The Wolf Of All Streets - Zac Prince, CEO of BlockFi on DeFi, The Implications of the March Crypto Crash, Why Bitcoin Fell So Hard And So Fast, the Culpability of Bitmex and Leverage Exchanges, Money Printing and More

Episode Date: April 14, 2020

Zac Prince, CEO of BlockFi and Scott Melker thoroughly discuss the crypto crash from March 12, 2020, how leverage exchanges, and Bitmex specifically, were responsible for the second leg of the crash, the relationship between global and crypto markets, why it's time for crypto and the dollar to shine, and The Frozen 2 soundtrack's greatest hits. --- 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 to learn more about accumulating your favorite digital assets when making everyday purchases. --- 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. My guest today is a trailblazer in the decentralized finance space, but also one of the more interesting people that you could ever hope to meet. Zach Prince was a top 50 nationally ranked tennis player growing up, a professional online poker player, which is how he paid for college, and a drummer in Texas country bands, very random. Most importantly, he is the CEO of BlockFi. I'm really thrilled to welcome Zach Prince to the show. Zach, thanks so much for being here. Happy to be here, Scott. You have a really diverse and interesting background that I just touched on, but how did that path lead you to crypto? Sure. So I finished college in May of 2009, and I always anticipated that professionally

I would do something in the financial industry, but that wasn't the best time to be looking for entry-level jobs in the financial world, given that we were kind of smack dab in the middle of the financial crisis. And I ended up getting a job at an advertising technology company in New York. I'm also originally from Texas and never thought that I would live in New York City, but I got a job at this advertising technology company and that ended up going really well. The company was kind of at the forefront of the exchange of vacation and real time targeting movement that was happening in the online advertising world. And I joined the startup. It was like 15 people. I was employee number 16. And then fast forward three years, we were 150 people and Google

bought the company. And I spent a little bit of time at Google. About six months, didn't really like it that much. I learned that I really liked being on smaller teams and building things. So I left Google with some of my colleagues. We launched the North American entity for a German-based ad tech company. That did pretty well and was acquired after about 18 months. And more recently and more relevantly after that acquisition, I moved into the online lending sector. And the first company I worked at in the online lending sector was a company called Orchard. We aggregated data and provided tools to institutional investors who were buying loans or financing all of the

largest online lending platforms like SoFi and Lending Club and Prosper and real estate financing platforms. And while I was working there, I started writing a fintech blog on the side, just talking about some of the cool stuff that was happening in fintech, whether it was, you know, investing in fractional shares of commercial real estate or robo advisors or Bitcoin. In 2014, Bitcoin had, after the Mt. Gox hack, gone from 1,000 down to 300. I learned about it. I thought that, you know, simply from a risk-adjusted return profile basis, it looked like a great investment. And so I was recommending that people buy some on this little blog that I had in 2014. And I stayed at that company, the company that was the first one that I worked at in the online

lending space for about three years, left after we raised our Series B and went to work for a consumer lending business that financed large ticket retail purchases at the point of sale for international customers who didn't have FICO scores or for people that just didn't have that great of FICO scores. And I also learned about Ethereum in 2016. And I made this analogy in my head that Ethereum was like an iPhone, Bitcoin was like a BlackBerry. The iPhone is going to be way bigger than the BlackBerry. So I still had some Bitcoin, but I bought a fair amount of Ethereum in early 2016. And for a while, like six or nine months, there was a Dow hack and the Ethereum price

went down and I felt like I just lit a bunch of money on fire. But then late 2016, early 2017, the price started going up. I got increasingly interested in the space personally, and I was talking about it a lot at home. And at a certain point, my wife said, you know, you're talking to me about cryptocurrency and I don't want to talk about cryptocurrency. So you should go to some meetups or something. Find some other like, you know, nerds to talk to about this. Find someone who cares. Yeah. Find someone who cares. And well, I started doing that. And pretty quickly,

maybe three or four months after I started going to these meetups, we started to enter the early phases of the 2017 bull market. And there would be a meetup in New York City where there's a room big enough for maybe 100 people. And there'd be like 500 people waiting to get into this thing. And it went from being like computer scientists and libertarians and some of the super early adopters to also folks from Wall Street, venture capitalists, entrepreneurs. And there was just a ton of excitement about the sector. And I had an experience with a bank. I was applying for a loan to buy an investment property in Texas and the Bitcoin and Ether price had gone up quite a bit. So feeling proud of myself, I listed those as assets on the financial statement that I'd submitted to the bank

when I was applying for the loan and the bank freaked out. And they're like, you know, Zach, we see that you have a job and you have W-2 income, but, you know, we're worried that you might be involved in some illicit activity. And, you know, we don't think that this Bitcoin stuff is actually worth anything. And so it became this whole, you know, extra work in the loan process because I own to justify your oldies. Yeah, exactly. And so that was when I kind of had the light bulb moment for BlockFi. You know, the reason a lot of folks built really big and successful businesses in the online lending world was that they were operating either with a set of products that was relevant to a niche set of consumers and or they were lending in markets where banks were not active.

And I thought that certainly banks weren't going to be active in the cryptocurrency space anytime soon. And that I was given my experience, someone that, you know, was well positioned to start a company around the idea of providing debt and credit markets to the cryptocurrency space. And so I founded BlockFi in August of 2017 around that idea. What are people primarily using your loans for? So the first thing that needs to exist for someone to consider getting a loan from BlockFi is that they need to be bullish on the future value of the cryptocurrency that they're using as collateral for the loan. So our clients that borrow dollars from us secured by their Bitcoin are folks that are bullish on cryptocurrency. In terms of what they use the loans for, the number one use case, and we ask this question of anyone who gets a loan from us, the number one use case is entrepreneurial endeavors. So

starting a business or investing in a friend's business that they're starting. But we also see use cases like purchasing real estate, paying down higher cost debt, purchasing more cryptocurrency is a use case, and making traditional investments. So, you know, if you have an embedded gain in your Bitcoin or Ether or other crypto position, if you sell those assets for cash, you have to pay taxes on it. And if you get a loan, you don't have to pay taxes. So you can get liquidity without triggering a taxable event. And then you can use that cash from the

loan to make other investments. So that's another big use case that we see. Interesting. So to get right to it, you and I were originally scheduled to speak on March 13th and on March 12th was arguably the worst day in the history of crypto Bitcoin, certainly with a nearly 50% drop. So, you know, that was right after the violent downward movement that we were supposed to speak. So I have to imagine that was a pretty insane day for you. Can you tell me, tell me a bit about that? Yeah, sure. So I have to imagine that was a pretty insane day for you. Can you tell me a bit about that? Yeah, sure. So this is the fourth time since we made our first loan at BlockFi in January of 2018 that Bitcoin has gone down

more than 25% in a single day. This is the first time that it's gone down 50% in a single day. I think not only in BlockFi's existence, but throughout Bitcoin's entire existence. So it was, you know, from first thing in the morning through about six o'clock in the afternoon, it was a pretty normal day. It felt a lot like the other three times where we had seen a material price decline. And, you know, our risk management system in those scenarios is very active, issuing margin calls, liquidating collateral in cases where we need to. And it felt pretty standard as events like this go by the end of the normal business day, 6, 630. That evening, I drove up to where I am now

at a house that we have in upstate New York. And by the time I got to our house, the market had started going down again. And Bitcoin went down another 20, 25%. And one thing that happened during the day is that our risk management system takes certain actions, but it's also monitoring the health profile or liquidity profile of the assets that we're lending against. And a couple of flags kind of went up on Thursday that indicated to us that there might not be that much more liquidity if the market did go down further. And what we do in those scenarios at BlockFi is we hedge the downside exposure that we have for our loan book. So we had started doing that towards the end of the day Thursday. And then Thursday evening, as the price was falling even further, our normal operating procedure would have been to, you know, sell more Bitcoin. We elected not to at that specific time. We kind of did a manually.

Yeah, we did it manually. We did a manual override, right? So there's, you know, we have the ability to turn off certain functions on our risk management system at times. Think of it as like a kill switch, especially for the part where our system is selling Bitcoin. And we hit that switch Thursday at like 9.15 or 9.30 PM Eastern time. And we were able to do that because we had these hedges on. And the reason that we did that is, there was no liquidity in the market. You could sell, you know, 50 Bitcoin and move the price 100, 200, $300. And, you know, in hindsight, that was definitely the right thing to do. The market kind of repositioned itself and had largely recovered

and the liquidity profile was starting to look good again by Friday midday. But it was a wild time. And yeah, I think it's interesting to talk about, I know that you follow and have, I think at times, used platforms like BitMEX. But it'd be interesting to talk about next if you want to, what we think were some of the reasons that led to that second leg down, which isn't necessarily something that has happened in other periods of downside volatility for Bitcoin. Yeah, I would love to discuss that. Obviously, there's the conjecture that BitMEX in particular was effectively liquidating 10 million orders at a time into an empty book. And at one point, there was, I believe, 15 million total bids between zero and 3,600. And they likely, although they haven't admitted it,

hit their kill switch. I think they did a unscheduled maintenance in the classic crypto style. And literally, if someone had sold 15 million more, they could have taken the price of Bitcoin to zero. So that, that's what I've heard. I would love to hear the real story or, or what you believe happened. I mean, look, that that's the real story, right? So you have a, uh, kind of cascade of, of liquidations on platforms that offer, you know, much higher leverage ratios than, than what you could get on, on BlockFiFi if you're using a loan from us to buy crypto that basically drove the price down and then found themselves in a market that didn't have enough liquidity to support the liquidations that they would need to do if they kept their system operating as normal. In traditional markets, there have been protections built around this kind of stuff, circuit breakers that get automatically implemented anytime the market gaps down or hits a limit in a period of time. But in crypto, we don't have that.

And I think we're going to start to see places put in some of those controls. I think you're already seeing it with either Huobi or OKEx. I can't remember which one. I believe Huobi is putting in a circuit breaker. Yeah. So, you know, these things exist in traditional markets for a reason. In times where panic is peaking and as a result, liquidity dries up, and then you also have a scenario where you've got margin calls and liquidations happening, some of these functions that exist in traditional markets can be really helpful. And so, you know, my view is that they basically got implemented manually

by folks in the crypto sector. And the good news is that now that we're, for the most part, on the other side of it, I think there's two things that are really important if you think about investing in Bitcoin on a go forward basis. One is that everyone who is levered, you know, excessively levered long to a point where they weren't meeting margin calls eight or nine days ago is highly unlikely to still be in that position. They probably got blown out on BitMEX or, you know, another platform. And the second thing is that we're entering this period of macroeconomic uncertainty, this period of potentially a recessionary environment in traditional markets, which is resulting in money printing from central banks at a scale that has probably, it'll probably be the greatest scale ever that that's happened. And, you know, these are some of the reasons that folks have made a really strong investment

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existence for Bitcoin was eaten through, correct? I mean, on the exchanges, there was nothing left to buy. They were just basically selling into an empty book. I mean, that baffles my mind to think about that. And I don't know if that's a function of because price started so high, people just never imagined they would put orders on the book at prices like $3,500. They thought they'd have time to do it or because the selling was that aggressive. I mean, can know I've had personal friends and I've at times, you know, myself tried to leave a, you know, resting limit order somewhere for, you know, 30, 40, 50 percent down from where the market's trading at for Bitcoin. And, you know, you get bored and you take it off and you just buy some. So there's really not that much depth to those kinds of orders. And the quantity of liquidations that we saw because of the heavy usage of platforms that offer leveraged trading was massive. And it was happening at a time where you're also having panic in traditional markets and margin calls in traditional markets that are also pulling liquidity out of the crypto ecosystem. So, you know, if you're a

long, short hedge fund or a macro hedge fund, and you had decided that, you know, allocating a couple percent of your capital that you're managing into Bitcoin was a smart decision a couple months ago. And things start to get wobbly and panic is setting in. And the traditional equity markets aren't open yet. The first thing you're going to sell is Bitcoin. One, because you can. And two, because it's kind of far out on the risk spectrum in terms of your portfolio. So I think all of those things kind of happened at the same time and created this perfect storm. But what's interesting is that the market has recovered pretty quickly. I agree.

By Friday, we touched down $3,800, $3,700 late Thursday night. By Friday, we were back at $5K. Liquidity was coming back in. So these things take time. And the reality is that people don't operate on the same 24-7 schedule that Bitcoin does. So people have to wake up. They have to give themselves time to see what happened and decide what moves they're going to make. And everything just happened really, really fast. So that's how we got in the position that the market was in late Thursday evening. It's interesting. I mean, I can speak personally.

I stopped out on a large portion of my holdings on the big drop. So I mean, I bled, but luckily not too terribly. But during that first leg that you spoke of, that's when I had some standing orders already. But I added to those lowball orders, totally thinking they would never fill, like 4,000, that area. And I woke up Friday morning, I believe it was Friday morning, and the price was 5,700. And I was like, wow, it bounced nicely. But I didn't even know that it had dropped further because I was sleeping. And I hadn't checked the market.

And I realized I had filled at 4,000 and immediately sold it, you know, between 58 and 5,900 for nearly a 50% gain on one 12 hour candle while I was sleeping. It's crazy. That's crazy. Which is certainly, I mean, I've had similar experiences with altcoins, you know, where you buy, but I, I, I saw the price because I checked the Bitcoin price and I realized where the price was long before I even realized that I had actually filled my orders and was up. So, I mean, it worked out to my benefit. But like you said, I think most people would have probably pulled those orders in fear or they didn't react. And I just kind of got lucky that I made a decision to just in case throw those in there. So, what a crazy day. I'd like to ask you then, I mean, it seems that the existence of high leverage trading is what really caused this crash. Do you believe that that would have happened if

there was only a spot market and if sellers had had to sell directly into that spot market? I don't think you would have seen the severity of moves that you saw. You know, like if all that existed in terms of liquidity venues was, you know, Coinbase, the CME and Binance, which, you know, offers leverage trading. But I don't think they do it at nearly as high of a ratio. Not 100x. Yeah. Then I personally don't think it would have been as severe. So, you know, the question is, do those, you know,

do those venues where you have so much leverage existing, do they start to, you know, lose a little bit of their hold on the market over time as other venues become more adopted? But based on what we're seeing right now, I mean, it seems like BitMEX is kind of, you know, back up and humming perfectly well again. It is, but I've heard, at least I haven't checked myself, that they are definitely suffering a bit of a drop in liquidity. Yeah, but... I guess when your entire book is cleared, that's inevitable. Thursday. That was the time where it was really starting to set in, you know, the gravity of the COVID situation was really starting to set in for folks. You know, I was in the city until

Thursday and my wife then pulled the ripcord Thursday evening. She said, we're going upstate. So, I think you had both of these things acting in conjunction, right? You know, uh, potentially peak panic or close to peak panic in traditional markets and how that flowed through into the crypto market and, uh, the liquidity profile of the crypto market and the high leverage also offered on certain venues in the crypto market kind of worked in tandem, uh, to create an event that, you know, is a bigger single day down move than I think anything that we've ever seen before on Bitcoin. I mean, that was definitely the maximum pain scenario, whether inflicted purposely or not. So we've touched, obviously, on the global markets and what's happening, and it's only

gone further downhill since that time. What do you, I mean, what are your general thoughts on where we're headed on the global markets and what's happening. And it's only gone further downhill since that time. What are your general thoughts on where we're headed with the global economy, the US stock market, printing more money, as you said? Yeah, I mean, we, uh, it gets effectively directed into the pockets of, uh, consumers that are going to be the heaviest hit from this scenario, which, uh, you know, as folks that work in industries that, um, are struggling a lot right now, you know, travel, tourism, food, and how effective we are at kind of directing that stimulus will be an indicator of how quickly the traditional markets will recover. And I think you'll see a big separation starting very soon in terms of performance from equities like technology companies that don't really have a in-person component to their revenue generation versus more legacy traditional businesses or just in general businesses that do have a physical component to their revenue generation. And I think it's

crypto's time to shine. And I think it's the dollar's time to shine. Absolutely. And we've seen some really interesting data at BlockFi in terms of like inflows and trading activities from folks that are on our platform and i think there's a scenario where uh you know for us we we kind of see like a counter cyclical theme play out because you know we have this interest account where people can earn a high yield on cash and they can earn a high yield on Bitcoin. And if those two assets are assets that are well positioned to perform incredibly well over the foreseeable future, then we should be in a good position to benefit from that. But it's going to suck, man. I mean, look,

recessions aren't good for people. And being right in terms of what you do with your investments, uh, is great. Um, but we have to remember to be, uh, you know, compassionate and thoughtful for, for others as well, who, you know, won't have as easy as of a time. What are the implications of COVID, uh, for your business specifically? So we, um, you know, we already, we've got about 85 people at BlockFi, about half our team and most of the folks that a lot of our developers already work remotely, or at least not in our Manhattan headquarters. So we have, you know, we have folks in Poland, we have folks in Argentina, we have a few folks that work remotely across the

US. So our day to day operations include, you know, interacting remotely with with certain parts of the team. Two weeks ago today, we tested like mandatory work from home for everyone. And that worked fine. You know, a few people like didn't have a laptop charger at home, that kind of thing. So we got that all sorted out. And, uh, now we've been operating completely remotely since, uh, since, uh, last Friday. So no one's been in our office, uh, for a week now. Um, and it's been, you know, uh, business as usual, but the longer this drags on, you know, we're, we're very fortunate to have just an incredible, uh, team of people at BlockFi. Um, and there's a lot of, uh, you know, friendships and, um, a lot of camaraderie that like goes on

every day in person at our office. Um, and so if this goes on for, you know, a really long time, we're, we're definitely going to lose a little bit of that. And that sucks. So we're definitely hoping for as quick as possible of a resolution so that we can get back in the office and be hanging out with each other in person. But we don't expect any disruption whatsoever to our day-to-day operations. And do you think it won't affect your growth and product pipeline moving forward? Yeah. So, we don't expect any material disruptions to our near-term products pipeline. We're going to be launching a mobile app very soon. We're launching ACH payment functionality.

We're going to be adding a few additional assets to the platform and all of that is going to continue as normal. The one thing that is a little bit of a question mark right now is the timeline for delivery of the Bitcoin rewards credit card, which we're still hoping to get in marketing Q3. But for that product, we have a couple of partners that, you know, we need to bring, to bring it to market with. And depending on, you know, whether their businesses are able to keep operating at the same pace they were prior to this, that will determine how quickly that comes out. But we're definitely still going to launch it. And all of the stuff that's completely within our control in terms of improvements and new products and features will still be coming out

on the same schedule that we always planned for. Very cool. So I'm curious just for anyone like you who is, you know, effectively holding a large amount of assets for other people, how difficult is security for you guys and making sure that you, you know, are immune to hacks and that people's money is protected? Yeah. So it's, um, it's critically important, uh, in, in everything that we do. Um, and we, you know, have countless, uh, documents countless documents and processes and procedures and operational safeguards in place to make sure that we never lose anyone's money, whether that's from a custody and secure storage perspective or from a risk management perspective. We have some really great partners on that front. So one of the biggest and most important ones is Gemini, who's our primary custodian for crypto assets.

Gemini has been a leader in terms of securing insurance for the assets that they have under custody, in terms of getting SOC 2 Type 1 audits completed, and in terms of just having a perfect track record of operating their cold storage with zero losses of customer funds ever. And we're always thinking of additional things that we can do there. So nothing that is going to be launching imminently, but we're in the market evaluating additional insurance solutions. We're in the market evaluating different ways that we could structure parts of the interest that we're earning to create kind of guarantees around it. And so we expect to always be improving there. But we're happy to say that as we've grown from

zero dollars on our platform to just over a billion dollars on our platform across crypto and cash. We've never lost a penny of customer funds for either secure storage or lending purposes, despite the volatility of the asset class that we're operating in. Yeah, I was the victim of a SIM swap not so long ago. And obviously, I'm a proud customer of yours. And I can definitely say to go ahead and blow some smoke that you guys, at least from my angle, were absolute rockstar superheroes and protecting me. I mean, I was locked out of my account for over a week. There was no ability for anyone to send anything to any address because we had cleared

the whitelist. And I had to literally go through a, you know, physical interview process on a zoom call to prove my identity, even though you guys all know who I am. And so I can say that, like, you know, from, from this perspective, at least that it was very impressive and that, you know, I feel extremely secure, you know, cause there's in this, in this world, people say, you know, and if you don't have the private keys, it's not your Bitcoin. But I think, you know, you guys somewhat proved me wrong on that to some degree. Yeah. I mean, I think we've we've taken a very conservative approach as it relates to security. There have been countless SIM swap or, you know, other hacks that could have gotten access to our customers' funds that we've avoided from some very basic stuff. much a security design mechanism as it is a just general processing and operational timeliness design mechanism. But we also have whitelisted withdrawal addresses. Of course, we have 2FA

as an option when you're creating your account. And we'll be looking to build more stuff into that over time as well. So we'll be looking to add things like beneficiaries as an option on your account. You know, if, you know, God forbid, something happens to you, giving folks the option to, you know, list who BlockFi should contact or who BlockFi should give access to, you know, the funds in that account in that kind of a scenario. And, you know, the reality for me, like I personally bought a Trezor or a Ledger, I can't remember which one. And I was custodying, you know, a large amount of Bitcoin on it for a

while. And I didn't sleep that well at night because I'm the type of person that, you know, I might lose the key, the keys to my apartment on any given month. Everyone's that type of person. And so I think it's, I think it's a beautiful feature that crypto has that you have the option to self custody. Um, I just think that, uh, that option isn't necessarily for everyone. And we try to be, you know, as secure as we possibly can be as a platform providing a service to folks instead of as a self-custody option. I'm not sure if you can hear my daughter belting out the words of Frozen 2 in the background, but I'm obviously at home in self-isolation with my kids um lost in the woods is the hit for us because it's like a peter satara song and the video and in the movie it's kind of like you're watching bohemian rhapsody when they start

singing behind him it's so good so good so yes like I'm a child of the 80s. So I immediately, you know, latched on to that one. But no, I think she's into the unknown right now off key. But so I mean, you're the CEO of a company, you're running a company. And now it's more difficult because obviously, it's remote, you're not in person, and you have the added responsibility of effectively becoming, you know, a homeschool teacher, or at least I do, uh, what's it like having your kids at home and, you know, having to work in this environment? You know, frankly, I've, uh, I've toggled back and forth a little bit from thinking that, you know, this is a, just an awesome opportunity to like spend time together as

a family and, you know, move a little bit slower in life, uh, and, and trying to really enjoy those moments. I've alternated between that and being like, holy shit, I can't do this. I just want to go into my office and be a normal working person again. And we're one week into what might be a one, two, three month scenario here. So we'll see how it goes. Um, but you know, we're, we're very, we're very fortunate. And, uh, at the end of the day, I have no complaints whatsoever. Everybody's happy and healthy and, uh, we're having as much fun with it as we can. I'm teaching Spanish, uh, to the kids, uh, pretty pathetically. Like I posted a picture in our BlockFi Slack of

me, uh, teaching Spanish and, uh, a few folks were very quickly correcting my grammar on the Spanish words that I had written on the chalkboard. So, we'll see how it plays out. But everybody's happy so far. Yeah. I mean, I've definitely found it challenging. But like you said, it's amazing. You find the hours in the day when I think you're not distracted by everything else and you can actually do your work and take care of your kids. But it's going to be interesting to see if this, you know, this week turns into weeks and then months, what that's going to look like for us. I think people are going to be a lot quicker. Well, hopefully people will be a lot quicker to pay teachers higher salaries after they go through the process of, you know,

basically homeschooling when they never planned on having to do that. My mom was a teacher, so I've always been a big advocate that teachers should be better compensated. So, maybe that's a silver lining that comes out of this at some point. Do you think that people will sort of adjust their mentality about life moving forward, appreciate the small things, dinner with friends, things like that, and will actually slow down and disconnect more? Or do you think that people will rush right back to their old habits when this is all said and done? I think that the majority of people will rush right back to their old habits. But I do think

that there will be a decent amount of folks as well who, you know, learn from this experience. Um, I also personally have, uh, you know, seen and read a few things about, uh, like, you know, the water in the Venice canals being like blue and having fish in it again. Um, so I do think there could be a, uh, you know, environmentally conscious, uh, kind of storyline, uh, that comes out of this. Um, you know, look how much, uh, good stuff can happen in a short period of time if we, uh, kind of storyline, uh, that comes out of this. Um, you know, look how much, uh, good stuff can happen in a short period of time. If we, uh, just slow down the, the, you know, gas guzzling, uh, plane flying engine that, uh, we have going. Um, but, uh, we'll see. I'm not, uh, I'm not overly optimistic that we're going to see a ton of change, but hopefully we get some stuff on that.

We get some wins on the margin. It's somewhat incredible to see the same behavior in the financial markets, you know, 12 years later after 2008, the bailouts. I mean, obviously it's different. It's not the banks being bailed out this time, but it's almost like people don't learn any lessons, certainly governments. Yeah. I mean, you kind of get, you kind of get, uh, you, you create this game of capitalism and there's, you know, kind of an, an optimal way to play it. And, uh, until the game changes, I don't, I don't think there's necessarily a different, uh, cycle that you're going to see. Um, and I also don't know that we necessarily want the game to change because I don't know that

there's necessarily a better option than capitalism right like and the same thing can be said for the dollar right like sure you can you know look at how many how many dollars get printed all the time and you can talk about the levels of debt to GDP that the U.S. government has and all of these things but the reality in my view is that there's not really a better option, right? We're not going to switch to the euro or the RMB or the Japanese yen. So we'll see what happens. But I'm not particularly bullish on systemic change. Yeah, I agree.

I mean, one of the biggest narratives in crypto, obviously, is print, print, print. The dollar is going to die. Bitcoin's going to be the future. I mean, maybe you could speak to that, but I don't see that happening. And I don't really want to live in a world where that happens, to be quite honest. Well, you know, grandma loses her house and your family loses their car and anybody who wasn't in to Bitcoin early enough doesn't really have any money. I mean, I don't think that's going to happen. But I do think that even staying in the current system, it's still very bullish for Bitcoin. And I think that we could see a world 5, 10, 20 years from now, where some combination of

the acceleration of dollarization of other economies starts to happen. And also, the adoption of Bitcoin as a little bit of a reserve in different scenarios starts to happen as well. So I think it's completely logical to be both bullish that the dollar stays the reserve currency for the foreseeable future and that Bitcoin reaches new all-time highs again soon as well. I mean, it seems to me that, yeah, we see that the dollar is absolutely pumping at the moment through this economic crash, that the dollar at the moment is the real store of value, even though Bitcoin maximalists like to sort of play that narrative. Yeah, for sure. I mean, you can't debate it. You know, the dollar's up, what, 10%, 15% or something in the last couple of weeks and Bitcoin's down 40. So. Yeah. Well, maybe that will be a good narrative for the future once

it's fixed again. So where can everybody find you after this? Where can they follow up? Yeah. So, you know, check us out. I would imagine a lot of folks listening are already familiar with us, but you know, if you're not, we're the leading provider of interest on Bitcoin and Ether and stable coins in the crypto ecosystem. We also have trading and loan products. Our website is blockfi.com, B-L-O-C-K-F-I.com.

You can find me on Twitter. I'm BlockFiZak, BlockFi and then Zak is Z-A-K. And we're big fans of all the work that you're doing currently and that you've done in the past, Scott. So keep it up, man. Thank you. I appreciate that. And we're all looking forward to see what comes from BlockFi next, especially when we're all out of our houses.

Absolutely. Let's go. Hey, everyone. Thanks for listening. New episodes go live every Tuesday at 7am Eastern Standard Time. Links to our Apple and Spotify channels are in the show notes. You can also follow me on Twitter at Scott Melker to continue the conversation. See you next week.