Podcast Summary: "Spend Fiat, Earn Bitcoin Rewards with the Fold Credit Card | Will Reeves"

Episode Release Date: February 12, 2025
Podcast: THE Bitcoin Podcast
Host: Walker America
Guest: Will Reeves, CEO of Fold

Introduction

In this episode of THE Bitcoin Podcast, host Walker America engages in an in-depth conversation with Will Reeves, the CEO of Fold, a prominent player in the Bitcoin financial services sector. The focal point of their discussion revolves around Fold's latest innovation—the Bitcoin rewards credit card—and its potential to revolutionize the credit card rewards landscape by leveraging Bitcoin's unique value proposition.

Unveiling Fold's Bitcoin Rewards Credit Card

Will Reeves opens the discussion by expressing his enthusiasm for Fold's new product:

Will Reeves [00:00]: "I truly think the Bitcoin rewards credit card will be a top three bitcoin product of all time. And that's only behind the Bitcoin Exchange and the Bitcoin ETF."

Reeves emphasizes that the credit card serves as a pivotal tool for Bitcoin enthusiasts, aligning incentives by allowing users to spend fiat money while earning Bitcoin—the "hardest money available." This alignment is rooted in Gresham's Law, where "bad money drives out good," making it advantageous for users to earn Bitcoin rewards while engaging in regular spending.

Fold's existing customer base exhibits high engagement with Bitcoin products, with 95% holding a credit card. The introduction of the Bitcoin rewards credit card is portrayed as the "missing piece" in Fold's suite of financial tools, designed to maximize Bitcoin exposure and accumulation while maintaining users' connectivity to everyday financial activities.

Critique of Traditional Credit Card Rewards: The Airline Miles Phenomenon

A significant portion of the conversation delves into the shortcomings of traditional credit card rewards, particularly focusing on airline miles. Walker provides a critical analysis of why airline miles have become the default rewards mechanism, questioning their inherent value and sustainability:

Walker [05:27]: "They can just create them. They can change the exchange rate whenever they want. Like they, they're actually kind of a scam."

Will Reeves responds by providing a historical perspective on how airline miles transformed the credit card industry:

Will Reeves [06:08]: "At some point the airline miles completely re-energized the credit card industry and in a big way has become like a cultural phenomenon... There are over 30 trillion unredeemed airline miles out there."

Reeves highlights the perpetual devaluation of airline miles, noting that major airlines are now under scrutiny for devaluing rewards and consumers' dependence on these programs as integral parts of their savings. This devaluation is contrasted with Fold's Bitcoin rewards, which have appreciated in value by 60-70% year over year, offering a sustainable and appreciating reward mechanism.

Fold's Strategic Positioning and Market Opportunity

Reeves articulates Fold's ambition to "dethrone US Airline miles" by positioning Bitcoin rewards as a superior alternative. He underscores that with the current devaluation trends in traditional rewards systems, Bitcoin is poised to become the household preferred consumer reward due to its scarcity and potential for value appreciation.

Walker's probing questions further explore Fold's target market and its strategy to appeal not just to hardcore Bitcoiners but to a broader audience seeking better financial incentives:

Walker [10:01]: "Are you guys really also, you know, this isn't just a product for people who are already hardcore bitcoiners...?"

Will Reeves affirms that Fold aims to "do some orange pilling"—a term in the Bitcoin community referring to converting skeptics to Bitcoin believers—by offering a credit card that appeals to both existing Bitcoin enthusiasts and newcomers looking for superior rewards.

Product Details: How Fold's Bitcoin Rewards Credit Card Stands Out

The discussion transitions to the specifics of Fold's credit card offerings. Will Reeves outlines the straightforward and competitive rewards structure:

Will Reeves [15:15]: "It's a straight 2% unlimited rewards on all purchases...fold plus member, so that's a premium subscriber...2% unlimited."

Key features include:

• 2% Unlimited Bitcoin Rewards: Available to premium subscribers (Fold Plus members), ensuring competitiveness with other market offerings.

• Spotlight Categories: Enhanced rewards in partnership with major merchants like Amazon, Uber, and Starbucks.

• Welcome Bonuses: Users can earn up to $250 in Bitcoin through various activities such as Bitcoin purchases, paycheck conversions, and spending on the debit card.

• Metal Card: A premium, tangible representation of status comparable to those associated with traditional airline miles.

Reeves emphasizes the simplicity and maximization of value as central tenets of the credit card, aiming to provide a seamless transition for users from traditional rewards to Bitcoin-backed rewards without sacrificing reward percentages.

Fold's Business Model and Sustainability

Walker delves into the backend mechanics of Fold's operations, seeking clarity on how Fold sustains its Bitcoin rewards system. Will Reeves provides an insightful explanation:

Will Reeves [17:45]: "Fold is a 24/7 buyer of Bitcoin... We've given away $70 million worth of Bitcoin to our customer base on Fold."

Fold's strategy involves leveraging its partnership with Visa, which compensates them for each transaction. This revenue is predominantly funneled into purchasing Bitcoin in real-time, ensuring that Fold can "match liability" and maintain a surplus of Bitcoin relative to their obligations to customers.

For the credit card, Fold anticipates even higher returns from Visa:

Will Reeves [19:51]: "Visa is going to pay us every time you swipe that card about two times more than they do with our debit card. And we pass that almost 100% on to our customers..."

This model positions Fold not only as a rewards provider but as a cornerstone in its customers' wealth accumulation strategies, allowing users to earn Bitcoin while leveraging fiat credit—effectively "spending someone else's dollar" to build personal Bitcoin holdings.

Fold's Evolution and Future Plans

The conversation shifts toward Fold's broader vision and future offerings, especially in light of its impending transition to a publicly traded company. Will Reeves elaborates on Fold's mission to be a comprehensive financial services provider centered around Bitcoin:

Will Reeves [21:39]: "Fold is really just following our customers because these customers represent what I believe is the future... Fold is really always just following our customers because these customers represent what I believe is the future."

Fold aims to address the multifaceted needs of Bitcoin savers, extending beyond savings to include:

• Bitcoin Custody: Allowing users to securely store their Bitcoin alongside their Fold accounts.

• Bitcoin Paycheck Conversion: Enabling seamless conversion of fiat paychecks into Bitcoin, integrated with users' savings.

• Credit Services: Introducing credit products that allow users to leverage their Bitcoin holdings without the traditional risks associated with collateralized loans.

Reeves envisions Fold evolving into a "full-service financial institution" where Bitcoin is not just a savings tool but a central element in daily financial operations, encompassing spending, saving, and credit.

Redefining Credit and Loans with Bitcoin

A significant portion of the discussion focuses on Fold's innovative approach to credit and lending, departing from traditional models that often involve restrictive collateral requirements and volatile market dependencies. Will Reeves introduces Fold's vision for unsecured credit lines backed by Bitcoin's inherent value:

Will Reeves [31:54]: "The credit card represents the first step... an unsecured line of credit... without risking liquidation and high interest rates."

Fold's strategy includes:

• Unsecured Loans: Allowing users to access credit without pledging Bitcoin as collateral, thereby eliminating the risks of margin calls and liquidations.

• Redefining Creditworthiness: Utilizing Bitcoin holdings as a metric for assessing creditworthiness, potentially replacing archaic credit scores that rely heavily on debt accumulation.

• Long-Term Lending: Crafting loan products that align with Bitcoin's long-term value appreciation, fostering sustained relationships between lenders and borrowers.

Reeves underscores that Fold's approach is designed to "change the dynamic between lenders and borrowers", creating a mutually beneficial ecosystem that contrasts sharply with the zero-sum nature of traditional lending practices.

Fold's Bitcoin Treasury and Public Market Presence

As Fold prepares to enter the public market via a SPAC (Special Purpose Acquisition Company), Reeves discusses the strategic importance of maintaining a robust Bitcoin treasury:

Will Reeves [46:58]: "Fold today has a thousand [Bitcoin]. That puts us out of the top 25 Bitcoin treasuries in the world..."

Fold's Bitcoin holdings serve multiple purposes:

• Alignment with Customers: By holding significant Bitcoin reserves, Fold ensures that its business interests are directly aligned with those of its customers.

• Financial Sustainability: A substantial Bitcoin treasury acts as a buffer and a growth asset, enabling Fold to "accumulate Bitcoin very efficiently" through business operations.

• Public Market Strategy: Transitioning to a public company with a Bitcoin treasury positions Fold uniquely in the market, allowing it to navigate public funding while adhering to its Bitcoin-centric ethos.

Reeves also touches upon the SPAC partnership with Betsy Cohen, a pioneer in digital financial services, highlighting the strategic fit given Cohen's understanding and support of Bitcoin's transformative potential.

Impact on the Broader Financial Landscape

Will Reeves envisions Fold as a model for future banking institutions, emphasizing how Bitcoin fundamentally alters the value exchange between customers and banks:

Will Reeves [43:06]: "Fold represents what a bank will look like... It's Bitcoin fundamentally changes the value exchange between customers and the bank."

Key transformative aspects include:

• Long-Term Relationship Building: Unlike traditional banks that focus on short-term gains and quarterly results, Fold prioritizes long-term wealth accumulation for its customers.

• Alignment of Interests: Fold's mission to "build the wealth of its customers" ensures that its success is interlinked with the financial prosperity of its user base.

• Alternative to Traditional Financial Systems: By offering sustained growth through Bitcoin, Fold provides an alternative to the debasement often seen in fiat-based financial systems.

Reeves suggests that as folded Bitcoin treasuries and customer relationships strengthen, incumbents like JP Morgan Chase will be compelled to adopt Bitcoin strategies, potentially leading to a seismic shift in the financial sector's landscape.

Bitcoin Adoption Cycle and Future Outlook

The dialogue also explores where the Bitcoin adoption cycle currently stands and Fold's role in driving further mainstream acceptance:

Will Reeves [60:50]: "Once the funnel is done, that's when you're going to get an inevitable pop of supply that's going to happen."

Reeves outlines the current phase as one dominated by ETF-related Bitcoin purchases rather than direct retail adoption. However, Fold anticipates that as financial products like their Bitcoin rewards credit card become more accessible, they will catalyze broader retail participation. This increased demand is expected to drive significant Bitcoin price appreciation once sell pressure from long-term holders diminishes.

Conclusion: A Compelling Case for Fold's Bitcoin Rewards Credit Card

As the conversation wraps up, Will Reeves provides a compelling pitch for Fold's credit card, emphasizing its ability to replace devaluing reward systems with a sustainable, appreciating Bitcoin reward structure:

Will Reeves [66:04]: "You can exchange that for something that cannot be debased. That is yours gives you a passive way to earn."

Walker reiterates the appeal, highlighting how the credit card offers not just financial rewards but also a gateway into understanding and embracing Bitcoin's foundational principles.

Key Takeaways

1. Fold's Bitcoin Rewards Credit Card is positioned to disrupt traditional credit card reward systems by offering sustainable, appreciating rewards in Bitcoin, outperforming conventional airline miles.

2. Critique of Airline Miles: Traditional rewards, particularly airline miles, are subject to devaluation and lack inherent value sustainability, making them inferior to Bitcoin-based rewards.

3. Business Model Sustainability: Fold leverages partnerships with Visa and maintains a robust Bitcoin treasury to ensure the sustainability and scalability of its rewards program.

4. Innovative Credit Services: Beyond rewards, Fold aims to redefine credit and lending by offering unsecured, Bitcoin-backed credit lines and exploring new metrics for assessing creditworthiness.

5. Future of Banking: Fold envisions itself as a model for future financial institutions that prioritize long-term wealth accumulation and align closely with Bitcoin's decentralized ethos.

6. Bitcoin Adoption: Fold's products are designed to drive broader Bitcoin adoption, facilitating seamless integration of Bitcoin into everyday financial activities and fostering long-term value appreciation.

Notable Quotes

• Will Reeves [00:00]: "It's pure Gresham's law... you are getting to spend bad money on credit and to earn Bitcoin, the hardest money available."

• Will Reeves [06:08]: "There are over 30 trillion unredeemed airline miles out there... they're consistently devaluing them 20, 50% each year."

• Will Reeves [15:15]: "We want to maximize that value proposition... 2% unlimited rewards on all purchases."

• Will Reeves [31:54]: "This is the first step... an unsecured line of credit... without risking liquidation."

• Will Reeves [46:58]: "Fold today has a thousand [Bitcoin]. That puts us out of the top 25 Bitcoin treasuries in the world."

• Will Reeves [60:50]: "Fold is a financial services company that puts Bitcoin at the center to give our customers an advantage in life."

Final Thoughts

This episode of THE Bitcoin Podcast offers a comprehensive exploration of Fold's innovative approach to integrating Bitcoin into everyday financial tools. Will Reeves articulates a vision where Bitcoin transcends its role as a mere digital asset to become a foundational element in personal finance, from savings and spending to credit and lending. By addressing the inherent flaws in traditional reward systems and presenting a Bitcoin-based alternative that emphasizes sustainability and growth, Fold positions itself as a pioneer in the evolving landscape of Bitcoin financial services.

For listeners interested in transforming their financial strategies and embracing Bitcoin's potential, Fold's Bitcoin rewards credit card represents a compelling opportunity to earn while spending, aligning daily financial activities with long-term wealth accumulation.

Discover Fold's Bitcoin Rewards Credit Card: Interested listeners can sign up for the waitlist here. Join the revolution in Bitcoin-based financial rewards and start maximizing your Bitcoin accumulation today!