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CRYPTO 101
Ep. 710 Robinhood's Crypto State of the Union: What is Next with Head of Crypto Johann Kerbrat
00:57:56
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- [00:00]
Brendan
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- [01:40]
Host Brendan
All right everyone, welcome back to the Crypto 101 podcast. We hope everyone is having a fantastic morning evening because no matter where you're coming in from, you're certainly in the right place place. And this is going to be an exciting one. We are joined here by Johan Krat. He is the head of crypto over at Robinhood. He's a familiar face, a friend of the podcast. And Robin Hood as a whole is a group that we talk about pretty frequently over here. Whether you're in the communities, you're listening to the rundowns. Heck, even if we're on some podcasts, we like to reference what they're doing. They've been one of the big driving factors and forces pushing crypto forward in new and innovative ways. So Johan, it's good to have you back. We appreciate your time and this is also A very special episode because we have a special co host on today, and that's going to be super producer tivo joining us as well. So both you guys welcome and it's going to be an exciting podcast.
- [02:39]
Johan Krat
Thank you. Good to see you. It's been a while. So excited to be here.
- [02:43]
Host Brendan
Yeah, a lot has happened since we last chatted. I mean, it's hard to believe. I think it's been almost two years, and we were just catching up a little bit before the podcast started. And I'll tell you what, a lot has changed in the last two years. Looking at Robinhood side, looking at crypto side, all sorts of stuff going on. I mean, when you look at the tokenization efforts that you all have been making new crypto assets, it's funny, I feel like I'm getting a new notification every week of, oh, this crypto has been added to my Robinhood access just lately. You, you know, you all have been talking about Robinhood chain and there's a lot of other things going on, but there have been ups and downs and we're going to talk about both ends of that during today's podcast. Because while there has been a ton of innovation and a ton of steps forward and the crypto industry over on your end has grown substantially as the whole business has, you know, more recently, I think crypto has been in a bit more of a slump. And, you know, that has effects on all kinds of crypto products, including what you've been doing over at Robinhood. So got lots of good, maybe even some hard questions to go at you with today. But before we get too deep into it again, it's been a while. Can you just introduce yourself and really what you do over at Robinhood?
- [03:58]
Johan Krat
Yeah. So like you said, I'm John. I did the crypto business at Robinhood. I've been at the company for five years, initially joined as a for the crypto group and then move to the head position a bit later in my career here. But yeah, our focus is really everything related to crypto. So from the spot trading business that you're probably the most familiar with, to the bitstamp product that we have now with the exchange and tokenization that we are doing in Europe, all this is kind of in the groups that I manage. And our goal is to make sure that crypto is accessible for everybody and that we actually use blockchain and crypto technology overall to kind of grow and change the financial system so that it's a lot faster, a lot cheaper and a lot more accessible. To everyone, not just people that have access, for example. Yeah.
- [04:56]
Host Brendan
And it's been cool because Robinhood originally started out as primarily just a traditional financial brokerage account where people could come in, they could trade stocks. You know, it was a bit different and innovative. You know, I guess this is a good kind of point to lean into where if you haven't heard about Robinhood, they are, you know, what I would say is one of the fastest growing and leading exchange or brokerages in the world. But the way that Robinhood became so popular is that you all said how can we appeal to, I think the younger generations, how can we appeal to people that are more tech savvy and how can we kind of reinvent, reinvent the way that brokerages are done and looked at and used? And you know, one of the beautiful parts of this is that it's a much more user friendly experience, specifically on like mobile devices, which is where I believe the bulk of the users are and have been. But you guys have been expanding over into the web browsers through the Legend software and programs and it's been cool to see again. I remember when I was way back, I mean it probably was at some point while I was still in college, you guys started adding crypto. And I remember dogecoin was allowed for trading and Bitcoin and like Ethereum and it was like a very, very few select cryptos and people could, could trade these things and it's ballooned into a much more major part of the business and it makes sense because crypto has grown into the trillions of dollars in total market cap here. Before we get too into the, into the weeds, you know, I want to give a quick little disclaimer because we're going to be talking about a lot of like juicy information and I just feel like this is going to be one of those episodes where I need to throw it out there. So real quick everyone, you know, nothing that we say here is ever going to be financial advice. We're not your financial advisors, so do not take it as such. These are just our opinions and a couple of guys talking about what's going on here. So it's, I think it's important to kind of let that be known before we begin. But let's just kick things off high level about the market because for the past man, six or so months, crypto's been in a pretty gnarly, I would say bear market, right? Bitcoin's fallen from 120,000 down to 60,000. Ethereum has fallen. That's about a 50% move down for Bitcoin Ethereum. It's over 60% to the downside. Solana is about 70% to the downside. A lot of these altcoins can be at, if not more than 70% and people are, I think, a little bit frustrated, a little bit confused. They feel the pain. It feels like alts have maybe underperformed in relation to some of the large caps. What do you make of what's going on right now and how are you looking at it?
- [07:39]
Johan Krat
Yeah, you know, I think it's a tough market for sure. We've been seeing that for a few months now. So we've seen that before, like, you know, with cycles. I don't know if I really necessarily believe in the four year cycle that everyone talks about on bitcoin, but I think we've seen these cycles where there is maybe a lack of trust after a big event. In that case following the 1010 event where a lot of derivative platform had issues and suddenly the price really moved quickly. That's since then that we've seen this issue with a bit more of a bear market. And for us what we think about it is just to focus on the same thing that we've been focusing for the past five plus years is building the tools that our customer can use to trade either on this current market or in the future next wave, and basically just focusing on making sure that we will have all the features that they will want when the wave come back. And based on that, we'll see what happened. But overall what we've been seeing from this market is just like there's a bit of doubts. It's also a pretty complicated market with all the micro environment. What happened this weekend again, and I think people are just not quite sure where to invest yet and if crypto is the right place necessarily for them. So on our side, for us it's just going to be a big focus on building the right tools basically.
- [09:12]
Host Brendan
And like you're still doing that, which I think is good, like you're still focused on building the right tools. And we always have maybe a little bit of a cheesy saying over here in crypto, but the bear markets are really builders markets and that's where a lot of the big work gets done. I know Robinhood has made some big bets on crypto, you know, kind of leading into the second half of last year, there was a lot of excitement. I still think there is a lot of excitement on it, but given how the market has shifted maybe over the last six Months or so. Does any of that change at all given the market or maybe other circumstances that are at work?
- [09:50]
Johan Krat
No, I think that's really the beauty of Robinhood. And initially, before I joined Robinhood, I was hesitating a bit. To your point, it was mostly a brokerage platform and I was like, are they really going to be serious about crypto? But when you think about the story of crypto at Robinhood, it started in 2018 in one of the biggest bear market actually, where everyone thought that Bitcoin and Ethereum and everything was dead forever. So the company, the founders actually believed in it. They believe in the idea of bringing accessibility to all type of assets to the customers and giving the choice to the customer at the end of the day to invest in what they think is proper for their portfolio. And so that is kind of the same spirit that we have during this slower market. We haven't even changed our roadmap at all since last year. We are just focusing on shipping what we've been announcing last year at the June event. So everything around tokenization, for example, we've been expanding from 200 stock tokens that we announced initially in June, now we have more than 2,000. And we think that in Europe people are pretty excited about having more and more diversity of assets. We've been launching our Robinhood chain, testnet. We've also been focusing on advanced feature for traders. So now you can trade on Robinhood for as low as three basis points if you use our Smart Exchange routing service. So all these products that we've been really pushing on in the past few months, we are still working on it and we have a lot more to come on the crypto side. And we are going to take that period of time where it's maybe a bit more quiet on the tech side, where there's a lot less maybe query per second and all these things to actually focus on the foundation that we can build. And when the next wave of big advanced traders are coming or big volumes are coming, we'll be ready for it.
- [11:54]
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- [14:57]
Host Brendan
You know, it's funny, a second ago you were like talking about how you're almost nervous to join or you're like, you know, this is primarily a traditional financial kind of stock brokerage platform. And maybe that, that was a hesitation for you. I always go through all of Robinhood's earnings calls and I was looking at the past couple quarters and crypto represents about a fifth, about 20% of Robinhood's total revenue. And so you said, you know, you joined this thing and it was basically nothing. Now it represents around a fifth at some quarters, pushing a quarter of, of all of the revenue over there. I mean, how do you build something like that up? I mean this is just a gigantic company and now it's pushing around a fifth of the overall revenue. What have been the biggest factors to kind of get you from nothing to everything from 0 to 100.
- [15:51]
Johan Krat
Yeah, I mean there is a lot of things that have been depending on just the beauty of Robinhood and the foundation that we were able to use to actually build a crypto business on. And so initially, the first few years we, we had some chance with for example, listing doge to your point where we saw a lot of volume in 2021. But we also I think need to give a lot of credit to, to the CEO of the company, Vlad and his co founder as well, where for long time they are just believing in this idea that we need to remove barrier to entry for people to access the markets. Not just crypto markets, but any markets. And if you think about the investor on Robinhood, a very large portion of them are brand new to investing. But what the ui, the ux, the education tools and all the systems that we are building are helping with is that basically we are removing this idea that investing and directing your finance is too complicated. It's not for you, it should be just done by a financial advisor. And instead we are giving you the power to make the decision for yourself. And so slowly what you see is people starting with a little bit, testing the water a little bit, trying to understand what's going on and then slowly putting more and more of their own finance. And it's something that happened for me as well. I opened my Robinhood account more than 10 years ago, I think now, and I was just moving into the U.S. i was like, oh, this is awesome. I can actually self direct my investment. I don't have to talk to a banker, I don't have to pick up the phone, you know, and I'm one of this like guy who hates Picking up a phone to talk about, you know, just your financial advise advisor. So I think that's been really one of the key factor that helped us really build on top of, you know, the entire brokerage that we had brand new crypto business. But the other thing is there was this strong belief from the founder that we should invest into the technology. And I think it's a big differentiator from some of our competitors where you saw some of them, they launched crypto business and they shut it down in 2021, then they launched it again. And that just creates one difficulties for them to build on top of it because they don't have that time to actually build a foundation and really build all the features that are around it. So what they do usually is they use a third party. So you have a lot of limitations on term of features in terms of cost and all these kind of things. And two, it also doesn't allow the team to work on more than just the trading aspect. And so I think for us, having this strong support from the CEO and making sure that crypto is always something that we think about has been the right push to put us in that seat. And I think last year what was exciting for us is that for the first time we were really pushing and using crypto for not just trading of assets. We launched staking, for example, we launched tokenized assets for stock tokens. So we have all these US stocks and ETFs that are now tokenized. And I think that's really also exciting for our team because for the first time we use the crypto technology for more than just the crypto world. But we are actually improving the traditional finance system by bringing all the innovation of blockchain, so transparency, fractionalization by default, instance element, all these things that are still missing right now in the tri Fi market.
- [19:31]
Host Brendan
Yeah, they are. And you mentioned a couple of different products in there and we're going to get into a couple of those as we kind of move on. One of the thoughts that I had as you were going through those and you made the reference that other companies have tried to do this, some of them close it down, some of them keep it up. One of the trends that we've noticed is that it feels like Robinhood has been a trendsetter and not just crypto, but I think in the average brokerage experience, what we often see, and this isn't just to glaze, but this is like actually been something that we talk about on other podcasts or rundowns and you know, some of our other communities is that you all will launch something and then it feels like maybe a couple months later, maybe a year or so later, you see another brokerage to do it, whether it's different crypto features or, you know, whatever it may be. And then all of a sudden it comes and it's like, hey, you guys are tokenizing stocks. I think that's been like one of the great examples as you guys have come out as a primary brokerage account and said, we're going to do this. You have thousands of them that are across and available throughout Europe. You talk about creating your own chain, you know, doing a lot of other tokenization work over there. And then you start seeing other, other brokerage and maybe competitors, dare I say dude as well. Does that ever get like frustrating? Do you ever look to the team in the background? You're like, these guys are doing it again?
- [20:51]
Johan Krat
You know, I think it's, it's an interesting one. We don't necessarily spend a lot of time at looking what the other are launching or if they are trying to catch up or whatever. I think what we are more excited about is any product that we launch. We want to make sure that there is a differentiator and we want to make sure that it's better at some level than what the competition is doing. So sometimes we are not the first one to launch a product, I think, for example, staking or other type of products. We were definitely not the first one. But what we did instead is spending a lot of time with customers, coming to them and doing user research, seeing how they react to the UI and ux. Did they understand what they were doing? Do we need to add more education, all these kind of things and really trying to make the experience pretty unique. And I think that's kind of the secret sauce for Robinhood is sometimes we probably spend a bit more time than what the competitor will do to launch a product. But we think that the ui, UX coherence and the experience overall for the customer is better. And you see it across all the products that we've launched, like not just crypto, but if you think about our credit card, for example, with the reward, that is pretty unique, the design of the card, that is really unique. We try to take an existing problem where some of these cards are only allowed for the elites and we actually make it more accessible to everybody. And on top of that we try to bring the secret sauce where we are going to give something that is very hard to match and to compare. But I also think it's a big compliment for all the teams that are working here. When we see someone trying to do the exact same thing as we just launched, it means that we actually hit the target and that it made them excited enough to actually try to build it as well. So I will say it's always interesting to see how the competition react and to work towards grabbing more market share from them.
- [22:56]
Brendan
Yeah, democratize finance for all is your guys slogan. You definitely do that as a credit card holder. When you guys rolled that out. Brendan remembers I was one of the first people I got selected and I got it and everybody was still on the wait list waiting for it. I felt, I felt honored. It was a privilege. And the UI experience there was really awesome. The rewards program's cool. Question you mentioned earlier, you said we haven't really changed anything to our roadmap. So the kind of. The first part of the question is if you haven't changed while we're in this build builders market, what are you doubling down on? And then the kind of. The second part to that is I'm really interested in your take on somebody who's been in the crypto space for so long. Somebody who has been building for years the AI narrative that has just penetrated not just the crypto market, but the entire, you know, stock market as a whole. And we found it interesting on our rundown how kind of the IGV software stock is traded similarly to bitcoin. So maybe bitcoin's gotten wrapped up in that narrative. Fundamentally. Do you have a take on that? And how has AI not affected your roadmap or made it affect it? Made it faster, made it better? What's your thought on that? Just as a, you know, somebody who's a veteran in the space.
- [24:08]
Johan Krat
Yeah, I mean, AI is probably the most exciting thing in the past few years where it's really changing the way we are working in a lot of ways. So initially we focused a lot in bringing the tools internally, making sure that everyone at the company can start using these tools, can start understanding AI. And it's really different way of working now. Like, you know, for example, you can have someone who's not technical at all querying very complex databases and making very complex queries through just a chat agent. So that really changed the way that our product manager or compliance or legal teams are working. And it really gives them a lot more autonomy and it just makes everything faster, to be honest. They don't have to constantly talk to a data science person or an engineer to get some technical answer. So that's been a big change. Same thing for engineering. Now we have a lot of these tools that are helping engineers build faster. So you can use it as kind of an agent on the side that helps you write code or write queries, and you can even have some agents just writing the code itself and shipping it. So that has been a huge unlock. We see a lot of our code now being written by AI, being reviewed by AI, being deployed by AI. So all of that is really kind of changing the way we are able to ship and the pace we are able to ship at. And I think that's pretty exciting for us. I used to be an engineer. Sometimes the amount of time you will spend just on fixing a little gnarly bug or gnarly problem or something that you didn't know, so you had to learn before you could really code or anything like that. Now it's kind of solved and you can just focus on really the complex problem and really thinking about how are you going to architect a special service, how are you going to make them talk to each other and all these kind of things. So that has been a big differentiator. We're also focusing a lot on building AI tools for customers. So we made some demonstration of that. We have a vibe trading tool. We have an assistant that gives you information about your portfolio. All of this is pretty unique to Robinhood because we have all this data that we have about your portfolio, about your risk appetite, about your, what you've been doing historically. And I think we'll be able to do something that is pretty unique. I don't know if you saw the event in November, but we were really able to customize the type of response based on the customer. And so when we were asking, if you're asking to the assistant, am I too heavy on one specific type of product or what will you do for XYZ situation? Having this kind of personalized answer is pretty unique. And on our side, on the crypto side, we're also focusing a lot on our API. We have a crypto API that you can use and you can basically query and build anything that you want around it. I was playing this weekend over creating a small trading bot with cloud and using our API and it was pretty incredible. I think in maybe 45 minutes I had something up and running and then I could say to the agent to keep optimizing the trading bot. And so at the end of the day I had something pretty sophisticated that was directly querying the Robinhood API to trade on crypto. And I think that's the kind of thing that we are going to see more and more is agents that are going to take over kind of the basic tasks that you're looking at and being able to execute it for you and making it better and making you think about your, you know, your portfolio and your investment a bit more.
- [28:05]
Host Brendan
So I guess in line with what you just said, it sounded like you were saying that you created a, you know, trading algorithm or trading bot through Claude and then you were able to integrate that into your Robinhood account. Is that true?
- [28:21]
Johan Krat
Yeah. For the crypto side, we have an API that we built. We've never talked too much about it, so it's not the most used product. But if you go on docs.robino.com, you will see all the details to create your own API key, you will see all the endpoint that you can use to place orders, look at your history, all these kind of things. So it's something that we think is more and more important because I think that's where the world is going for some advanced trader. They will want to have more of this algo working for them, basically.
- [28:54]
Host Brendan
So that's fascinating. So I mean, it seems like people could create more complex strategies of accumulation as opposed to just a simple dollar cost average where it's like, oh, every single day I'll buy or every single week I'll buy a little bitcoin. Like everyone knows that. But I think that there can be a bit more nuance to it where it can say, hey, every time there is, every day that we're beneath the 200 day moving average, or every day that the RSI is extended below a 30, I want to be buy. I mean, is it possible to make more complex triggers like that into like consistent buying opportunities?
- [29:30]
Johan Krat
I mean, that was a beauty for me of using cloud. It was just like, I'm not necessarily the most sophisticated trader, but I was actually able to create all these different strategies. Right before launching the bots, he will do an analysis to understand if it's in a bear market or in a bull market. Every hour it will just reset to make sure that the analysis is still good. And there is so much more you could build. I haven't done it, but you could connect to X and connect to news and understand a bit more what's going in the world. But I think for us what's very important is having this foundational layer where once the bot or once the customer wants to make a decision, they are able to actually place the order through the API. And so Claude has a way to do it, or Claude or whatever algo you're using. But I think just the time that it took me to do that compared to the first time I did that back in 2017 or something when I was doing arbitrage between different platform, it took me maybe a tenth of the time, if even. And the, the result is so much more sophisticated than it used to be.
- [30:45]
Host Brendan
That is fascinating because we're in a world where everyone's talking about agents and AI and how they can help us. And I like that there's some effort here to kind of lean into that and say, hey, you know, let's, let's see what these things can do. So I'm interested. You know, we have two guys on the team, two analysts that are just so in the weeds on that. And sometimes they're trying to talk to me about it and it goes over my head, and other times I'm like, it's almost unbelievable that we've gotten to a point where you can do some of these things. So if you're listening out there, pay attention to what's happening with AI. I think it's scaling faster and it's, it's growing and maturing faster than a lot of people expected. And you can almost have, like you said, this agent, this partner that can work alongside you, knows you best, and is able to just help you with basic menial tasks or, or other things in a very just, I don't know, like, consistent robotic way, which I think is useful because a lot of error tends to come through, like human decisions, especially in the financial markets. So, yeah, I mean, if you're a listener out there, continue to keep an eye out on that. I want to go back to a talking point that we had a little bit earlier, which was on the tokenized stock setting, because the world token, the word tokenization, the whole idea of it, real world assets, this stuff is thrown around weekly on our shows and in our communities. Everyone loves to do it. You know, they always like to use the example, oh, Larry thinks, talking about how there can be trillions of dollars in tokenized market cap. And, you know, different people in politics are talking about it and banks and asset managers and all these other things. But you all are. Have been like one of the primary drivers saying, hey, we're actually going to launch thousands of tokenized stocks, which is primarily across Europe now. So my question was, can you just walk us through maybe how that's gone so far and what that looks like?
- [32:39]
Johan Krat
Yeah, I mean, we've Been having a lot of demand on expanding the number of stocks. I think a lot of people were actually excited about starting to use it and got frustrated by the fact that we only had two online at the beginning. So that was a lot of our focus. And I think that's the beauty of the tokenization system is we built this engine that could actually work for any type of assets. And that I think is pretty unique when you think about the way that financial instruments were built back in the days. And really for US public stocks in the eu, we're kind of like the step zero of the vision that we have. So we want to expand to way more than just the US markets. We want to be able to make it connecting to any type of exchange in the future. Because one of the big issues that you're still seeing is that it's very simple to connect to one or two exchanges, but then it's very hard when you want to get access to a lot more. So for example, as an American, if you want to buy on the London exchange or on the Singapore exchange, it's hard and difficult. And same thing in other countries where if you actually want to get access to U.S. stocks or to European stocks, it's very difficult. And so I think tokenization is kind of the beauty here. We can have this layer that will make accessible all these type of assets and then no matter where you are, you just need a self custody wallet and you can trade and you can hold this asset. You will still get the dividend proceed. You will still get what happened after corporate action. So it just once again removes the barriers to entry and increase the accessibility and therefore the liquidity in the market. But the same system can be used for anything else. We could see a world where real estate is tokenized. The agent that you're building with Claude is tokenized because it's very good or whatever. There is really unlimited possibility. And I think that's really what we get excited about because right now it's just like the first step. And yeah, to your point, it's just in the EU we are working into opening these assets more and more. And I think you will see a lot of these competitors that you were mentioning building more and more on top of it because it's just going to be so much more efficient and reduce the cost for everybody that at some point it will just not make sense for you to not use tokenization to trade
- [35:16]
Brendan
just to jump in. Brennan. I wanted to see how far down the rabbit hole you could take us with where you think the tokenization could go because again, you're rolling out credit cards. I went down and went through your mortgage application process, which again, was a partnership with the, you know, it wasn't the Robin Hood mortgage firm you're partnering. But like, is that, is that something that's tied into your roadmap and maybe you can't speak on it, but is that what you're looking for? Of like, hey, if we can get people partnered with their mortgages and bring it on chain, can we do car loans and bring it on chain, can we bring credit cards and bring it. Is that, Is that where the puck might be going? Is that something you guys are thinking about?
- [35:51]
Johan Krat
Yeah, definitely. The idea is to do a lot more. And I think it's not necessarily like we want to offer mortgage on chain or something like that. But for example, using your asset as collateral is going to become more and more easier if you go on chain. For example, if you try to get a mortgage with just a little bit or a small loan with just a little bit of collateral, that is, I don't know, your stock on your portfolio, it's often fairly difficult. They take an aircraft, there's a lot of rules. But on chain, you can actually do a lot of this pretty easily. Currently, right now, it's more for crypto assets than for anything. But you can see this world where tokenized assets are going to be a lot more easy to pledge against, to borrow against, to have as collateral. And I think that's going to be frankly, like a game changer for how all the system works, because you will remove a lot, like everything is a smart contract, right? So you will be able to remove a lot of the work that is happening when you apply for a mortgage or for a loan, you will be able to do underwriting a lot faster because you will have access to all these stories through the blockchain of this specific wallet or customer. So things should actually be optimized. The cost should be smaller. And I think that's kind of the beauty of it. And in a world where it works for US stocks and etf, I don't see why it wouldn't work for the piece of art that you have behind you or for the car that you have in your garage. All these type of assets should be able to be tokenized and used more and more in the defi world.
- [37:37]
Host Brendan
I think one of the misunderstandings that people have about tokenization is they go, well, why do I need to use it? Why can't I just go and do it Normally when in reality it's not quite as simple as that. You know, going back to the stock analogy, right, For a lot of those people that are in Europe, they can't just go and buy and get exposure to U.S. stocks. You know, maybe in the States, it's a little bit easier to obviously get access to US Stocks, but even global stocks, if you're in the US it's is you get a lot of access through different ETFs and different products. But to the rest of the world, the rest of the global financial system, it's not as easy. And so for a lot of the people in Europe, if they want to go and get, you know, exposure to US Stocks, it's not as easy, especially like individual pieces. And so what this does is this is saying, hey, previously this was difficult, maybe not even possible, and now all of a sudden it's possible, which I think does a lot of things. I would argue again that that increases liquidity, that brings new capital in. You create a whole new addressable market of people who previous probably would have wanted exposure. If you look at the last couple of decades, like the US Stock market and financial system is like the golden bar. That's what people want to be invested in. It's the largest in the world. It sets the standard for everything else. It's where a lot of the big growth and tech companies and infrastructure companies just are. And I think tokenization does that. It's saying, how can we give people who have had no opportunity or very limited opportunity to do this, and now we're creating a way for them to have exposure. And I think tiva to your point, there's a lot of other areas that this can go into and we'll continue to see different forms of it. And I'm excited about it. And we'll have to just continue to track. Is there any date, I don't know if you're allowed to say this. Is there any date as to like, maybe when we can expect to get access to that in the US or maybe when different parts of other continents can get access?
- [39:36]
Johan Krat
Yeah, no dates right now. We're just working pretty hard on it. And that's one of our top priority at this point. And I think to your point, you were absolutely right. I think I could even add more, like, for example, the 247 aspect. If you think about Europe, it's already six hours from New York or nine hours from California. It's pretty hard to be active on the entire market when you're at dinner or something like that. You also have the questions of weekends tokenization. Bring you this 24. 7 trading aspect and look at all the things that happens on weekend, even last weekend that has an impact on the market. So why should you not be able to trade it? I think that's where tokenization is really going to change things. And then to your point on accessibility like 100% the amount of countries that is still very difficult to open a brokerage account to fund the account because they don't necessarily have the same payment method that the platform is using. All of this can be simplified with what we are building.
- [40:44]
Host Brendan
I am curious, how is the trading on weekends thing going to work? It's funny, I just had a buddy who was talking to me and they go how do they make this possible? And I said, you know, I asked myself the same question when you all started adding 24 hour trading during the weeks. And I was like, you can trade in the middle of the night but the stock exchanges are closed. Like that's after the after hours and it's before the morning hours. Like how is that possible? And I was like I don't know. That's probably a good question to, to talk to them about. Is the backbones of this, you know, for 24, not even 24. 5 but 24. 7 trading, which is what you all are pushing for. Is the backbones of that built through tokenization or is the backbone of that just like a different form of financial tech?
- [41:28]
Johan Krat
Well, so what we are building on tokenize is using blockchain technology for 24. 5 that we have in the US it's not currently using blockchain and it's just we have this large distribution. We have all these market makers that are working with us and so we're able to do that through an ATS. But I think for 24. 7 it's going to be same question. Initially it's going to be just a few liquidity providers and customers using it. But slowly it's going to become more and more the norm and become more and more important for every day. And so if you are in the market you will have to kind of adapt and start also utilizing the technology over the weekend. And I think that's why we launch our stock token product in three phases. Some of our competitor went straight to defi. We wanted to have these different faces to make sure that we would have enough of our liquidity and demand on the platform. Two, we were working to have Bitstamp to support 24. Seven the trading of stocks and three, we wanted to open defi. So for us, it was really this idea of creating these three milestones to really make sure that we could roll out the product safely and that when we will have it online, basically people will be able to utilize it and not have to worry about what will happen during the weekends. But that's one of the things that I'm very excited about. I think what you're hearing from some folks that are saying, like, why would I use tokenized asset versus xyz? It's because we don't have yet all the benefits of the crypto technology on these assets. But I think once it's going to become more and more obvious that you will have to use it, otherwise you are at a disadvantage. Almost. One other example that I always laugh when you try to transfer from one brokerage in the US to another one. This insane process takes days. You don't really know what's happening. You hope that it works. It's kind of this weird situation. Imagine this using crypto, right? You can see the blockchain transfer. You can see what's happening on the chain. It will take maybe a minute, if even. That's the kind of world that we are used to. For almost everything else for payments, you just stop your phone. You don't wait like 10 minutes or whatever. And so I think people are just going to want that in the future. For also, all their financial instruments, including stocks, including ETF and, and their funds and et cetera.
- [44:13]
Host Brendan
Well, a big backbone of a lot of the stuff that we've talked about and something that I've been tracking lately in regards to all of this is the Robinhood chain, right? We were just talking about this right before we began. Man, you guys are up to 14 million transactions, I think 1.8 million contracts deployed. I mean, what can you tell us about this?
- [44:37]
Johan Krat
Yeah, we are super excited. I think for us, what we thought that this chain will be is. Is a backbone to kind of launch all these products that we wanted to launch and put more and more of Robinhood on this chain so that we can get all these benefits that we just Talked about around 247 and instant settlement and all these things. So we just launched the chain in Hong Kong at consensus, and that was what, like two, two or three weeks ago. And so being able to see this level of adoption so far has been really cool. So we, we put some of our stock tokens on it so that people can start testing it and seeing how it works. And we've seen a bunch of projects that have been created that we don't have any affiliation with. We didn't even sponsor or anything. It's just people sending me on Twitter their link or through email. And it's been really fun to see what people are building with it. And I think this idea of a chain that is going to be dedicated to financial system is actually resonating with people very well. So that's been really cool. And yeah, if anyone listening wants to build on the chain, the documentation is online, it's very simple to access it. And we're also doing a hackathon with Arbitrum where we are putting a price of 1 million. So a lot of things to build. I think it's just the beginning for us, but it's a very, very exciting beginning. And what I'm the most excited about is when we're going to be able to talk about all the features that we are building on top of the chain that people will be able to access.
- [46:13]
Host Brendan
That's, I think, what we're all really interested about. I want to squeeze as much out of you as I can, but I certainly don't want to get you in trouble because we need to have you back on when that stuff does come out. So there's going to be a healthy balance of push and pull here. But kind of in regards to this rolling on the themes of new products, new innovations, one of the big ones that stood out to us over here, Again, me and TiVo were avid users, but one of the big ones was rvi. And I'm not sure how much you can talk into this. It's a little bit maybe outside the theme of crypto, but it seems really innovative because for people who aren't familiar with the new RVI product, it is essentially allowing people to get access to private companies without being an accredited investor, which is fascinating. And so what it is is it's like a portfolio or an index of a bunch of different private companies. I think it's like close to 10 or something like that. And you can go and you can get access to this as if you're trading a stock or you're just trading shares of this thing. But again, it's filled up with privately traded companies like Databricks was one, and there's a handful of others that were inside of there. What can you talk to us about this? Because people have theorized, again, going back to tokenization, people have theorized that hey, we can actually get exposure to or to privately traded companies through, to, through tokenization. And this seems like it's kind of the first step towards that actually becoming a reality.
- [47:52]
Johan Krat
Yeah, that was kind of the idea. We think private equity is extremely important. We think it's one of these like big differentiator between type of people. Basically if you're high net worth or ultra high net worth, you can get access to some of these deals. And even then it's complicated. You need to know the people and all these things. But at least you don't have this accredited investor limit. As long as you make 200k a year or you have 1 million net worth, you have access to it. But for the rest of the population, which is a very, very large percentage, they actually can. Even, even if they had access, they can't even invest in it even if they know the risk that they are taking. And so we always thought it was really unfair. These companies are usually getting success because of the usage of all these people and all these customers, but they are not able to ride the wave with the company and they just have to wait for the company to go public. And nowadays company takes more and more time before going public because it's easier to raise capital on private market. So it's really something that we think that if we really want to change the way people are investing and if we really want to make it accessible to everybody, we need to remove some of these barriers. We do think tokenization is one way to do it, but there is still this accredited investor limit. And so there are still some work for us to do on the crypto side. But the Robinhood Venture product I think is extremely interesting and I think for us it's one more step into this idea of democratizing finance for all. And hopefully we can do more on the crypto side pretty soon as well.
- [49:48]
Brendan
And it's part of the fun of being in the space of crypto. It moves so fast. But specifically of Robinhood, you guys are always pushing the limits and rolling out these new things. And one of the things for the crypto specific community and what we do is we have a safe exchanges list and we're always trying to keep track of, you know, hey, where can you go? And you know, whether you want to offload it to a cold storage or keep it on exchange and monitoring that you guys are always kind of rolling out new options and new cryptos all the time. And to us, I guess, you know, to us when we see a tweet go live from Robin Hood, it's like, hey, it seems kind of random, like, okay, today, you know, this is available. Dog with hats available. And then can Network's available today and obviously it's not random to you guys. So just interested, what's the process? Is it more of relationships with the teams? Is it hype, is it market cap or a little bit of all? What goes into you guys deciding and rolling out different tokens?
- [50:42]
Johan Krat
Yeah, we have a pretty long listing framework and so we have multiple teams that meet and discuss and analyze every single token that we launch. So there is analysis around security, the technology side, you know, how can we. Custody compliance and legal obviously are spending some time on IT operation as well. We want to make sure that we have enough liquidity and support from market makers to support the demand and making sure the spreads are not too wide. All these kind of things kind of are part of the decision process. And then some of the point you mentioned as well, like you know, the demand that we're getting from our customers, the demand that we're seeing online, like what are the volume, market cap, like these kind of things. And it just takes a bit of time to be honest to list some of these assets. And so we have this regular cadence now. We've done a lot of work internally to make sure that we can support assets in a faster way because it's still one of the top requests that we get from our customers to get access to more type of crypto. And so when we list a crypto there's a lot more work coming into it. There is all the anti money laundering checks that we do during transfers. We want a customer to be able to transfer to their cold storage for some of these assets we want to offer staking. So any new listing takes some time and that's kind of what's happening in general.
- [52:13]
Host Brendan
Yeah, I mean there's just so much going on, it's hard to capture all of it at the end of the day, no matter which way you look at it. I mean there truly is a million things, especially when you're dealing in pretty much all areas of finances at this point, because you can trade cryptos, you can trade metals, you can trade options and leverage and you can short now and you can go long. And there's so many different things to kind of keep track of, which makes it, I guess somewhat difficult to keep up with. But you know, one of the things that we were going through was just following, I guess, how crypto has ballooned because there's all these new products and it's been such a big push. One of the things I did notice was that the year over year crypto revenue fell by about 30% or 38% from Q4 of 2024 to Q4 of 2025. And you know, I think it's a little bit hard for me to digest because I'm someone who's been advocating that there has been a strong disconnect from the fundamentals and the technical meaning that it seems as if the fundamentals have gotten so much better. You know, whether you're looking at it from regulations and how many crypto companies are getting in trouble with the SEC or what's actually even built, or the amount of active users, or all these other metrics like total growth. And I, I feel as if there's this disconnection between the massive leap that we have taken forward and where we're at right now, because a lot of cryptos have fallen into places that they were maybe years ago, despite how much progress has actually been made. And I would loop Robinhood right in there with that, where I just again feel that there's a disconnect between how much has been accomplished and what we've seen in terms of depreciation over the last several months or so. What maybe contributed this like the most, like what contributed the most to this and why did it happen? And I guess how do you plan on growing, getting it back from maybe a 38% year over year drop?
- [54:15]
Johan Krat
Well, the micro environment is really what happened. When we look at our market share, we still feel very good about opposition. We don't feel like it's something specific to Robinhood. And that's really what we worry about. I think at the end of the day, if customer are excited about another type of asset or if they want to step back from the market for a bit, that's something they can decide. But our CFO actually told yesterday that we've seen uptick in February in terms of volume compared to January. So we are seeing a bit of a rebound. And overall for us, what I was saying at the very beginning of the interview was what we focus on is building and making sure that we have all the tools that people are looking for in the market. The actual volume number, it's less something that we can control because at the end of the day, the macros are the macros. But I think as a builder within the space, what we are focusing on more is bringing utility to the space. I think tokenized assets, for example, is something that can really change the way that crypto is being used. And when you will see that actually happening, I think you will see also some of these assets coming back up.
- [55:33]
Brendan
Yeah, we we totally agree because again, we've been saying it, what on the rundown. The macro, the macro, the macro. So we totally agree with you. I will, I will say one point depending on how much you can say, because you guys have rolled out the prediction markets and we've been really ahead of the game, our team, you know, especially with Brian and Joe calling like prediction market super cycle almost a year ago at this point. Is there any, is there any correlation that you see from the crypto to the prediction markets of that, you know, that high risk individual that likes to, you know, maybe take, take some. Whether it's for fun, the prediction markets, you know, whether it's sports or something more serious like elections and what's going on in the macro environment. Is there any correlation there for volume that you see?
- [56:13]
Johan Krat
No, at this point we haven't seen any cannibalization like people stopping trading crypto because they want to trade something else on prediction market or, or anything like that. What we actually see is people using multiple of the instruments at the same time for enabling the strategy. So we see people buying futures or buying prediction market and also buying spot. And I think prediction market overall is an amazing product. I think a lot of people are actually getting more comfortable into some of their investment strategy because before they will have to pick a specific asset or pick a specific stock. With prediction market, it gives them more option to actually realize our strategy. So let's say you want to invest in AI. Instead of trying to pick one of the AI companies that are very linked to it, they can just use a contract on prediction market about AI. And I think that's making it a lot easier for some people to invest. And overall on crypto we still see our customer actually engaged and I think overall we, our user are net buy on Bitcoin. So it's something that really shows you that it's something that we shouldn't spend too much time on and we should be more focusing on the tool that we are building for the customers.
- [57:38]
Host Brendan
The prediction market shocked me. I mean, the ability to spin up a business that is doing hundreds of millions in revenue, billions of dollars, I think it's something like almost $10 billion in total contract volume or something. And the ability to spin this up in what feels like maybe a year or so, I'm not sure if I'm spot on with that number, but I mean, the ability to spin that up is crazy. I mean, I mean, I'm having a hard time even putting words to it because it ballooned so fast. And prediction Markets have been around and they've been growing, but just how well I think it was integrated, right? And I've seen mixed responses online of some people saying, oh, you shouldn't mix this with the brokerage account or this and that. But I just don't understand why not. I think the more of you could, that you can have an all in one platform for everything. I think the more it benefits people. That feels like the old days, like when you first got an iPhone and there was a different little app or feature for everything. And then it was like, what in the same thing with like the Internet, it's like, why are we doing all this? Why do I have to go to a different website to buy diapers? Why do I have to go to a different website to buy clothes? Why do I have to go to a different website to buy tech parts? Why do I have to go to a different website to buy furniture? You know, why can't we just do a lot of our different aspects of life all in one place, whether it's shopping or investments or whatever it is. And I just think that it makes sense because there's again, yeah, the more you kind of collect it all together, I think the more convenient it makes it for people, especially when it's in a much more like regulated, compliant way. Because the odds are if someone wants to do it, they're going to do it, right? If someone wants to gamble, they're going to go to a casino, they're going to put on a vpn, they're going to go to some sketchy offshore place. You know, it's not going to stop anyone. If someone wants to go gamble or do things, they're going to do it in one way or another. So I don't know. I mean, I'm all for it. And the prediction markets are cool. I like how they have evolved. I think that they need probably a little bit more regulation in the sense that if you could stop some of the insider betting and trading on that, I think it would be in a really good spot.
- [59:46]
Brendan
But even just from information gathering, you know, that's something that we focus on on our weekly episodes of like, hey, let's see what people are, you know, where's the money going? It's a lot easier to have a news headline versus where are people putting their actual money for bigger events. But we're on top of the hour here, Johan, so we want to leave you with one final thought of, you know, your, your crypto at Robinhood and where you guys are going before we Wrap here. We do appreciate your time. So final thought from you.
- [60:14]
Johan Krat
No, you know, just on the prediction market, you're totally right. It's one of our fastest growing business. And and I think to your point, like we, we are doing a lot of work to list specific contracts and make sure that we don't list some of these contracts are being a bit more abused on some of the DEFI platform. And I think for us really the excitement is around this idea of this super app where you can have all your financial instruments in one place and where you can benefit from the UX and UIs that we've been polishing for a decade plus more. And yeah, on the crypto side, really excited about everything that we are building this year. I think it's just the start of the year, we're barely at the beginning of March and we have so much more to ship. So we are excited and hopefully we can talk about some of this new feature next time we're here.
- [61:04]
Host Brendan
We're definitely going to have to. It sounds like there's a lot in the works here and I think the best really is yet to come and whether that's maybe waiting for the market conditions to get better, which I think we all believe that it's just a matter of time until conditions do get better. We go through ups and downs. It's normal, you know, everything tends to get affected when everything goes up and everything also gets affected when it goes down. Guys, it's just a normal part of the financial markets and crypto is no exception to that. It's the same thing, you know, whether there's going to be new products coming, whether there's going to be the Clarity act, you name it. There's all sorts of other things in the pipeline to talk about. So, Johan, we really appreciate your time. Where can people get involved if they want to follow you or Robinhood or anything? Where are the best places to do that?
- [61:48]
Johan Krat
Yeah, X is a great place. You can find me with my name and you will see all the news we are launching and feel free to reach out out anything around the chain as well. We are working with a lot of developers, so if there's anything you want to build on the chain, don't hesitate to reach out.
- [62:05]
Host Brendan
Awesome. Well, once again thank you for joining us. We appreciate your time and that's going to bring us to a wrap on this episode. Everyone, thank you all for joining this week's episode of the Crypto 101 podcast. And we'll see all of you at the same time. Same place next week. Take care of.
- [62:32]
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