept pushing this down and down and down. Um, and then the institutional guys probably freaking out a little bit and pushing down a little bit more until there finally was enough liquidation there that people said, okay, you know, maybe there's, this is the bottom. And I think that's what, what happened. Uh, but it's, it was a scary bottom. And I think that's what happened. But it was a scary time. And I think that whole day or two was about, you saw Bitcoin go down, you saw, I think the NBA canceled, went on hiatus the same day, maybe the 12th with Rudy Gobert and what happened in Utah. So

it was a terrifying day, I think, around the globe. Yeah, I think that was definitely a peak fear, you know, around that time. And that probably did have a lot to do with it. I spoke with Mark Yusko on the podcast not that long ago. And his theory basically was, you know, that institutional money was in and that Bitcoin is an exceptionally liquid asset. There was no bids on the bond books. So a lot of that was probably a few huge players who basically needed to sell Bitcoin to raise cash. I mean, I don't know how much water that holds, but that seems to be the prevailing theory that I'm hearing from most people in sort of in your shoes. It's probably somewhat accurate on that. Again, I think it's part of the reason why I say that institutions are coming and some of them are in and they don't really let you know.

Right. Because, you know, their core business is still bonds, equities, options, futures. And, you know, they keep this part a little bit quiet. So it's definitely conceivable that that was it. I was more concerned about just, is this going to be going down to 2000? Are customers are going to be hurt by this? Are they going to lose faith in crypto? And then we slowly started seeing it come back. And we're more than double where it was there. I think, like we said earlier, maybe 86, 8,700 when we started the podcast. And I think it's going to rise. It's going to continue to rise leading into the halving. You'll be happy to know that it's almost 9,000 now.

Oh, that's awesome. Just while we've been talking. Yeah, if we stay on, we'll get to 10. Well, we might actually hit the all-time high if we stick around long enough. So all that said, it has recovered. You guys are absolutely ripping. So what can we look forward to in the future from Voyager? You touched on it earlier, bringing margin and things like that.

What are the big sort of ticket items that you're looking to add before we go? Yeah, margin is definitely one piece we're working on in the background. We're working on the utility of the Voyager token, as well as we start to build out some programs and rewards programs around the token. We're seeing a huge adoption of people wanting to hold that token. We're close to launching our recurring buys and baskets that's coming on probably the next four to six weeks. So people can just add, you know, $10 a week or whatever they're comfortable with to get a dollar cost averaging on that. Those are some of the big

things we're working on. As I mentioned, we're the total cross, crypto to crypto, crypto to stocks, crypto to options. At the same time, we're trying to launch new products for consumers. We're also working on things like that in the background, which takes a lot of testing and a lot of work to do. As I mentioned, we own a broken dealer, so we've got to get that you know set in the right place with the right questions to ask people as well because as much as we do the KYC and AML checks on the on the Voyager digital LLC business which is the money service business the broker business has even more questions that have to be asked related to suitability and so forth so there's

a lot to get done on that part. We're also looking at international fairly well and in depth about how we get to the foreign markets. Our first foray will probably be Canada. We're public there, so we want to bring the product there. We're working with different parties there and different banks to bring that in at some time in 2022, 2020, not 2022, but bring that in this year.

So yeah, we've got a lot working on. Team is, you know, led by our COO, Gerard Hanchian. He does a great job. He really does. He's also our trading guru. So he's also the one that kicks out a lot of good charts and so forth to let people know on his Twitter feed what he thinks is happening in crypto world. Yeah, he's awesome. One of my favorite features you guys have is the integration with RoundlyX. And I know that sounds like an ad because you guys are obviously both my sponsors here. But that's, I mean, being able to dollar cost average blindly into Bitcoin. And actually, I'm doing Ethereum mostly at the moment has been just like the most fun and profitable thing and doing it with no fees with you guys, obviously.

But I've made more money doing that almost than trading because I've been buying every single dip, including the move down to the 3,000s. You know, Andrew and the team over there have done a great job and we're so glad that they're partners of ours. And it is, it's been very valuable to have them as partners.

And, you know, the customers get to utilize our services through a different front end. That's totally fine with us too. I mean, I think that's one piece we haven't yet touched on, but we also have, we're close to launching two major relationships. One is with Market Rebellion and Pete and John Najarian and their third partner, Dirk. They're writing to our APIs and they've been public about it on their Twitter feed that you'll be able to get their education, their analysis on cryptocurrencies and trade through Voyager.

And then Professional Trading Solutions, which is a professional trading platform for really active users that rent to our API. And they have a great product in Sterling Trader and Lightspeed Trader, which was my old business. And now customers, over the next two months, will be able to use that platform and trade through our infrastructure. Same, no fees, but they're using a user interface that makes them happy and they're used to using. That sounds amazing. So where can everybody follow you, follow Voyager and keep up with you after this podcast? Best way, you know, Voyager is on our Twitter feed at Invest Voyager and mine's at Earls15. EHRLS15, that's the two places you can follow me there, follow Invest Voyager.

If you're not following you, they better be following you too. Seriously, come on, guys. Yeah, I mean, it's a great feed. And look, I think it's, you know, you do a great job in promoting, promoting cryptocurrency across this industry. And I think, you know, we really need to do that and work as teams to do that. And whether it's my competitors or myself, it's important that we get people comfortable about what's coming in the future and how financial services and payments and money is going to be moved in the future. I agree. Well, thank you so much for the kind words. And we'll look forward to seeing what you and Voyager have for us in the future. Thanks for having me, Scott. Appreciate the time.

Let's go. Thanks for having me, Scott. Appreciate the time.