← The Wolf Of All Streets
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- [00:00]
A
If you want to understand where crypto is really going next, you listen to people like Bill Barheit. Bill has survived the blow ups, built through the chaos, and now has a front row seat to the shift from speculation to real financial infrastructure. In this conversation we get into bitcoin, macro tokenization, AI regulation, and why the biggest opportunity in crypto may still be ahead.
- [00:22]
B
I've never been more bullish on the infrastructure layer of financial services becoming decentralized. Everything is about to be tokenized. So the custom portfolio construction you do for your clients, it's going to be
- [00:33]
A
all tokens stay until the end. Because this one is packed with insights that could completely change how you see the market from here.
- [00:55]
B
That's dope.
- [00:56]
A
It feels to me like bitcoin has been trading in a relatively tight range while the world just goes like a roller coaster around it. I think a lot of people would have expected, even though they're not happy about the current price area, that we could be much lower based on what's going on right now. I mean, what do you make of it in general?
- [01:15]
B
Yeah, I mean it could also be just a accumulation for capitulation Move to the downside. My algorand is having a, having a moment, which is interesting. I think it's up like 45 in three days. I think it was part of the whole kind of Google post quantum hardening narrative. So deserve it or not, I'll certainly take it. But yeah, I mean you follow the charts closer than I do. I mean I, I wouldn't be surprised if we're accumulating for a capitulation move. I think, I don't see how, I mean, you tell me, but I don't see how they don't print massive amounts of money post Iran.
- [01:57]
A
Yeah, I actually would go even further to say the only reason is there so that we're there so they can print a whole lot more money.
- [02:05]
B
It could be, it could be. I mean look, they've, they've been very clear like their number one goal right now as an administration is to get this, get these interest rates down, which accomplish a whole bunch of things, right? Refinance the debt, pump money into the economy, get it, get unemployment down. And they know that right now if the midterms were tomorrow, their hats would be handed to them and they have five month window, maybe six tops to turn it around. Now, now historically the, you know, the party in power loses in the midterms. It's just how it is, how it's always, always been.
- [02:44]
A
So turns out governing is really, really hard. And screaming insults from the sidelines is really, really easy.
- [02:51]
B
Yeah. And we've never. Well, I shouldn't say never. I mean, we've always been divided as a country. But. But the, the platform. Platforms like this amplify that. Right. So before, you used to have to wait a week to read about how divided we are. Now you just have to look up and it's just there in front of you and. And you can get confirmation bias for every stupid thing. Oh, you think that it's a conspiracy theory that Pam Bondi was Attorney General and basically not prosecuting these people? Well, just look up and there's 17,000 people confirming your bias. Right. Or, you know, you think, you know, Barack Obama's Satan spawn and he's really a Kenyan by birth or something. Well, look up. There's 20,000 people confirming your bias. And you think bitcoin is, you know, some conspiracy theory from the nsa. Well, I guarantee you it's not. But I also guarantee you there's someone on the Internet confirming that bias.
- [03:52]
A
So, yeah, it's impossible to parse what's signal and what's noise at this point. But you kind of allude to the fact that there could be a capitulation event. When I hear a capitulation event, I think, quick, a big move down for a while and then kind of bounces back here and we sit here for six months and then slowly climb the wall of worry back to the upside. Sort of how I'm thinking of it, by the way.
- [04:17]
B
Yeah.
- [04:18]
A
Revisit the low 60s, mid-50s, the area we were in before, but a little lower. Get a whole lot of fear going on, and then time crushes the rest of the people.
- [04:29]
B
Yeah, I'm fully allocated and I'm happy with that. I don't mind. But. But if I wasn't and I had cash, I'd put in, you know, limit orders in the mid-50s just to ride it for sure. And if they got. If they hit, great. If not, it's all good. But. But, yeah, I think that feels right. But, yeah, I mean, I, I. But. But the thing about bitcoin, and who knows, right? First of all, my take is just, you know, have your conviction and then get back to hustling. And so, but, but at the end of the day, it's going to do what it's going to do. But historically, what it's done is it's taken a lot longer to ride the elevator up than it has to ride the elevator down. And so that could easily mean that I would. I still am not surprised if we see new highs this year. But that could easily be December, not, you know, August. Right. But the new highs come very, very quickly after a long sideways chop, and we haven't had the long sideways chop yet. And by the way, a capitulation move to 55k for Bitcoin is not really even a capitulation move. It's like another, what, 7% or something.
- [05:38]
A
It won't even have been a 60% drawdown, I don't think. Like probably high 50s, net from 126, which if this is a true bear market, like previous ones would be basically the shallowest bank bad year we've had or bad.
- [05:50]
B
I don't, I mean, I don't want to be melodramatic about it, but, you know, this is. This is bitcoin volatility compressing and, and people are still losing their minds. I mean, you know, when I say people, it's more. The, the tradfi world that now is basically exposed to Bitcoin through ETFs. That is, is more of the losing their mind camp because they're not used to that. They're certainly not used to the 60%. I can't imagine how they would handle the 80%.
- [06:19]
A
I hear it every day. I hear it every day from my friends who, you know, say, I don't understand how this thing trades. It trades like shit. What are these headlines?
- [06:28]
B
Like shit. Okay, that regard, I guess they do understand because right now it does trade like shit.
- [06:33]
A
Why? You know, like, why is this quantum thing real? You know, like, what's happening with regulation? You know, I thought Donald Trump was pro crypto. What's going on? I get them over and over again. It's actually really an interesting window, though, into how the people who haven't been here a while and maybe have really started paying attention because it's become mainstream, how they think about it, because about quantum. And they do think about all these things because they're good headlines.
- [07:00]
B
I think Trump has a button where he can control the price of bitcoin and he has an up and a down arrow and he just goes like this all day. And for some reason he's just been doing this. The downside for the last six months. So clearly like this. Yeah, exactly. He's like, and what's going to happen? I don't know. Well, I just keep it stuck. Fuck. You know, Scott, get it here. The button stuck. Right? So, you know, that's clearly what's happening
- [07:26]
A
more, though, about your idea that it all leads to more printing. Right. Because I think that I generally do agree with that. I was definitely being hyperbolic when I said that was the only reason that they would go to war. But listen, we have a long history in this country, obviously of, you know, conflict, which leads to stimulus, which leads to, you know, predatory loans, which leads to a lot more interest for the bank, which leads to more stimulus and more liquidity and markets go up and people make money. Right. And so this does seem to at least fit loosely into that pattern, but interestingly conflicts with the idea that they were trying to force the Fed to cut. So it's kind of confusing, I think, for a lot of people.
- [08:04]
B
Yeah, it is. Especially when I don't want to make it all about politics. Unless you want to. But, but, you know, they, they. Their. His core message was no more wars. Right. And so maybe that was an unrealistic message when they've killed, what, 40,000 of their own citizens now. Is it our moral job to be the morality police for the Middle East? I kind of hope not on the one hand, but you can't deny what's happening. And we're playing a massive game of risk. Right. Why have we placed the pieces in Venezuela and Iran?
- [08:39]
A
Oil.
- [08:40]
B
Okay. Makes sense to me. And so if you're playing a massive game of risk, you try to be strategic about it. And I think they are. You know, they're, they're sometimes not good at explaining it to the public, but that doesn't mean that they're always wrong. I mean. But yeah, I think, I think the, the biggest challenge that they have right now is, is that the middle of the country that, that, you know, and I mean, independence, not physically middle, that. That voted for them. The no wars and closed borders really resonated. And that's not what they're getting right now. They're getting the closed borders. Fentanyl, Fentanyl deaths way down. Murdered murders way down, drug prices coming way down, house prices coming way down. But, but the war thing is, you know, says, hey, you're wasting my money on things that should be spent here. And if you're going to print money, print it on things that help me, not somebody I don't know. And that's cold. It's very cold. But Americans are like that when it comes to national elections.
- [09:42]
A
Yeah. So I don't want to go too deeply into the political side. I think we've said our piece, I think, and we can also just, I think, brush off now the geopolitical and macro side of what bitcoin price or crypto prices are doing and focus more on the silver lining and optimistic side of what's actually happening with the industry in the United States because I think you have an exceptional front row seat. I've said this many times on the show, but I don't know if anybody has better perspective. Having survived the attacks of the previous government, having survived the collapse of cefi, having gone through completely unnecessary attacks, come out the other side. And now seemingly with your new announcements, taking full advantage of the opportunity that currently exists. I think you've seen the life cycle as a CEO better than anyone.
- [10:32]
B
I, I hope it's the life cycle, meaning I hope that there's no other horrible, you know, really bad, horrible event. How does the kids book go? It's having a really bad blah, blah, blah, blah, blah, blah day. I think we've seen them all and, and outside of like some, you know, geopolitical, nuclear something or other. So. So, you know, it was obviously, well-70s oil shock that my parents live through, but, but you know, I think we've seen it all as it relates to bitcoin and, and as it relates to these crypto cycles and building companies in those cycles. Like, I thought it, like when I was at Netscape and we had this whole, I don't know if you weren't old enough, but, but there's this whole clipper chip debate about how they were going to read our encrypted messages and everybody thought the sky was falling and how could you build a company in this environment when everybody's trying to read your messages? And like that was the worst we went through. That was literally the worst we went through. We had, we had export issues with the browser because the, the keys were padded. Like I would, that would be a dream if that was my biggest problem in building a company in our space, that I had export issues, right? And at the time I was just like, I would stress over it, like it was horrible. And I was like, how could this be happening? What's wrong with our government? And now it's like, that would be a dream, like if that was my biggest problem. And so, yeah, I don't know. I mean, I, I don't know. I'm bad at that. Bad dad jokes. And so one of my recent favorites is did you ever see the World According to Garp? Movie version of the book. Love. I love, love, love that book and I love the movie. And there's a scene where Robin Williams and his new wife are trying to buy a house and you know, they're they're looking at the house and you hear this. And then, and then the plane crashes into the house. And the guy gets out of the plane in the second floor of the house. He says, can I use your phone? And, and, and Robert Williams turns to the realtor, he says, we'll take the house. And his wife's looking at him like, like, honey, there's, there's an airplane sticking out of the, out of the house. And he says, yeah, but honey, the house has been pre disastered. It can't get any worse. And I feel like that's tradfi coming into our space now. Like we've pre disastered the space now so that they can just pick up the pieces and reap all the benefits of what we've all gone through.
- [13:01]
A
Yeah, okay, so that's. You just said kind of the quiet parts out loud because that's how a lot of people feel, right? Is that we sort of be careful what you wish for. We cheered for institutional adoption. We cheered for the biggest institutions coming in. I still do, by the way. So I'm not saying that that was wrong, but now we see the tokenization of everything and the institutionalization of everything and systems moving onto blockchain rails because of the superior speed and transactions. Then you go, but what about my token man? Because is that investable for all of the people who have been here and believing for the last 10 years? Or did we just hand over the keys so that they could use the technology and the infrastructure to put up walled gardens and take advantage of it themselves?
- [13:47]
B
Here's the irony of what you just said and that I'm living the last three weeks. I think it's been. We announced our going public. I think it's been about what, 20 days maybe. Okay, in those 20 days, I've had more traditional finance firms reach out to me, proactively reach out to me than probably in the last five years combined. Okay? It's credibility. It's fine. It's not like I did anything magical. I mean, that's just what they do, right? So, but in those discussions that I've had so far, and I haven't even gotten to follow up with them all because I've been so busy. But in the discussions I have had so far, I have not had one discussion on price other than, other than related to borrowing against Bitcoin, where the price matters because that affects how much you can borrow. But, but other than that, price isn't, is a non. It's not even a discussion topic. Right. It's it's, you know, we want it. We're interested in employing, deploying defi. We want to understand how to deploy custody for our clients. Like the narrative flip within traditional finance Right now, trying to get their arms around crypto is miraculous. Now, it's not necessarily why I got into Bitcoin in the first place, but who cares? That's my problem, right? So, so, but as it relates to Abra, it's fantastic, right? Because it's validation. It's us saying, hey, we want to service every wealth advisor on the planet who is going to have to rebuild their stack because not only are you going to have to offer crypto, but everything is about to be tokenized. So the custom portfolio construction you do for your clients, it's going to be all tokens. Whether it's Tesla shares or SpaceX shares or Bitcoin or Algorand or Sui, whatever, it's all tokens. And so that's a remarkable mindset shift that's happening in front of our eyes right now. And there's no going back. If you read the Wall Street Journal even once a week, you can't miss it, right? And I'm on text threads with other CEOs, with people from our new business combination. And I'm just getting inbound, inbound after inbound. Did you see this Wall Street Journal, this New York Times, Even from family, they're like, isn't this what you do? You know, like from my mom, she'd be like, don't you do this? And is that good for you? And I'm like, yeah, it's good for me. So just keep it coming, keep it coming. It's all good. And so it's one, there's no going back. Two, it's not about price. And ironically, they're more about why decentralization matters to a degree right now even than the degens, because the degens only care about number go up at the end of the day.
- [16:33]
A
Yeah, I mean, they're actually, they're talking the. We were talking the talk and they're walking the walk to some degree.
- [16:40]
B
Yeah. The biggest exception to that is probably the neo banks that are entrepreneurs. A lot of, you know, I've seen a lot of. My favorite, one of my favorite narratives in kind of startup land, besides the AI narrative, which just consumes everything, which I'm sure we'll talk about. But, but, you know, the neobank narrative, especially on Solana, and I see some of it on SUI now and I'm hoping to get some of it there. In Algorand is, is awesome. You know, I would not build like I've built neobanks. I built one for emerging markets. That's how I got into Bitcoin in the first place. I would never build it the way, now, the way I built it before it would be 100% stablecoin based. I'd be generating yield either for myself or my clients, hopefully my clients or hopefully both actually. And they would have the ability to settle payments in real time, cross border. Right. You wouldn't have like Western Union versus you know, Venmo. It would all be the same thing. And, and that's remarkable. And, and so that's something that we don't hear enough about and there's probably 500 of those startups vying to become an interesting brand and that's awesome because that's going to help people on many levels. It's going to lower the cost, it's going to make new types of transactions possible and it leads to the AI narrative which is a wallet for every agent. And I can tell you from an algorithm perspective it's number one topic that everybody wants to talk about is the whole concept of a wallet for every agent. I've adopted this mantra of fast and final to explain. Okay, well there's 10 different ways to do that in crypto and what an agent wants is fast and final, right. It doesn't want rollbacks, it doesn't want chargebacks, doesn't want one hour settlement. It's just, you know, and it doesn't want your crappy dollar losing 10% of its value a year. And, and so it doesn't care. It's just an eight, it's just, it's just computer, you know. Anyway, I, I'm, I've never been more bullish on the infrastructure layer of financial services becoming decentralized, which is why I'm
- [18:47]
A
here, which is so interesting because you never thought that the path through institutions was the path to decentralization. Would have thought that that was being fully centralized.
- [18:57]
B
And I've prided myself, which probably, you know, pride cometh before the fall, right. So, but I have prided myself on my ability to extrapolate Moore's Law and what it's become because Moore's Law is kind of dead. But, but what's next? And you could kind of see that AI was coming, but not the way that it has, which is awesome. Right. And also the way that I think it represents the second coming of crypto by the way. I think that in my AI friend circles there's probably more positivity around crypto than there is in crypto circles because everybody's so bearish right now.
- [19:39]
A
Heard this a few times of late. That exact narrative that all of these people coming in from finance or AI or that Silicon Valley writ large is way more bullish on crypto than crypto is probably true.
- [19:50]
B
I mean, look, I mean, Kevin Weil is, I think, either the head of product or just moved over to be head of like Science products that at OpenAI, Kevin was the head of product for diem or whatever it became after that. Right. When it was at Facebook. Yeah. And so no one understands that's the intersection of the two and how to build cool stuff that consumers use better than Kevin. Literally no one. And so that's just one example. Right. Or I forget how to say his name. Just start last name, starts with an M and long Middle Eastern name. And I apologize, I'm usually pretty better with names. He left one of the Frontier Lab AI projects to work on a decentralization project. And what he's working on is super, super interesting. And, and so. And then of course, Venice, which Eric Voorhees is working on, which I think is interesting. It's not really decentralized yet, but he's got dibs to. To move it towards a decentralized model. The token is more about, you know, paying to use the service than it is about decentralization right now. But. But I am convinced that you're going to see an agent for everything model emerge and somebody is going to. You know, I've got GitHub open in the background because I'm constantly looking at ways to improve my productivity now. And that's amazing that the way I'm doing it is looking at fucking GitHub.
- [21:11]
A
You pick me off, man.
- [21:13]
B
I'm not a kid anymore, you know, and so the fact that I'm doing that and having those conversations. But my point is, if someone's going to release a GitHub that just makes it so trivial, whether it's x402 or one of these other new standards that just basically makes it so drop dead easy for everybody's open claw or cloud for work instance to just process transactions using decentralized systems and it just works.
- [21:40]
A
Yeah, the exchanges are already moving in that direction. I mean, I know OKX launched a huge agentic wallet and developer toolkit for AI. I assume all the other exchanges have or will. You're the first person who really lit the spark under me when we were in New York because you were the first person I saw who was like not sleeping because it was such a productivity hack and you were so excited and I followed down that rabbit hole and we're just finding ways where it actually really genuinely can replace things rather than sort of help. But I told you, I vibe coded a website myself as a joke yesterday. That's way better than my existing one that I'm going to go live with. And I mean this thing, I didn't even give it cues. I said, make a website based on what you know about me. And it was 50% of the way there. You know what I mean? Like this kind of stuff, I know maybe that's not a big deal to most people, but we're not going to be doing much for ourselves.
- [22:33]
B
Yeah, I showed you my EA Chief of staff who's an AI. Can't believe that in New York now. And I think I've basically been on the road, more or less. I just got home a couple of days ago in my California home and I had been on the road for over a month and I was in Nashville for an event this weekend and all of a sudden I stopped getting my alerts from my chief of staff AI and I felt naked. I was like, what's going on? And so I immediately dug in and it's running on a server in a single room somewhere and for whatever had crashed, which had never happened before, and of course I'm not in the room and I'm like, oh my God, oh my God, I'm not going to be home for three days. What am I going to do? And, and I was literally sweating. I was like, what am I going to do? And, and so I had to call somebody and, and broke every rule of security that I could think of to, to get them to, to get it live for me again and to get back to like, you know, being connected because I, I've just, I've already become so dependent on, on what I've been building and our team has become so dependent upon the tools now and I'm sure like we're just a drop in, you know, we're round off error to what's happening on the planet.
- [23:53]
A
Are you using it to transact yet? I mean like what we're talking about here. Do you have agents that are in any way utilizing crypto for payments or transacting?
- [24:02]
B
We don't touch customer assets. Anything that's attention.
- [24:06]
A
I meant you personally.
- [24:07]
B
Like I have, it does have. Yeah, there's one agent that has my credit card details encrypted that I've. The biggest challenge with the agents so far is integration with the web.
- [24:20]
A
It's very poor in one direction.
- [24:22]
B
Yeah, yeah, it can. It can parse information. It can't push information easily. And so I've. I've struggled with how to build agents that can book a flight.
- [24:33]
A
Right. Or get you all the way there, but they won't do the booking, they'll do the full search.
- [24:37]
B
They'll try. Yeah, they'll try. Yeah. And I have a voice interface that will call a restaurant, and a couple of times it's gotten really far into the process, and then the restaurant realizes it's talking to a bot and it just hangs up. But I think, look, that's. We're having a conversation that we wouldn't have been having four months ago. So in four months, this problem will be solved, I guarantee it.
- [25:02]
A
That website I built, in 20 minutes with less than 20 prompts to correct things would have been 10 or 15 grand six months ago, easy. Yeah, yeah. I mean, pretty basic, but, yeah, literally. And I would have been happier.
- [25:17]
B
Yeah. And. And, you know, being a registered investment advisor and touching people's money, we can only go so far in. In how certain things are done. Like. Like from a core development perspective, we use the tools, but we have to be extremely careful in how we test what's built, how we launch what's built, especially when the assets are in vaults. Because if you're an exchange, right, you're actually transacting against the database. You're not transacting against the physical assets. If you're an SMA provider and you're using vaults like we are, we're actually physically transacting against the assets. So. So in other words, if. If you're earning yield, you're deploying the assets to earn yield. If you know you're staking, you're deploying the assets to stake if you're earning, if you're borrowing, you're deploying the assets to borrow. You can't screw that up. There's no row in a database to fix. And so it has to work. And so we're very, very cautious, for obvious reasons, about how we deploy. And that's why we don't lose client money. I mean, there are risks and we disclose them, but a loss is unacceptable.
- [26:22]
A
It wasn't much, but in my process with Abra, I flippantly was trying to move a bit of eth back out to somewhere else. And obviously you have your saved addresses, and I accidentally just chose the one that was your guy's Trading desk, and I got a call immediately from you guys. Are you actually trying to send money to our trading desk? Which I said, no. What the hell are you talking about? They saved me and I'm pretty diligent and on top of these things. But that's not a mistake you guys could have just let me make. It's certainly not with an AI issue.
- [26:54]
B
Yeah. In that case, you have to whitelist withdrawal and we're not dealing with the $100 Coinbase user who, if they, if they screwed it up, like what you're saying, they'd be like, oh, that was dumb. Now I get back to my day, you know, these are people who would be like, calling me, finding my home and like, what the fuck? You know, the whole thing. And so that just can't happen. Yeah.
- [27:14]
A
I've never called Bill.
- [27:16]
B
No. No, never. It's okay. Yeah, service.
- [27:19]
A
Yeah.
- [27:20]
B
Yeah. A lot of our, a lot of our clients have my number, by the way, and that's okay. I mean, it's, it's a different model. I am not trying to build a 50 million seat Coinbase platform, you know, where, I mean, can't imagine what, what comes at Brian Armstrong from people whose assets are locked because they have some weird KYC thing going on. And you know, nobody calls the CEO to tell them that everything is working just fine, ever. It's always some problem. Right? So, yeah, I can't imagine. I mean, I, I, I've built a tiny version of that with retail when we had hundreds of thousands or, you know, million clients, whatever it was, and, and you know, still wouldn't get. That's not true. I would actually get messages about how much people love Abra and especially after, you know, blockfi, Celsius, Voyager and all those services failed. But, but you know, normally that's not what happens.
- [28:11]
A
I used to, every time we got on, I feel like I would congratulate you on existing.
- [28:16]
B
I never.
- [28:17]
A
Congratulations on still being here.
- [28:19]
B
Tried to block it out of my mind, but I never got so much gratitude and compliments for not dying. Yeah, it's like, how is this even a thing? It's like, I don't, I mean, I don't want that compliment.
- [28:32]
A
Such as a reflection of how bad it was though, like for the industry and just the environment around it. So.
- [28:38]
B
Sure. I mean, it's still happening. Look at block fills, right? Most, most of your audience probably doesn't know block fills. They're a prime, they were prime broker. Very, very deep in the derivative world. Apparently mismanaged a bunch of Client funds and you know, every bankruptcy drift last month or something.
- [28:57]
A
Right. I mean, the last couple months. These are not old. Right. Prime Trust we had sort of back in that time when they completely mismanaged their keys and then.
- [29:04]
B
Right. I mean, they, I mean. Well, the thing about Prime Trust is there's mismanagement and then there's fraud. Right.
- [29:11]
A
Mismanage and then tried to yolo into some eth longs to make it whole, I think.
- [29:17]
B
I don't know. I don't know. You know, we have. We're still dealing with the repercussions of the clawbacks on that one, which is just bizarre. Yeah. Anyway, so greener pastures. You know, we, we. We're about to enter our quiet period, so I get to talk a little bit more now. And, and of course every time I, I come on a show like yours, the lawyers start to sweat. What the hell is Bill gonna say now that we're going to have to do an AK filing on? Including what I just said. So.
- [29:46]
A
All right, not. Sorry. So let's talk about getting public now. Right? You said you made the announcement about 20 days ago. What's the thinking behind doing that? With this timing? And what does that process look like? I guess I've asked you before, but now you can speak about it in a much more transparent way.
- [30:04]
B
Sure. I mean, the timing isn't now. The timing was now when I started the process, maybe 18 months ago. Look, here's my thought process. And the thought process goes all the way back to what we were just talking about when, when we shut down our centralized kind of retail services. It was under the guise of, okay, this is a mess, right? We've got Blockfi, Celsius, Voyager, ftx, you know, whatever pick. And I'm missing a few of the others that failed. I said, all right, we, we want to be in the space of providing safe, secure, simple, easy to access crypto banking services for the masses. Now that probably means in the short term regrouping around higher net worth clients because, you know, we made a very strategic decision to migrate to a vault based model, which in legal terms you would call an SMA based model. Separately managed accounts where each client gets their own vault under an SEC registered investment advisor model, you know, dealing with, you know, qualified clients in many cases for certain types of products. Or then on the legal side, you know, we trade on the US side through, through qualified custodians to make sure that, you know, it passes muster with, with future rules. And, and so when you do that, right, you're Basically saying, okay, I am going to. And this is not. The irony of this is not lost on me. I want to be the trusted safe space for people in our space who can't use MetaMask, who don't understand how defi works, but would like to earn seven and a half percent on their dollars, for example. Now I also recognize at the time that rebuilding that trust, post three arrows and tattoos and all that shit was not going to be easy. And so because I publicly posted that we had exposure to FTX and Genesis four years ago or whenever it happen, that was the right thing to do and clients thanked me and fine, whatever, but the point is that how are we going to build that trust back over time? When you're dealing with high net worth clients and it's not retail in the traditional sense, but it is individuals, even if it's a family office, it's a big chunk of someone's money potentially that you're putting to work. And so the strategy was become an ria, do the public disclosures, do dozens of pages of risk disclosures, which I don't think had ever happened in our space before. If you go look at our brochure. So, so let me just a little bit of G2 on how this works. If you're an RIA in any, any type of RAA that's SEC or state registered, I believe you have to basically publish what's called a brochure. It's a Form 80V and you can see it on the SEC website for any SEC registered investment advisor and they have to do. The brochure basically is a description of all services you provide as a fiduciary, along with risk disclosures for the services you're planning to provide or potentially going to advise clients on. And I'm not giving you the legal definition of this. So my lawyers are sweating right now. It's fine. But by and large what I'm saying I believe is correct in terms of my description. Now I don't think that it happened in crypto and digital assets to the degree that we had done it. And you know, we're doing it for yield, we're doing it for lending, we're doing it for staking, doing it for custody. Right. And so, so we're advising clients on how to do these things through, through our platform. And, and so it's all there. So that's part one, part two said, you know, this is going to take a lot of money and a lot of trust to rebuild this at public global scale. This should really be a public company now. I said that to my team three and a half, four years ago. Okay. But that just wasn't going to happen at the time.
- [33:56]
A
Right.
- [33:56]
B
We were literally rebuilding, dealing with the fallout of. You mentioned Prime Trust. There's other, other, you know, things like Genesis still hasn't settled, I think, I don't know, we sold our claim. So I don't know. But, but my point is like we knew it was going to take time. I'm not sure I processed mentally how much time and how much it was going to take out of me, but we knew it was going to take time and we were all in. Like we made the conscious decision, okay, do we call it a day or are we all in? Because there's no in between. There's no in between. It's people's money. And so we decided, we looked each other in the eye and said we're all in. Right. And so methodically getting back into business, taking more assets in. We took in hundreds of millions of dollars in assets last year, for example. And you know, we made the decision early last year that we were going to try to go public because it would give us access to the capital, it would allow us to be both an operating business in crypto and also even have a Treasury in crypto and also do public reporting, good and bad.
- [34:55]
A
Right.
- [34:56]
B
And all of our laundry is out there, which is, I think what the public would want if they're trying to trust a party in that wealth management space. And honestly, I think it's what other wealth managers are going to want. And we're going to be scrutinized differently versus traditional companies that operate in the wealth management space for equities. It's just the nature of crypto. Right. Even, even now, if I'm opening a bank account, I don't get treated the same way as everyone else. Even post, you know, new administration and everything else. It's fine. It is what it is. But my point is going public is the next step in those check marks of trust that we simply believe we have to have going forward. And that, and it is a massive undertaking for a, you know, mid sized company to go public this way. Right. And we're fully committed to that, to that process. And we get no credit. We're not going to get any credit for that. I'm not asking for any, I'm just saying like that's the way it is. But, but it was a very strategic thing that, you know, we've been thinking about now for many years.
- [35:58]
A
You said that you'll have a different level of scrutiny than other wealth managers? How much more is that? And how much is that something you can handicap for in the current environment when we still don't have, no pun intended, full clarity?
- [36:11]
B
I don't know that I'll get more scrutiny. From an SEC perspective, every RIA goes through regular exams, right? That's everyone. So they don't pick on. I don't, I don't think they. Well, they can choose. So I'm guessing if, you know, I'm. Again, I'm going to get kicked for saying this, but I'm guessing if they're looking at, you know, in the Maryland office, four companies they could go examine and one of them happens to be in the crypto space, they're going to potentially choose the shiny object, which is the crypto company versus the boring, you know, $150 million RIA managing, you know, a bunch of equity portfolios or 60, 40 portfolios, I don't know. But I wouldn't be surprised if that's true. I have no insights as to how they choose who they're examining. But everybody gets examined at some point. And that's a good thing, right? Because again, this is not about decentralization. It's about who you're going to trust. Now, I'm enabling access to decentralized systems, but I'm doing it in a way where I am your fiduciary. And that has. You have obligations when you do that. So, you know, I think the scrutiny is going to come from clients and partners. And, you know, the whole ecosystem around
- [37:18]
A
us is just a lot more complex. When somebody want to do business with you.
- [37:23]
B
Exactly. And look, you know, whether you're a broker, we have clients and. Sorry, we have competitors and other partners in the space who are actual broker dealers because they deal in traditional securities and they're already getting that scrutiny. But it's just different for crypto. It is, and it will be for a while until basically it's not crypto anymore. It's just because everything is tokenized and it's just finance at that point. I think things will be different because it won't be us and them, it'll just be us. And we've made a lot of progress on that in the last year, as we were talking about earlier. But until that happens, we're just fully committed to accepting that we have our own level of scrutiny.
- [38:08]
A
We were joking earlier about congratulations on surviving and how you've basically survived through every up and down there could possibly be. You Said pretty confidently that hopefully there's no more big downs. Do you have any concern about regime change or some of these policies disappearing? The anti crypto army reemerging a full pendulum swing back the other way? Because I feel like it has to at least be slightly on the radar and that would also be a good reason to do things now.
- [38:38]
B
Partially true in terms of us like going public, baby. But more importantly, I think like Clarity act, it has to be urgent, like it is existential for us to get that passed. Why? Well, everybody says well, but the administration is doing right by crypto, you know, sec, cftc, saying the right things. The problem with that is. And that's true, but the problem with that is that's interpretation of existing law. It's not literally the existing law because the existing law still predates the Internet. So we need this genius and Clarity act to become both of them, to become law, to put a moat around our space. So if we get Warren 2 and Gensler 2, they can't do what they did before. They may try, but it will be much easier for the courts to, you know, put them in their place. So, so I, I think it's, it's still existential, right? We, we simply cannot assume that, okay, we're going to get Vance, you know, three years from now and he's going to toe the line in terms of the future of finance or, you know, I don't know, you get somebody and even. And again, Biden still doesn't understand what was happening. I'm sure he doesn't. So it's not even about who wins.
- [39:58]
A
It's about in crypto.
- [40:00]
B
I'm talking about crypto. I wasn't trying to be mean, I'm just. Sorry.
- [40:06]
A
Like when he woke up in the morning at breakfast or.
- [40:09]
B
Yeah, I don't know. I mean, look, there's no way he understands the nuances of what was going on in our space. Right? At least not until he saw the money moving around and saying, okay, why are these people raising so much money? You know, why is Trump able to raise all this money? Which doesn't make any sense to me. Maybe at the end he understood what was happening there. But my point is, like, what's existential to me is we need to put this legal moat around the future of finance that accepts the fact that decentralized systems that you, Mr. Government, can control completely are here to stay. And that is the ultimate check on your power, in my opinion. And I get why socialists who want centralized control don't want that. And I've always understood that and I've always understood why that has to be stopped at all costs.
- [40:56]
A
I guess the question is, are you confident that the bill that gets passed will actually accomplish what you're saying?
- [41:03]
B
I think, I think it goes a long way to accomplishing that. Let's put it this way, it's way better than what we have now.
- [41:09]
A
Okay, right. And better than no bill.
- [41:13]
B
I don't even think it's a totally bad bill. I think it's got some compromises in there, which is fine. That's just the nature of the sausage factory process. But I think like, okay, so yield, everybody's favorite topic. Everybody talks. Everybody's an expert on who should be able to pay yield now, right? It's the latest. Like let's, let's all become experts on the next topic on, on, on, on crypto Twitter. There's a reason why banks are able to do what they're do what they do and no one else can. PayPal is regulated totally different from Chase. PayPal can't pay yield as a money transmitter today without having a bank partner to pay the actual yield. Okay, that was true before crypto. Why, why is that the case? Well, there's money market based systems that generate that yield that basically require a certain level of scrutiny because the government has made insurance available to those banks to send a message to their clients that their assets are safe, Money transmitters are not subject, or that insurance is not available to a money transmitter. Right, But Chase has an army of people on site from the fdic, the occ. I don't know this for a fact, but I'm going to go out in a limb and say they do. Okay, who are overseeing what the bank does, not to mention probably FinCEN staff.
- [42:33]
A
Right.
- [42:34]
B
So Coinbase doesn't have that. So for Coinbase to say I want to pay yield the same way Chase does, that doesn't really jive with me. Now, where they do have a case, and where I think we have a case, is if you're using DeFi, not in a centralized way, meaning not with omnibus accounts across all your clients, but one client is deployed directly from their MetaMask vault SMA into DeFi, they should be able to accrue that yield because technically it's not Coinbase paying it, it's the DeFi contract payment. And you're taking direct risk to that contract. Maybe it's a security, I don't know. There's, you know, we can get into the nuances of how you would do that legally, but That's a difference between, I think, what Jamie Dimon would argue, and I'm not sure he understands everything I just said, but he certainly understands the difference between Coinbase paying Yield and Chase paying Yield. And he's not completely wrong. I understand his, his reasons for wanting it are different than Coinbase or what I'm saying, right, because it's existential to him. But the big point is that what banks have to go through to lend and pay yield is totally different than what a coinbase or a PayPal has to go through to exist as effectively a money transmitter. And a trust bank is effectively a money transmitter with other kind of fiduciary responsibilities on top. And I'm really, really oversimplifying here. But, but you get my point. Like even that trust is not set up with the right oversight to invest omnibus accounts, to pay yield, or even
- [44:10]
A
to take retail accounts. Right. At all. Right.
- [44:12]
B
So potentially, I mean, there, there are.
- [44:15]
A
That's not their intention.
- [44:16]
B
Yeah, that's so, so I, I'm not, I'm not so sure about that part. But I, I, it doesn't really matter. I think, I think where we landed and, and I get, I get some nasty comments back. But, but I think where, where we are landing and have landed so far actually makes more sense to me than what a lot of crypto Twitter is giving, you know, the Senate credit for. And, and I think we're going to get a compromise that addresses this. I don't think Coinbase is going to fully like it, but Coinbase is trying to get a free lunch and a free ride on the backs of this legislation in order to act like a bank without having to be a bank. And I understand, I would want that too, if I was them, if I could be a bank without having to be a bank.
- [45:02]
A
Self interest.
- [45:05]
B
So, look, maybe I've lost some of the audience and I apologize for that, but the bottom line is I think we're heading in the right direction on this. I'd be very, very surprised if we didn't have a good, reasonable compromise bill in April and get it passed before some type of recess coming up.
- [45:27]
A
I like the optimism. So I know we only got a couple minutes left, but I just want to ask you what behaviors, or I kind of always ask you this, but what are you seeing now in the current environment from your customers and potential customers? How are they using the platform? How are they most interested in using the platform? And what are they looking for, for. And have customers changed who they are?
- [45:50]
B
That's three good questions. I heard, so let me take them one at a time. So, so what? I'm. Okay, so I look at this like a sine wave of, of adoption. And, and a lot of it is the opposite of what it should be. When you think about behavioral economics because you have, if you have, if you have conviction. What I mean by that is if you have conviction for bitcoin and it's trading at 125,000, you'll buy some. If, if you have the same and, and if your conviction is only based upon the price momentum, right. And it falls to 60, okay, you probably won't buy. But if your conviction is based upon long term thesis around where the markets are going and you loved it at 120, you should love it at 65. But that's not the way the herd thinks, right? The herd just by definition follows the rest of the herd. And so I, I don't necessarily like that, but I can't. I'm not a behavioral economist who's just thinking about ways to manipulate people into seeing things differently all day. That's not my job. My job is to advise people and to run an advisory that advises people relative to where their heads are at. And I'm not a therapist regardless of what my kids may think. So what I think is that sine wave that I was talking about means that people want to buy Bitcoin when it's close to all time highs because it's a positive shiny object. But at the trough, high yield products become interesting, right? So we launched usdaf, AF standing for aberfi, which is paying, I think it's paying somewhere between pretty steady, between like 5 and 12%. And I'm pretty sure that that's the right number. Maybe it's a narrower range than that, but somewhere in that range, which is fantastic, right? And it's got risks and we disclose all those. But so does a money market fund, right? And so, but, but we're also, it's got a rewards program attached to it right now for the first couple of hundred million coming in, paid in AFI tokens which we're going to be releasing soon. AFI being the governance system for this new aberfy platform that we launched on Solana earlier this year. And so that effectively the effective yield when you combine the two could, could actually approach like 13, 14, 15%. And that's extremely compelling in this environment. Right. So that's. Now back to your question. Like that has become super interesting to a lot of potential clients who are saying, hey look, I'm interested in Investing in bitcoin and Solana and the next generation tokens. I don't know when I should come in. But if I have this dollar product where I can earn this in the meantime, that's super compelling to me, especially if I'm getting the rewards right now. And we're not giving those out forever. But I think it's a potentially interesting way to deal with that sine wave of adoption. And, and yes, the customer profile has, has morphed a bit, a little bit into, into different camps. Right. We have a lot of clients who are just, they're never gonna, they, they want to never sell their bitcoin under any circumstance, but they want to buy a house. And we're seeing more and more of that.
- [48:48]
A
Right?
- [48:48]
B
Yeah, exactly. So, so, and, and those people are looking for a safe, easy, handheld way to do it because we're talking about millions of dollars. We're not talking about some of the retail services that let you borrow $100 against, you know, $1,000 worth of Bitcoin. And I think those services are great. Right. And I think those self service models are very compelling for people who are doing small borrowers. But if you're borrowing for a house, you want a little bit of handholding, you want to know who you can call. And Abra is very good, I think at facilitating that through our borrowed network partners for our clients. And then the second camp is these newbies who are, like I said, they know they want to allocate, they're not sure when. And the dollar yield is extremely compelling to them because they're basically mentally building a treasury model around. Okay, I may not day trade, but I might swing move some of my positions over time depending upon where markets are. And I'm a little worried about the macroeconomic state of affairs. So maybe dollars aren't trash in the short term, maybe they are in the midterm. So I don't mind earning, you know, 7, 7.5% plus another 7% in rewards while I'm waiting.
- [50:04]
A
Right.
- [50:04]
B
And, and then the third is I've been holding a basket of crypto forever and I've had it on the exchange. It went from potentially a few hundred thousand dollars to several million dollars. I probably shouldn't have it on an exchange. And I like the vault model because it's, you know, of everything you say about why it's safer, how I can retain title to my assets, how I don't have to fight if you happen to go away. I'm not fighting the voyager, whoever bankruptcy court to get my assets back. And so those clients who do Emoticum of homework love the Abra SMA vault model. And so. So we're starting to see different camps emerge. To your question, it's not just a pitch. We generally do see different, you know, buckets of client types that come to us for different reasons. But ultimately it's the same, same platform.
- [50:50]
A
Okay, so before we wrap, what's your timeline on when everybody just views this asset class and all of those offerings as that's their bank, you know, come to you and they're like, I'm going to hold my money here. That'll earn some yield on it. I can deploy. We'll be trading everything tokenize, whether that's on Abra or Abra or Charles Schwab. Right.
- [51:12]
B
That's the irony of Jamie Dimon's argument against Coinbase in my opinion is, is this becomes, I'm not allowed to say Abra's a bank. That's just the legal definition. Right. And I'm okay with that. It's fine. Well, I'm actually really not okay with that. But, but doesn't matter. It's not my choice. So, so I think what happens is, is this starts to offer the same features in terms of, you know, you can earn a yield with risk disclosures. Yeah. It won't have insurance. But the reality is, is that with the way it works over time it will become safer and safer and safer and safer and, and everybody will be using defi to earn yield, even the banks themselves.
- [51:49]
A
Right.
- [51:50]
B
And so what happens is now we get tokenized everything in the next step. Right. So by the end of this year I'm pretty sure that you'll have tokenized equities live in the US and now that opens up Pandora's box around 247 trading versus when the markets can settle versus price discovery. And it also opens up the door to our Bitcoin backed or Ethereum or Solana backed loan models to traditional equities. I wouldn't be surprised if we're doing more loans against stocks in three years than we are against Bitcoin 100%. Right. And that's a good thing. Right, because it's what people want and it's tax efficient. It's efficient for in terms of like inheritance models and estate models and estate planning and all those things. And so that's a long winded. You know, basically what I'm getting at to your question is, is as everything becomes tokenized as you have dollar products that can earn a reasonably high yield in a reasonably safe way with, with very good disclosures.
- [52:51]
A
Right.
- [52:52]
B
And, and you can do custom portfolio construction that combines traditional equities and high yield dollar products and traditional crypto. Because it's all tokenized. The wealth management world has no choice but, but to move to this model. Right? Because as this inheritance of the 100 trillion starts to trickle down to the next generation, they're looking at the old wealth managers, 60, 40 portfolios and going, what is this boomer bond shit? And can I just move it all to Robinhood or to Abra and just get my portfolio of tokens?
- [53:27]
A
Right?
- [53:27]
B
I mean, yeah, so our big long term bet is that as everything becomes tokenized, everything. Real estate, equities, debt, money markets, you know, high yield funds, whatever. As it all becomes tokenized, we become, and you know, a small cadre of our competitors become the best place to manage those investments. Because it's, you know, you're in your own vault, you still can do yield, you can still borrow, you can still trade, and eventually we'll facilitate probably payments. You know, of course we were on our way to launching a credit card under the retail app we had, and I think at some point we'll get back to that for, for this model as well.
- [54:14]
A
Incredible. I know we ran out of time there. So obviously everything about this will be in the description for people to check out. And I encourage everybody to follow you. But I love the perspective. I love watching you continue to push it all forward. And I can't wait till you guys are public. We can settle this. Hustle, hustle. All right, man, that's all we got. Thank you so much, Bill. Always appreciate it.
- [54:36]
B
All right, love you guys.
- [54:37]
A
Good to see you.