We Study Billionaires - The Investor’s Podcast Network - BTC196: Bitcoin-powered Banking at Fold w/ Will Reeves (Bitcoin Podcast)

Starting point is 00:00:00 You're listening to TIP. Hey everyone, welcome to this Wednesday's release of the Bitcoin Fundamentals podcast. On today's show, I bring back a super smart and hardcore builder with Will Reeves. Will is the founder and CEO of Fold, a Bitcoin payment and rewards company that he built from the ground up that just recently went public and is now valued at $365 million. This was a fascinating conversation where we not only covered how he did it all, but more importantly, where he's going next, what it means to be able to tap into public markets with a treasury now of a thousand Bitcoin on the balance sheet and much, much more. So without further

Starting point is 00:00:37 delay, here's my conversation with Will. Celebrating 10 years, you are listening to Bitcoin Fundamentals by the Investors Podcast Network. Now for your host, Preston Pish. Hey everyone, welcome to the show. I am here with Will Reeves. It's been a little while since we talked glass will. It has. I think it was the rewards as the Trojan horse for Bitcoin adoption 2020, 2020. Yeah. It's almost been a full cycle. So this is, this is, the fact it's only been one cycle is crazy. It tells you how much we've gone through it. It feels like it should have been like three or four cycles. Hey, so this is massive news. Massive news for a founder and entrepreneur like yourself, IPO. Wow. I think any entrepreneur is just salivating to hear this story and excited to hear

Starting point is 00:01:40 such awesome news. So first of all, congrats to you and what you've built. This came in at, I think the number is around 365 million is where the market cap on the business is going to be or is right now. So talk to us. Like, what in the world does this like to go through? For somebody that's never gone through an IPO personally as an entrepreneur. What is this like? Tell us. Well, it does sometimes make you absolutely love the days of being a private company and a small scrappy startup. I'll tell you that. But I think that a huge win for Bitcoin and Bitcoin focused companies. For the longest narrative about that Bitcoin focused companies are missing the boat on all this crypto craze and all the trading and speculation. And I really think this is a

Starting point is 00:02:27 kind of a bellwether or the canary that is showing that we have reached an inflection point of Bitcoin consumer and institutional products, that they are matured, they have great growth, they're great businesses, and the public markets needs representation from that. And so when we looked at from Fold, we said, okay, what are we going to do in the next cycle to make maximum kind of value for our customers, for our shareholders? and we really thought that a public listing for Fold would be an incredible way to accelerate into this next bowl cycle. And we thought this was just an incredible strategy to achieve many of our goals.

Starting point is 00:03:09 And so we really looked at all the options of how to make that happen. And as it goes, really, it's all about team and timing. And we happen to have found just absolutely incredible team at Cohen with Betsy and Daniel Cohen and our public sponsors. And we saw that I don't think we could have a lot better open window opportunity to make this move to cross this path. And the business was ready. The market was ready. And for us, it was said, you know, we're, I think naturally the right one to pass through and be the first through, which was a big thing that was important for us. Yeah. I jumped the gun here. And I need to explain this to the audience for people, you know, I know who you are. A lot of the hardcore Bitcoin folks know,

Starting point is 00:03:54 folks know who you are in your business, but we get a lot of listeners that are from traditional markets or whatnot. So in short, if you have a fold debit card, you can go out there, you can swipe it. People are familiar with getting airline miles or anything like that. Imagine, instead of getting these airline miles that they do all these fancy tricks with, you're actually getting Bitcoin. Every time you swipe the card, you're getting Bitcoin back and you have literally Bitcoin that you can withdraw out of your app. You just go into the app interface and you can withdraw the Bitcoin straight into your own wallet and take self-custody of it. And the value of Bitcoin over the past decade has done pretty darn good. So think of like your airline miles performing

Starting point is 00:04:35 similar to Bitcoin, it gets really exciting, really fast. And this is just kind of the really generic description of the business that Will has built. Like we just said, they went public and talked to us a little bit about SPACs. So people probably hear this term a lot. I would argue people kind of observing from the outside might not really understand what a SPAC even is or how it's set up. But this is how your company went public. Can you just explain it? Very broad brush, just easy terminology and kind of the elementary to middle school version. Laman's term. Yeah, Lehman's term. So at Fold, we had this concept of we, our next evolution is that we're going to bring the first pure play Bitcoin financial services company public. We knew that that was the angle. That was how

Starting point is 00:05:21 we're going to maximize our brand, our shareholder value. This was going to be one of our main strategic goals. And so when we look at that, okay, the next question is, okay, how are we going to do that? There's primarily three ways. You have the IPO route, which is probably the most familiar. You have a reverse merger where a company then goes and acquires a smaller company that's already public. And then you have a SPAC. And a SPAC essentially is a public vehicle, you can imagine a shell that has been created on the public markets. And that SPAC goes and looks for companies to partner with to then bring them into that shell to become the public company. And for us, it was always a matter of, you know, being a Bitcoin company, you're extremely sensitive to cycles and timing and making sure that you're optimizing at the right time because Bitcoin comes in really fierce swings and volatility.

Starting point is 00:06:17 And so we saw all three of those as options for us. And we kind of pursued various paths, but really it came down to a team in time. We found the exact right team that has number one has been, you know, one of the most. successful sponsors of FinTech and financial services public listings out there. Betsy Cohen alone is a pioneer in the internet banking space as well as financial services. And we found this team with the Coens that was just provided something that we knew that one plus one was going to be equal to 21 type of scenario. And we then looked at, okay, the timing and SPACs really provide a very clean, very fast entry when you have identified that this is a good opportunity on both sides and the business is in a good spot. And so really, it came, it became very clear that in order

Starting point is 00:07:10 to achieve all our goals that this was the right path, we found the right team, and this is the right timing, and this is going to get us there. And so ultimately, this fact became the ideal entry. But ultimately, all of these are just different tools for achieving this end goal of promoting a private company into a public one. $2 billion is what I read in the public announcement as far as the aggregate transaction volume that you guys have done. And this is also really impressive. $45 million in aggregate Bitcoin rewards distributions since you guys have stood up shop in 2019.

Starting point is 00:07:45 These numbers are massive. When you're looking back at starting this to producing numbers like this, like what goes through your head. I mean, every idea all starts with something much smaller. And that smaller idea that we had is that 80% of Americans are participating in rewards programs. And there's a large delta and gap on how people can acquire Bitcoin. You have to attach bank accounts. There's elements of risk, high elements of education that's required in some cases. And so Fultz said, what if we just simplify this and use rewards as a means for people to accumulate Bitcoin, passively every single day in the most easy, convenient way without changing most of their patterns.

Starting point is 00:08:28 This was the insight we had, we saw the channel, and we went for it. What you don't hear in those numbers is that we distributed $45 million in Bitcoin. Now, if we had distributed that same amount of rewards in cash, it would just barely be 20 million. Oh, interesting. Looking at how bold and how Bitcoin is just the apex reward option, is really is born out in the actual data. You know, the customers that have come to us have earned more than they would have at even the highest level cashback cards taking into account Bitcoin's appreciation.

Starting point is 00:09:03 And so what we really have seen is that a company that allows a very large top of funnel, which Fold does, allows people to start their stacking journey. Then they start to accumulate it. And then they start to see that their Bitcoin is not 1% of their portfolio, not 5%, but 25% over the last four years or so. And now they start needing other financial services. And this is where Fold has really remained very true, is let's be very focused on this segment of the Bitcoin,

Starting point is 00:09:34 growing Bitcoin network. The network that's growing faster than the internet itself, let's be really true and attentive to the needs of this growing user base, because number one, they're growing very fast and they're growing very wealthy, very fast. And so we've found that some of these customers, some of those valuable people you can possibly find, and they're completely underserved from traditional financial services. It's hard to get a house if you're a Bitcoiner. And so we started

Starting point is 00:09:59 with rewards, but we then built out essentially a comprehensive banking platform that allows you to hold your dollars and your Bitcoin in a same spot where you can accomplish all of your Bitcoin investing needs, all of your Bitcoin financial services needs, alongside of your dollar needs, your paycheck deposit, your checking account. And this has created a really convenient platform to managing almost 100% of our user's daily financial needs. We're not just a Bitcoin exchange. We're not just a debit card. We're not just a rewards card. We're really have turned into a fully kind of fully fledged banking platform. This is wow. The one thing I want to go back to that you said was this 20 million is what it would be if it wasn't in Bitcoin and it was just in

Starting point is 00:10:44 but it's actually 45 when you look at how much the value of Bitcoin has increased from all of those distributions and rewards that have been distributed. If you were going to turn that into a percentage so that you could compare it relatively to call it a Chase cashback card that pays 1% or whatever the average rate is, what would be the percent to percent comparison? Do you have any idea what that would be? So what Full does with rewards, we do this, we take a different approach. So mostly cash back cards are you spend on this card, you earn rewards here.

Starting point is 00:11:17 But what the hold is done is we have that. You have a card that you can spend with. On top of that, we brought together one of the most expansive merchant rewards networks out there. So grocery stores, retailers, all the big name merchants, Amazon's, all you can get, you know, 3% plus that back. So we have that as well. And a couple weeks ago, we launched the ability to also earn rewards on your mortgage payments. your rent, your credit card bills.

Starting point is 00:11:45 And so when you join Fold, this is not just a card where you're going to earn on a swipe of one card. You're going to earn this literally on every single financial transaction that you make on our platform, which this compounds in a very big way. But even if we just isolated just the rewards on the card, the Fold Card, All In, gives across our merchant offers and the categories and everything is about 1.9% historically. And the leading cashback debit card, which is the discoverer, is at 1%. So day one, we try to be the best rewards debit card you can possibly get.

Starting point is 00:12:21 We have this other secret that we add into it is that we put Bitcoin, that we denominate your reward in Bitcoin. And so you get also exposure to the appreciation there. And we know Bitcoin's cagger from founding is about 63% or so. And the average reward we've given away at full all time has on average. increased 116%. So you start to look at even the base case of like, okay, what am I going to earn today? And that's around the 1.9%. And then if you're also then going to add on the appreciation from Bitcoin itself, there is no competition here. There's zero competition.

Starting point is 00:13:00 Now, if you love lounges and you love upgrading an airline seat, I think we'll have some features down the road that can help with that. But this is truly for people who want to start integrating Bitcoin into their lives and have been a big way. in passively generating Bitcoin on everything they do. Yeah. I mean, effectively, it's doubling it.

Starting point is 00:13:18 Assuming the price of Bitcoin, and we're not trying to like project future for any of that stuff. But based on the past, it's basically doubled cash rewards. When you look at the performance, crazy. There's community things that have been built. There's full math.com.

Starting point is 00:13:32 There's all this. The community is very, we have one of the, I'd say, loudest, most engaged, most loyal communities out there in the space. And so a lot of people try to break,

Starting point is 00:13:42 this down because a lot of the barrier for people to join is, well, tell me why Bitcoin is better as a reward. Maybe I don't tell me why it's better as money, because maybe I haven't figured that out yet, but tell me why it's better as a reward. And so people have created all types of education, calculators and everything to show this. And it really is borne out in the data that it is absolutely a good decision to start as soon as possible, accumulating Bitcoin, whether it's buying it, earning it. And over time, it's been so clear in the data that actually fold as a business, we learned from our customers. And we started to ask ourselves years ago, why aren't we also accumulating Bitcoin natively every day onto our balance sheet? If our customers are doing so well,

Starting point is 00:14:23 why are we not taking the same approach to the business? And that was alone, an amazing unlock that we discovered. Let's take a quick break and hear from today's sponsors. All right, I want you guys to imagine spending three days in Oslo at the height of the summer. You got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future. That's what the Oslo Freedom Forum is. From June 1st through the 3rd, 2026, the Oslo Freedom Forum is entering its 18th year bringing together activists, technologists, journalists, investors, and builders from all over the world. Many of them operating on the front lines of history. This is where you hear firsthand stories from people using Bitcoin to

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Starting point is 00:18:43 Bitcoin on the balance sheet, a fold. Care to elaborate on this? Because I mean, you're kind of hitting around the bush on it. So this is massive. I think it is massive. I mean, we started out company is that we want our customers to accumulate Bitcoin every day. That's a fold you know to love. Then we found out that, hey, every day, you know, all product lines are profitable. Why are we not accumulating Bitcoin every single day alongside our customers when you stack, you stack? And what we found is that just this flywheel effect creates an incredible value generation for the company. And so we found that, hey, if we combine this strategy that we've been developing over the years with a public listing, now we get to offer our shareholders a very direct path

Starting point is 00:19:31 for stats per share increasing over time, not just through financial engineering, but through a business that natively is generating Bitcoin as profit. And so it creates a whole new kind of category, I think, for a public Bitcoin company. But it really took us learning from our customers about how Bitcoin was a best treasury asset for them, for us to truly learn about that from our perspective. And we started to optimize for this. You know, Fold over the years has had a treasury, and there have been times that it has come into incredible value by extending runway, allowing us to tap into it in times of, you know, in a time of need. But overall, we've been able to constantly accumulate more Bitcoin every single day, even before becoming a public company. Yeah.

Starting point is 00:20:17 The part about having positive free cash flows on every one of your product line is so refreshing to hear. Because you hear these people that are like, oh, yeah, I want to buy people. Bitcoin, they're not profitable and it's almost introducing this level of variance or volatility into their ability to perform the day-to-day operations. So we're looking at micro strategy and we see the financial engineering in brilliance. I call it brilliant. Some other people might think it's crazy. But we look at the brilliance of Michael Saylor and how he's tapping into fixed income convertible debt markets and how this has an additional effect in addition to him maybe issuing more stock when he thinks Bitcoin's undervalued and buying Bitcoin with it. Are some of these strategies,

Starting point is 00:20:59 things that you as the CEO of this company are going to consider using moving forward or that you also find to be a smart way to manage the business in this new world that we're moving to where it seems like Bitcoin's going to be at the center of it? Yeah, I think I am definitely on the side of genius on looking at Sailor's inspiration in the path that he's carved and how much that he has laid out the playbook for those to follow. You know, there's $7 trillion sitting in private cash reserves of private companies. The dam is going to break. And Ful has always been a first mover on the growth of the Bitcoin network.

Starting point is 00:21:37 Number one, let's serve these customers who are unserved and this network's growing fast. Let's get there. Let's be there first. We did that. The second is, hey, let's start to build our treasury. And then that was an early thing that we had started years ago. And then the next is, okay, now we're here. can be a public company that's generating Bitcoin on our business from our natural course of

Starting point is 00:21:57 business and also following the path of micro strategy, we have something truly special here. And we absolutely intend to emulate a lot of what micro strategy has shown the market. And we really look at the company as two aspects. We have the Treasury, which we will do, you know, follow a lot of the same tactics that you've seen. But we also have the operating company that sets us completely apart from all others in the public markets that we call our own Sats flow engine that is also generating Bitcoin. The best part about that, it's generating Bitcoin without any dilution at all. It's the most efficient Bitcoin you

Starting point is 00:22:32 could possibly bring on. So I think the twofold strategy is what's going to set this company apart or what provides investors is just a different opportunity. What's so fascinating to me is if you have a fixed income mandate, two of the best performing at the sovereign level and at the corporate level, fixed income issuance that have been out there is micro strategy and the sovereign debt of El Salvador. Both, right? Isn't this really fascinating? So, like, if you sit in a chair and you're allocating billions into fixed income because you

Starting point is 00:23:05 have to, that's your mandate, these two companies, it's a win for them, and it's a win for the owner of this person that has to buy fixed income. I think it's something that hasn't been covered in financial markets at all. I find it fascinating. I mean, you have literally trillions locked up in fixed income that has to be there. And you have these two entities that are operating on a Bitcoin standard and they have some of the best performing fixed income issuance on the planet. So I don't know.

Starting point is 00:23:34 I'm pretty excited to see where this is going to go, Will. It is fascinating how Bitcoin is able to align incentives across parties. And you find these really almost serendipitous needs. I have to allocate money. And here, I have been building an interesting way to accrete value to our company. And these things just find naturally great fits. And it's just really, okay, when does that materialize? And for Fold, it's always been, we've really tried from the beginning to stay very true

Starting point is 00:24:03 about creating aligned incentives with our customers, our shareholders, and creating kind of a virtuous cycle. When you are accumulating Bitcoin as a customer, Fold is generating revenues that will allow us to accumulate Bitcoin to. Over the time, our wealth increases together. We become stronger together. Fold builds even more financial services for you to attend to that new Bitcoin wealth that you have. And as a result, now Fold has been in a position where we have our path to our public listing, which opens up a whole new area to align incentives with our shareholders to finally directly benefit from that

Starting point is 00:24:41 relationship. And for me, why this listing is so important, it really completes that loop. It allows people do not only benefit as a customer here, but as an actual independent business, as an investor. And I think that is a feedback loop that is going to be really amazing to watch over the next few years. So you guys recently refreshed your app interface. From what I understand and what I've read, this was based on user feedback. Talk to us about how you think about user feedback.

Starting point is 00:25:11 The balance that you got a strike between everybody's got an opinion and you kind of or the creators of what you think is best for the user? Like, how do you balance this dynamic of listening but also being independent and leading, right? We have, from day one, we have always been very focused on building directly with our customers in the flow of customer feedback. And that is always a bag of mixed signals, some incredible things, some hard to hear things. But all of it, we've always positioned ourselves directly in the flow of that. Because when you're talking about a network that has been growing like Bitcoin has, you know, it starts in a time of early adopters and it starts to then flow into more

Starting point is 00:25:54 mainstream users and full to seeing this growth firsthand. And so what we need, we said is that as long as we are directly into the flow and needs, demands and insights of this rapidly growing customer base, we're going to build the right thing and we're going to know exactly what to build next. And with a network that's that young and growing that fast, if you're not in that fire hose of information, you're going to build the wrong thing. You're going to build into a whole other aspect. You're going to lose the connection you have into that existing network effect wheel.

Starting point is 00:26:25 And so Fold has always been there in the flow. Now, the question of how we evolve the brand and what we evolve the products always ends up being, hey, this has to come from a vision. And that vision is often held by a small group of people who are taking and absorbing this information the market signals we're getting, and then putting our vision out there for the market to respond. We never do constant revisions of design. Do you really like this? Do you not? We actually just try to get a great instinct about what our customers feel from quantitative, qualitative data, and then we release something truly special. And why this last release was so big is because it

Starting point is 00:27:03 marked an inflection point of the company. We, like you said, we started as a rewards company. just earn rewards passively. Now we have customers who have earned more rewards in their savings than they have in their savings accounts, which is just a crazy thing to think of in a time when people's purchasing power feels like it's going down, their savings are going down, their credit card debt is going up. And you have this strange island of people who are on fold, and that is just not the case. All of those things are the opposite. Their purchasing power is going up, their savings are going up, and their credit card debt,

Starting point is 00:27:38 is coming down. It's a really beautiful thing. Ultimately, that's just showing what happens when you start to adopt bit by bit of Bitcoin standard. And Fold allows you to transition through from earning rewards to, as we built out, essentially a fully fledged integrated banking. You can earn rewards. You can round up your change into Bitcoin. You can DCA. You can smash by. You can create ability for you to hold Bitcoin and then pay your bills with Bitcoin. So you could say, I'm on a full Bitcoin standard and you're using Fold and you're paying your bills, you're paying your daily needs. And we have this incredible user base who is both at the ends of these spectrum. We have those who are just starting their journey, earning some Bitcoin as rewards.

Starting point is 00:28:21 And we have some who have fully come to the other side of the spectrum who consider Bitcoin as their base unit and Fold's able to satisfy that spectrum. And so once we saw the product was able to do this and we had a far more expansive use case, is that the design refresh needed to happen in a way that would reflect, hey, it's not just rewards anymore. This is a full integrated banking platform for Bitcoiners. And that was really a lot of the driving force there. What expanded services would you like to include that aren't there right now? So again, staying very close to our customers. So our customers tend to be you know, 35, 45 years old, they are either just starting families or on their way or in the last

Starting point is 00:29:07 few years have started them. They are just buying a home. They are buying cars. They are making long-term financial decisions. And now, because of using fold, a large percentage of their wealth is now in Bitcoin. And they have this issue where they can try to go get a mortgage and their mortgage companies will not recognize their Bitcoin wealth, which does a lot of things in terms of what rate they're going to get, their down payment that's required. Essentially, Bitcoiners who have been accumulating in Bitcoin are at a disadvantage when operating in traditional financial services, because they don't recognize that value and that wealth. And Fold is there to really change that dynamic, where not only do we value that and give you access to achieve all your financial goals,

Starting point is 00:29:53 but we're going to reward you for doing so. We're going to give you wrote Bitcoin for paying your mortgage with us or your rent. We're going to give you Bitcoin for buying your coffee. We'll give you Bitcoin just for choosing us as your primary banking platform. And with that, our customers have said, I want a credit card. I want auto loans. We want a mortgage that allows us to collateralize a home with Bitcoin. We want a small business, small business loans.

Starting point is 00:30:19 We want a business account. All of these things are directly needed demands from our customers. today, and luckily we've been laying the groundwork to be releasing some of these products on the short-term horizon. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up, and customers now expect proof of security just to do business. That's why VANTA is a game changer.

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Starting point is 00:34:10 incentivize you to adopt Bitcoin. And that was first started on your spending. We've since released buying Bitcoin through us. We have our merchant offers. And we looked at our users and a lot of them started to direct deposit their entire paycheck to us. It wasn't just a little bit for my spending money each month. It was, oh, I'm now operating my entire life on Fold. And a big piece of that was I have my mortgage payments. I have other things I still need to do. Fold, can you help us out? And so we looked at this and said, there's probably no better show of commitment and loyalty to Fold than you direct depositing your paycheck with us and trusting us with that and trusting us that we're going to take care of all your financial needs, giving you all the tools. And so we want to reward

Starting point is 00:34:53 that loyalty. And so we basically said that the more you use fold for your everyday needs as a debit card, for you're buying your daily Bitcoin DCA or getting extra rewards for shopping, we want to give you rewards on your largest monthly purchases. And for many people, that's their mortgage rent credit card bills. And so our customers can now go into the app. They copy and paste their account routing number info, and they apply it to all their billers. And the more they're using the fold app each month,

Starting point is 00:35:25 the higher their rewards will be on their ACH and their largest monthly payments. But really, the story is what is pretty incredible here. It's at a time of record high interest rates, people can earn up to 1.5% back on their mortgage payments, right? So getting up to 1.5% back in Bitcoin for paying your mortgage is essentially a way to lower your interest rate in perpetuity to zero eventually that went away the trends to zero if we continue to see Bitcoin's performance. So it is just a once you, again, once you think about just dropping Bitcoin into traditional finance and all these creative ways changes the financial game for everyday people in ways that gives them financial. superpowers that don't exist and most of their peers just don't have access to.

Starting point is 00:36:16 That's wild. Those numbers are wild to think about. Even at these higher interest rates, you think that it could be collapsed down to zero with Bitcoin's performance because I guess it's compounded. And if you're compounding the return at 50% and you're just not pulling it out of there, it could offset it. Yeah. So I think a lot of this is relying on what Caggar of Bitcoin's growth would be using things.

Starting point is 00:36:39 But really the proof is already. that we have users who have been using us since 2019, and they have entire purchases that are several hundred dollars in size where the original purchase price is lower than the current value of the reward they earned. So those purchases are effectively free. And this is what happens when you adopt the Bitcoin standard. These strange things start to happen. And it's not, when we say Bitcoin standard, that's not 100% on Bitcoin for everyone.

Starting point is 00:37:09 And it starts to mean, hey, let's start moving 1%, 5%, 10%. And the more you move that, the fears for these effects become and that we've seen with our own user base and really gets back to Bitcoin is a tool to democratize wealth creation. We just need to get it in the hands of more people in more creative ways, and it will take care of itself. And that's exactly what we've seen in full. That's what's driven our growth.

Starting point is 00:37:33 That's why our customers go from earning us on one type of reward to just abandoning their bank account and coming to fold entirely, that's the kind of the change that the Bitcoin has in people's lives. Well, what's one of the hardest things or most challenging things you've had to do in building a business over the past four to five years when you just think back through all of it? You know, I've been lucky to have been, you know, I've built products in Fortune 500s. I've been a founder at small scale, stages building products outside of Bitcoin. but there is a whole new level of challenge when you're building inside not only an early stage startup, but one that is operating within Bitcoin that has these really volatile cycles

Starting point is 00:38:16 that you need to plan for. And if you survive those, which fold has, you are left with incredible insights and superpowers that just none of your peers outside of Bitcoin are going to understand or have been through it all. That's why somehow we have been able to focus so much on building. building a treasury so focused. I don't know another startup at our stage that has had such a commitment to building a treasury. Most will just rely on infinite fundraising to get them to where they are. And being within Bitcoin, having firsthand about the cycles and how they go in terms of

Starting point is 00:38:54 users and growth and volume makes us the most efficient possible business that we can be, and one that is there looking for a very long-term goal, that we're not here for the next four years, we're here for the next 40. And Bitcoin helps you learn that, but those lessons are extraordinarily hard to learn as you're going through. Yeah. Speaking of cycles and where you think we're at,

Starting point is 00:39:17 how are you looking at the global adoption of Bitcoin and just general sentiment right now this year in the summer? I mean, when we looked at what we believe were the drivers of, our next of the kind of next cycle that we were going to see. We ultimately saw the things that everyone knows about, hey, we have the ETFs that has created a whole new top of funnel for both institutions and retail. We have seen a lot of the noise that has been existed in the space for a while

Starting point is 00:39:48 that's taken up a lot of airtime and other capital leave and then kind of swept away that is, in my opinion, has kind of cleaned up Bitcoin and Bitcoin companies. we see that Bitcoin, for our own user base, is eating from the inside the personal finance picture of our customers and their families. Like, again, starting with earning a couple dollars in rewards every month to managing their entire, entire monthly spent. You see it have grown that much.

Starting point is 00:40:17 That is the wild thing. And I know that that's not happening just there. That's happening at corporations. We saw with Micostrategia, you know, a similar with Metaplanet, with Fold. and I know we're going to see an absolute domino start to fall. We're seeing this at the pension level. We're seeing this at the nation state level. And we're just seeing, it's not just now waiting for, hey, who's going to do it first?

Starting point is 00:40:41 Because now almost every first has almost now happened. We have Michael Saylor with Michael Strategy. We have El Salvador with their sovereign approach to building and integrating Bitcoin into their country. You have Fold now being the first Bitcoin company, Pure Play Bitcoin financial services. company that's going to be listed, like all these firsts are now there and all of them are displaying tremendous success and momentum when the entire market, and I'm talking about market not only from investors, but consumers is looking not great. And everyone's now going to start to

Starting point is 00:41:13 kind of attune to this at all levels where it will then become a career risk and a personal financial risk not to make some of these adopt Bitcoin adoptions that have kind of come to fruition over the last couple years. And so when I look at the macro, I think we are at the cusp of tremendous growth. And that's why Fold said, we want to put a great company to be kind of synonymous with Bitcoin on the public markets that has a product that can actually build benefit shareholders from a shareholder perspective with FLD, but with Fold our product itself. And it's like, I don't think we could have a better setup for looking from our company's perspective, but even outside of Fold, just for Bitcoin in general.

Starting point is 00:41:54 One of the most recent things just yesterday, I think it was yesterday, I saw Goldman Sachs put $500 million of the Bitcoin ETF, the Ibit. I think they actually bought a couple of them, but it was $500 million worth on their personal balance sheet of the company. And this is just one of many banks, I know Wells Fargo and some others, are literally buying it, sticking in on their own balance sheet. This isn't some product that they're selling to, you know, retail or whoever, that They're just a shell for other people. This is their decision as a company to put a sizable, very sizable position. I think Goldman Sachs, the market cap on that company's $150 billion.

Starting point is 00:42:35 So for them to take a $500 million position and list it almost like a marketable security on their own personal balance sheet is kind of insane. I don't know why more people aren't talking about this because that's telling me they're eating their own cooking of the products that they're selling because it's sitting on. on their balance sheet. They tested the market demand with the ETS being able to sell that to retail. But when you're doing it for yourself, that's real skin in the game. That's not just, hey, we can make a quick buck off this trend or fat. He says, we're going to hitch our anchors to this. And everyone's playing catch up now. Now, luckily, they knew where they're financially, you know,

Starting point is 00:43:14 capitalized, they can make up for time, for lost time. They can. Now, most people, other companies, private companies won't have the benefit of that. It'll be extremely hard for a private company of our size to accumulate a thousand Bitcoin in the near term. Yeah. Yeah. You roll this back. Okay, we have the fold with has a pro form evaluation about 500 million. Very, you know, very small, very early in our journey. Coinbase is at 48 billion. Micro strategy, who arguably has a a good, but not a gangbusters operating company is at $25 billion. Why is that a $25 billion in Coinbase is just shy of half of Coinbase? It's because they had a focused Bitcoin strategy. And you imagine Coinbase could have been. If they had focused on Bitcoin as a long-term savings instrument

Starting point is 00:44:06 for their customers and for their own company, they would completely transform the current picture of where Coinbase is at today. I love this point, Because if you talk to anybody in finance, they're so polarized by the income statement and not the balance sheet. And what I think is playing out right now and in the coming 10 years is there's going to be so much more of a focus on what is sitting on the balance sheet from a return profile standpoint versus in micro strategies is the perfect example. Micro strategy, they're making, what, 75 to 100 million in free cash flows on an annualized basis, which like what you said, is a pretty small amount of free cash flows relative to the

Starting point is 00:44:46 market cap. And you're already seeing the valuations of a business like micro strategy start to bid in the market cap of the business because of how powerful the balance sheet is. But I don't even think it's even remotely close to being priced appropriately for how much Bitcoin sheer amount of over 1% of the entire Bitcoin supply is sitting on the micro strategy balance sheet. You sitting on a thousand Bitcoin for your relative free cash flows, which I don't know. But the fact that you're sitting on a thousand Bitcoin and what that might potentially be worth in the future, I think anybody that's conducting security analysis today on equity, and they're not paying attention to balance sheets that have a lot of Bitcoin, are totally, totally missing.

Starting point is 00:45:28 They're missing. And this is going to catch up. So like, we can personally price that into micro strategy and come to our own conclusions about where that is probably more correctly value. It's probably closer to Coinbase's entire market cap when you actually think about it. And, you know, Coinbase wasn't a position at one time if they were focused to have over a million Bitcoin on their balance. It's not impossible to think about that. And to think about the size of that miss is a deep, is a dark place to go. But you're starting to see that even the analysts who are doing a lot of the direction for these companies and how to price them, how to think about their balance sheet versus their income statement, we know they're not.

Starting point is 00:46:08 taking this into the count at the way that we think it should be valued. And I think that is just going to be an extra tailwind. As those start to break, and valuations of companies start to be looked at in very different ways, that anyone who's early to this strategy is going to have an outsized effect. I think this is very much a power law type situation. And that's why for full,

Starting point is 00:46:29 it was so important to be the first because we are absolutely interested and inspired by what micro strategy is doing. But we also serve customers on a daily basis like Coinbase does. But we take a really different approach. We actually look at Fold as a Bitcoin, almost as a Bitcoin minor, that number one doesn't pay electricity costs, that doesn't, is not affected by the depreciation of A6. And we're not just competing for the 6% or so of Bitcoin that is yet to be mined. We're competing for the 94% of Bitcoin that's already been mined.

Starting point is 00:47:04 And when you think about that, because a lot of, of investors when I think about public companies, they'll think about the Bitcoin miners. And they are great companies at certain points of the cycle. But it's a really hard business because of the electricity costs and the depreciation of their machines. Now, what if you were able to totally remove that and have a Bitcoin miner that was developing a strategy in the public markets? I think we're just going to see something really special as the market starts to understand our story. Not to mention, you don't have near the Kappex that a miner has. You don't have to deal with.

Starting point is 00:47:39 Now, some of them would make the argument that, you know, there's a lot more that you can write down through depreciation and amortization. But I see it as additional variables that you have to manage in what is a hyper volatile and almost insane cycle cyclical environment. Wow, that's so exciting to hear. Will, I just can't wait to continue to follow this story. I think four years, eight years from now, I just can't even imagine where you guys are at and what type of. of opportunities you're going to have to soak up distressed assets and other things that are going to become available on the market as everything is, you know, in my opinion, going through a recap and through a massive, just global transformation with respect

Starting point is 00:48:22 to what are things actually worth in this new unit that is Bitcoin. Anything that you look at out there that you think is an exciting acquisition, I know this is way, probably way too early, but as you're like, as you're thinking about the future, a fold, and you're thinking about how it's really kind of this Bitcoin-powered bank. How do you see the financial sector changing? Do you think that a lot of these too big to fail banks? The fact that they're stacking Bitcoin on their balance sheet, I think, is a good start for their ability to kind of maybe weather the storm. But how do you see this just transforming for a lot of these banks that just have so much bureaucracy and staleness in the way things are done? I think the signal

Starting point is 00:49:05 of them started to stack Bitcoin under their balance sheet is a put on your life vest before you help those and even your other customers. Yes. I like that. And they're taking care of number one first. But I think when they look at integrating Bitcoin into their stacks is a tremendously uphill battle, not only about the bureaucracy that's there, but what to build at all. You know, this is why we've stayed so close to our customer base, because the needs wants and desires of someone who goes from integrating Bitcoin, wanting to integrate, making decision to integrate Bitcoin into their life, in their rapid expansion and needs of new products and services to service all of that is not something that's immediately obvious, but also takes a lot of specialized technology to build.

Starting point is 00:49:49 So I think for full of what's going forward is not only our first mover advantage, building the brand that we have around Bitcoin accumulation, personal finance powered by Bitcoin, but also we are years ahead talking about knowing and knowing exactly how. how to integrate Bitcoin into the full financial stack in ways that are going to take people a lot of time to not only build, but to even green light in a company of some of these sizes. And so I'm glad to see they're saving it from their own balance sheet. I am not bullish on them coming around to actually providing any valuable services to their end customers in any short time period.

Starting point is 00:50:26 Yeah. Yeah. Something that came out in the news just today, and I don't even know if you have an opinion on this, and if you don't, we can just kind of move on. but I saw Apple's NFC upgrade paves the way for USDC, tap and pay on iPhones. The Circle CEO came out. Any thoughts on Apple opening this up? Because this is something that, you know, has really been kind of, what's the word I'm looking for,

Starting point is 00:50:50 safeguarded from Apple's standpoint. Any thoughts on this? I mean, like everything Apple does, it's going to be a walled garden very strictly. But I absolutely see a path to where this is enabling frictionless Bitcoin payments, NFC, which is the absolute dream. And what you've seen is Bitcoin over time increasingly eat into the payment flows and payment network. So Fold started with just allowing you to convert Bitcoin into gift cards. That was like the fringe outside where you were able to do this. That then came. We were the first one that was brought into Visa to integrate Bitcoin

Starting point is 00:51:27 rewards into debit cards. Since then, we allow you to push Bitcoin to your debit card and spend at 100 million places globally. And now you're starting to see the kind of walls start to erode everywhere. And what we've seen is that there's such tremendous demand and the market just doesn't serve it, and which undercounts and undervalues how much latent demand there is. When you have these, you know, most traditional, most ubiquitous services are just themselves saying as a bureaucratic or organizational opinion, we're just not going to integrate Bitcoin. that artificially depresses the actual demand that's there. And what we've seen is that's why Fold has been so successful is because we push forward.

Starting point is 00:52:09 We make the partnerships that allow us to open these use cases. And we feel that this new news with Apple is only going to be an entire phase, you know, step shift above in terms of opening up more and more opportunities for Bitcoin, both as a medium of exchange, but also as just a more readily usable aspect of your portfolio. Yeah. Hey, you were in Nashville. What was your takeaway from Nashville? I was able to go there with my wife, who my wife has been with me almost to all of the Bitcoin conferences going back to when it was held in CD neighborhoods at Tier 5 conference centers in San Francisco, where it was really just a punch of engineers and

Starting point is 00:52:50 tinkerers and people who love to nerd out about Bitcoin. And I had a moment there where I'm just standing, I'm looking at the speakers list. I'm recognizing nobody from the kind of original Bitcoin builder path. And it's all just, it's all just at a such a different level. I think this is kind of what we were getting at before is that Bitcoin has entered a new chapter. And the dam has broken out of this very insular community to one that is larger communities of the mainstream, are now seeing incentives to align with Bitcoin and further Bitcoin's own message much further to new places for better or for worse. than it ever has before.

Starting point is 00:53:31 And it was really one of those moments of how far we've come in such a short period of time because I think this space often under represents how much progress has been made in various aspects. And it's hard sometimes to just look at saying, where were we just four years ago? And it is such a completely different place. And I'm just extremely proud to have been part of it and get to, you know, have been friends with you and all the other people that have been diligently seeing this for a long time. and slowly building this reality.

Starting point is 00:54:01 Yeah. Yeah, same takeaway. It was just like you couldn't move without bumping into some senator that's there or some of the, and this space is so dynamic and there's so much happening all the time that you do lose sight of like four years ago when we talk to each other. Like, if we would have told each other some of the stuff that's been happening recently, we would have just been like, no way. No way.

Starting point is 00:54:23 Yeah. Even the ultra bowls would have called us out on some of these things as being far too out there. But I think we're going to be continuously surprised over these next four years. And it's going to be a different thing. It's not going to be a president talking about Bitcoin anymore. It's not going to be a sovereign nation as adopted in Bitcoin. It's going to be 20 have done this. Or every candidate has to talk about Bitcoin at some point in the trail.

Starting point is 00:54:47 It's going to be one of those things that it's no longer this token first, but a complete saturation of this in these various kind of sectors of the world and culture. and that is when the numbers start to get really big. That's when the snowball effect and that compounding growth that we see really kicks on. We need to have more chats, Will, because I don't think I can wait another four years or where are we going to be in another four years if we wait that long. That's true. Oh, man.

Starting point is 00:55:14 Anything else that you want to highlight or throw out there for the audience? I just am so excited that we have built a company specifically to build and create a value alongside our customers. From the beginning, let's all just earn Bitcoin together. Very innocent, but also, hey, it's going to work. Is it going to pan out? Like literally by almost every metric, our customers are, you know, more wealthy than they were before Bitcoin and before Fold. Fold has, you know, transformed financial position by taking the diligent step to accumulate Bitcoin over that period. And now we get this moment of allowing everyone to join the journey with us as a public company, which is going to change. You're going to change my team's life, my life.

Starting point is 00:55:56 certainly in terms of quarterly reports and being accountable for our vision. And cool part is we've already really been doing that. We're very open about here's what we intend to build. Here's the service and value we intend to give. And I think it's just going to be business as usual for us to fold. And I just love that we have the ability for people to come along that journey. We were able to announce just ahead of the Bitcoin conference that this was even happening. And I think it came out of nowhere for a lot of people.

Starting point is 00:56:26 Fold has just always been heads down, diligently building, just build a great product and a great business. And it really aligned with a team that has, well, I believe is going to be deeply prepared for this journey. We have, I told you about Betsy Cohen and Daniel Cohen, who are legends in their own right. But joining the board, we have Brace Young who ran capital markets for Goldman Sachs in Europe. He's a huge fixed income guy. I think you guys would have wonderful chats together. Andrew Hones, who runs battery finance, He's been pioneering, collateral, like,

Starting point is 00:56:58 injecting Bitcoin into traditional financial and credit products. And I think there is a very bright future ahead of how do we align lenders with borrowers in a way that we both give access to great credit, great terms, low down payments, and we both enjoy the appreciation and upside of Bitcoin. I think it will fundamentally change a lot of how finance works from a consumer perspective and aligning interests. And it's building this team. We have Jonathan Kirkwood who runs 1031.

Starting point is 00:57:30 I think we have all these elements in place that has allowed the full vision to not only grow from where it began, but it's now looking at this next opportunity as a public company. And the vision has just gotten tremendously larger because we have a lot more resources at our disposal now. But we get to dream a lot bigger by bringing more and more people in. So when we changed the ticker two weeks ago over to FLD as a head. of this process of the merging the FTAQ Emerald, which is a SPAC sponsor in full, you know, I think really it was a moment for me when I said the vision is coming true and

Starting point is 00:58:05 we're about to all get to enjoy this next phase of the journey together. And so I hope it's not a next four years press. And I think maybe even we can pre-read some quarterly reports or do a quarter or sound off after. Who knows? I love it. You guys are punching at a whole different level, will. Always hunch above. Beenly, have a good business. And just sometimes you need to follow the fundamentals and you'll find yourself in really great positions. That's right. Focus on the product, deliver value to your customers. And it's like, it's amazing what, and do it efficiently. And it's amazing what happens. The results that pop out of something like that. So kudos to you guys. I was so excited to cover this with you. And thanks for making time and coming on the show. Absolutely. Preston.

Starting point is 00:58:48 And again, we'll make the other one a fast follow. I think we'll have. plenty to talk about as the world accelerates towards after Bitcoinization. Yes, sir. Yes, sir. All right, thank you. Thank you for listening to TIP. Make sure to follow Bitcoin Fundamentals on your favorite podcast app and never miss out on episodes. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only, before making any decision

Starting point is 00:59:18 consult a professional. This show is copyrighted by The Investors Podcasts. Network. Written permission must be granted before syndication or rebroadcasting.

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