332: Julie VerHage On The State Of FinTech

Julie VerHage is the Senior Correspondent at FinTech Today. She also serves as a fintech analyst for a number of well known Silicon Valley venture capital funds after having spent a number of years as a journalist at Bloomberg. In this conversation, we discuss Square, Robinhood, Apple, Uber, Stripe, Brigit, Libra, neo-banks, streaming payments, the lending industry, technology companies helping distribute PPP money, what is next for fintech companies, and how incumbents are likely to respond to these upstarts. Julie also writes a weekly newsletter covering product strategy and analysis on the fintech industry. Check out Fintech Today to learn more. =========================== LVL is a mobile banking app that provides an integrated Bitcoin and traditional bank account experience for a flat $9 monthly fee. They have no trading commission like Coinbase and no hidden spread like Robinhood. Your cash is held in a private, FDIC-insured checking account and you can buy and sell Bitcoin as many times as you want and only pay the monthly $9 flat fee. Legendary Bitcoiners Jimmy Song and Willy Woo are already advisors and we liked it so much that we invested in the company. This is a no brainer and it will save you an incredible amount of money, so go sign up at lvl.co/pomp or use promo code "pomp". ========================== The Trends premium weekly report helps you understand market trends poised to skyrocket and how you can pounce. Join the private network of 5k+ builders, founders, and investors spotting tomorrow’s trends. Expand your network, and discover the next big business idea before it explodes: https://trends.co/pomp/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Julie Verhage is the Senior Correspondent at Fintech Today. She also serves as a fintech analyst for a number of well-known Silicon Valley venture capital funds after having spent a number of years as a journalist at Bloomberg. In this conversation, we discuss Square, Robinhood, Apple, Uber, Stripe, Bridget, Libra, neo-banks, streaming payments, the lending industry, technology companies helping distribute PPP money,

• 0:39Anthony Pompliano?

  what is next for fintech companies, and how incumbents are likely to respond to these upstarts. I really enjoyed this conversation with Julie, and I hope you do as well. Before we get into the episode, though, I want to tell you about two new sponsors. That's right, these are new ones. Level, spelled L V L, is a mobile banking app that provides an integrated Bitcoin and traditional bank account experience for a flat $9 monthly fee. They have no trading commissions like Coinbase and no hidden spreads like Robinhood. Your cash is held in a private FDIC insured checking account, and you can buy and sell Bitcoin as many times as you want, and you only pay the monthly $9 flat fee. That's right, there's no trading commissions and no hidden spreads. Nine bucks, trade your heart out.

• 1:24Anthony Pompliano?

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• 2:10Anthony Pompliano?

  That community is called Trends. Trends teaches you how to build shit people want by giving you case studies, industry deep dives, and first looks at emerging market opportunities. Trends teaches you to never give up because they have formed a special community of thousands of entrepreneurs who help each other every step of the way. You'll avoid the assholes because that community actually gives a damn about you and your business. Trends will help you question assumptions by providing access to databases of thousands of real businesses' financials, so you know the true numbers for what it takes to succeed. And Trends is the best place to learn about up and coming market opportunities. Every week, they send out a report of emerging markets and show you exactly how you can capitalize. And guess what? They want to reward your ambition today.

• 2:54Anthony Pompliano?

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• 3:37Anthony Pompliano?

  Go get the two-week trial for $1, trends.co/pomp. I'll see ya on the inside. That's it. Let's get into the episode with Julie. I hope you guys enjoy this one.

• 3:49Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 4:15Anthony Pompliano?

  All right, guys. Bang, bang. I've got Julie here. Thanks so much for doing this.

• 4:20Speaker 02

  Yeah, it's nice to see you again, even if it's virtually.

• 4:24Anthony Pompliano?

  For sure. So for those that don't know you, let's just start with your background and kind of what you did prior to getting to Bloomberg and then eventually leaving.

• 4:32Speaker 02

  Yeah, so I started at Bloomberg back in like 2015 and originally I was just a markets reporter. So I covered everything from like analyst notes on specific companies or the broader S and P 500 in general, things on currencies, commodities. Good for me because I was a finance major. I just liked the creative aspect of journalism versus just going into I banking or asset management. So I did that for about two years and then I kind of casually started covering fintech. I think there were some of the robo advisors that were big around the time, some like things like lending club, they had just gone public.

• 5:10Speaker 02

  And we didn't have anyone at Bloomberg that was focused on just fintech, which kind of like blew my mind in the sense that if you think about it, Bloomberg is one of like the original fintech companies. So around Thanksgiving that year, I like wrote this big memo and sent it to the head of the newsroom like, hey, we don't have anyone covering this. You have a lot of people covering markets right now. And here's some stories that I've done on it in my free time and why I think our customers would care about it, our audience would care about it. And in general, like there's a lot going on here. If we don't have anyone covering it, we're going to look really behind because the New York Times has Nathaniel Popper, the Journal has Peter Rudiger and other people.

• 5:50Speaker 02

  So within like a month, they moved me over to the tech team to start covering that, which was amazing. I spent around two and a half years on that team. Covering everything from a lot of Robin Hood stories, a lot of still some more robo advisor story, a lot of crypto stuff, hence why we ended up meeting. Because that was right when I started was around the crazy Bitcoin bubble. I think, yeah, it was like, was it December 2017 where Bitcoin hit its all time high or like started getting there? And in November of that year, so that Thanksgiving was the one where I had emailed. So crypto was another reason they're like, oh, we actually probably should have someone covering this. This is a good idea.

• 6:30Speaker 02

  Um, and so it would all, it was always kind of changing a little bit in terms of what companies I would focus on just because the space is so huge, as you know, so you kind of just had to follow the news flow a little bit. Um, so the two public companies I covered a lot were PayPal and Square. Um, lending I did a little bit and then like after the lending club fiasco and things kind of like just got boring in this space a little bit, you kind of shifted your priorities to things like Robinhood because that was heating up in terms of reader interest. Um, and things like that. And then right before um, COVID hit, as we were saying, um, in the warm up here was when I ended up leaving Bloomberg. And it was hard, like I loved journalism, I just was ready to try something new and kind of like I was a finance major.

• 7:15Speaker 02

  So I don't know that I ever thought journalism was like the career I was going to retire in. Um, and much like you and your fiance, I have kind of that entrepreneurial spirit and wanted to try my own thing too. So I left on March 3rd, March 4th, it was like the Tuesday of the first week of March. Um, and I just kind of like, I had talked to a few VCs and stuff before and I knew they were looking for people to help them with content, help their startups with different like research and whatnot, like the nice thing about being a journalist is you have a lot of different skills, so that's great. Um, and then I also, Ian Carr from Fintech Today reached out. So now I do a premium newsletter that he was planning to start and was looking for someone to do.

• 7:57Speaker 02

  I was like, hey, you should bring me on, I'm happy to do that. I love, writing a newsletter was one of my favorite things to do at Bloomberg. It's kind of this just like, I don't know, as you know, it's like really good stuff in it, but you just get to like talk to your audience. It doesn't have to be so professional and buttoned up and everything, you just have fun with it. Um, so each time I write that every week, it's just like me having a conversation about what's going on in fintech, why it's important and what people are saying it means for the future. So you talked about like PPP, a bunch of other things. Um, and then I'm also helping a venture firm right now as an analyst covering fintech and health tech just because on the side I um, teach fitness classes and have a personal training certification.

• 8:40Anthony Pompliano?

  So when people look at fintech, I think that people in it know exactly what we're talking about. People who don't are like, what the hell is that? And so maybe talk a little bit about, since you've covered so much of it, how do you think about that intersection between finance and technology? And basically like what falls in fintech versus maybe, oh, that's just like traditional finance. And, you know, they're using cloud service, but that's not true fintech. So where's kind of that line or how do you think about that?

• 9:09Speaker 02

  Everyone's going to give you a different answer for this too. Like real estate sometimes is fintech, sometimes isn't. And health tech is sometimes fintech, sometimes isn't because you have like health insurance aspect of it. So a lot of it is just kind of like figuring out like how much finance is actually involved in it. Cause there's pieces of real estate tech that is very finance, right? Like title insurance, I would think of as a very fintech type thing. But or like getting a mortgage, I think of as a very fintech type thing. You have companies like Blend and Quicken and all these guys that are thought of as fintech companies. But there's also other pieces of it where like, I don't know, there's probably like design tech that's involved or like pure real estate, like broker tech.

• 9:54Speaker 02

  That's kind of like, I don't really know if that's fintech, it's getting kind of close to the line. But I think the main things that I always focus on lending is very much fintech. Payments is very much fintech. Crypto is, but it's almost like so massive in itself that part of me thinks of it like the separate sector of fintech.

• 10:15Speaker 02

  Same thing with like blockchain, I kind of put in that a little bit too, which some people will get mad at me about. Some people won't get mad at me about. I mean, what else am I missing in there? Those are kind of like the big ones that I see don't focus on a lot. Cause like I said, like Square, PayPal, oh, trading and brokerages, I also thought of as fintech. But that's something, it was very hard to figure out as someone as a journalist, figuring out what they should and shouldn't cover. Cause like I said, everyone's going to give you a different answer and you kind of just have to make your choice and stick your ground. Cause no one can really argue for sure one way or the other on most of it.

• 10:52Anthony Pompliano?

  Yeah, and I guess as you kind of look through the space, there's large companies that started out as technology companies, working in finance, there's the challenger banks and all that kind of stuff that are still startups and doing that. But then also now we're starting to see more and more large traditional finance companies from Wall Street start to build things, right? Obviously Marcus and things like that. And so maybe I'll throw out a couple of companies and you can just walk us through like your understanding of what are they doing, how's it going and kind of where they fit in the ecosystem. We could start with Robinhood, that's one that I know you've covered extensively. And maybe just kind of talk about like, what exactly are they doing? And kind of how do you look at them in the fintech industry?

• 11:35Speaker 02

  Yeah, so I mean, they're obviously very well known and have done very well as a starting trading platform. Someone that's more of a advanced trader that wants to do things like, like limit orders and like really like technicals and all that, like wants to chart things. Robinhood is not for them, but it's for someone like, it's really easy user interface for someone like you just have it in the palm of your hand. It takes you like five seconds to buy 10 shares in McDonald's if you want to, whatever. And it's it's free, obviously, but that's becoming less of an advantage, just given that like I have a Schwab account and I don't trade my trades on that either. They were just the first to do that and that was their first mover advantage in that space. But right now,

• 12:19Speaker 02

  they still have a very good user interface and everything. I think the tough thing for them, and it's across the board in terms of fintech, is cross-selling into other products. Like I just, when I think of Robinhood, I don't think of someone that's gonna be my bank account, even though they're trying to do that too. I don't think of someone that I'm gonna go get a loan from. I don't think of someone that I'm gonna go get a mortgage from. I don't think of someone that I'm gonna get insurance from, which doesn't necessarily mean that they won't be successful. I just think they have a choice to make in terms of where, like how broad they want to be. And I think a lot of that also just depends on their revenue stream. Like obviously, right now, you've seen the numbers from the public companies in terms of how many people are trading stocks

• 13:04Speaker 02

  right now. So Robinhood's doing really good, but how long does that last? And how do they maintain the growth that they've been seeing now that they don't have that advantage of being the only player in the game with no fee trading?

• 13:18Anthony Pompliano?

  Yeah, and it feels like Square has taken the opposite approach of starting with the bank and the payment technologies and then adding in kind of the brokerage services. So maybe talk a little bit about that and then we can compare the two and kind of which one's the more sustainable strategy.

• 13:34Speaker 02

  Yeah, um, so one thing you hit on there that I want to make sure we aren't missing is just like the rebundling. So the start of fintech years ago was people just picked the one thing to start with. Now everyone's trying to be the exact same thing, right? Everyone just wants to be like the Amazon of financial services where everyone just goes to this one stop shop and gets everything they need. And that's really hard to do. Because like I said with Robinhood, I don't, I don't know that I would ever think of them as someone I would go get a mortgage with or just like have my debit card for my checking account with. Um, Square has been able to do it fairly well. You've seen the numbers on Cash App and now it's starting to generate revenue, much like PayPal's doing with Venmo. Um,

• 14:14Speaker 02

  and the advantages that Square has, it's its seller network that it started out with, obviously, is like that dongle that you put in your phone for businesses because a lot of Cash App users are also just small businesses that have accounts on there too. They've just expanded and launched products to get more consumers like you and me using it with a personal debit card. And now they have trading on there, which is also free. Um, and also has a pretty good user interface like Robinhood too. There's pros and cons to each of them that we don't need to get into. Same thing with all the other ones. But they, they picked a good time to do that because they did that late last year and that's right around when trading started picking up again too. And one of the reason that Square's stock is like above a hundred dollars and when COVID was at its like worst,

• 14:58Speaker 02

  I think it was 30 or 40. Um, and I remember a few of my friends and I debating on buying it and we're all kicking ourselves now because it surged like 200, 300% in the past few months. And a lot of that's because of things like Cash App and showing growth in places that people hadn't thought there was going to be this strong growth before.

• 15:14Anthony Pompliano?

  Yeah, I think Square is now like a $50 billion company, if I remember correctly. I looked at it the other day. And when you look at that, it feels like this whole idea of rebundling, right? When I compare Robinhood and Square, it feels like Robinhood started with brokerage. To your point, it's very hard to add other things. Square, though, it feels like they can add anything, right? They've got deposits. And if you have deposits, that's kind of feels like the foundational core. Do you agree with that or disagree?

• 15:40Speaker 02

  Yeah. No, I think so too. And it's weird. I don't know exactly why there's some firms that we can think of as adding different things and we would be more apt to use them or not. I think Robinhood is just so known for its brokerage that it's just, it's hard. It almost would be like if Betterment tried to launch, I don't even know what, not like a credit card or something, but like something so different from RoboAdvisor that you're like, well, this is weird. I don't think of Betterment as that. I think of them as like, maybe trading stocks they could get into, but largely like long-term investing, maybe a debit card so you have like a cash account in there and stuff too. And Square's just been really good at picking good times to launch into new things.

• 16:25Speaker 02

  They have Square Capital, they have their online network. They made the acquisition of, what was it, Weebly, where now a lot of their sellers can use that to build websites and take photos of products and all these things. So that's another thing. Like everything, as we mentioned before, was moving online. So that's also helped out companies like Square and PayPal, etc. Because now instead of paying with cash or your Visa card or whatever, even if you're using that, but like it's online payments that are happening versus going into a store where you might not be using that.

• 16:55Anthony Pompliano?

  Yeah. And I guess how does something like what Square is actually building right now, and I think what Robinhood aspires to, how does that differ from like these neo-banks or challenger banks? Like people who are putting the flag in the ground and saying like, I want to be a bank.

• 17:08Speaker 02

  Right. Uh, I mean, there's a lot of similarities. I think Square is always going to be more known as payments than what a neo bank would be like neo banks. I don't see them ever having a big network like a Stripe or whatever, where it's just like an online platform for processing payments. Uh, but there are a lot of other things like whatever Square Cash App is going for, that's something that a neo bank would go for too. In a sense, Cash App is kind of like the largest neo bank that no one ever really talks about. We talk about Chime, Revolut, Monzo, like New Bank in Brazil, whatever. No one mentions Square, even though it has way more users than most of them. New Bank in Brazil might have more. I'd have to go double check, but I think Square still has more monthly active users than what they would.

• 17:51Speaker 02

  Um, so in that sense, anything Cash App goes after something a neo bank would want to go after too.

• 17:58Anthony Pompliano?

  Yeah. And, and I remember Jack Dorsey gave an interview one time and he really talked about this idea of like, the reason why he's so bullish on Bitcoin is every time he goes to open a new geography, there's just a bunch of obstacles, right? There's regulation around banking. And when you use that word bank, you know, everyone wants a piece of your business. Everyone wants to tax you. Everyone wants to regulate you. And so I guess part of this is how do uh, these companies do international expansion, right? In the U S, like it's heavily regulated and it's pretty well understood. It's just going to take capital and time. But how does that look going international? I know Robin Hood is trying to go international. Obviously Square is trying now, but like, what does that look like?

• 18:35Speaker 02

  It's depends on which section of fintech that you want to go into, whether it's payments or lending or banking. Um, I think a lot of it is going to be like white labeled through APIs and whatnot. So this is kind of an example. It's not perfect for international, but think of what Goldman is doing with its partnerships with Apple and Amazon, right? Like you don't think of Goldman as the one that you're doing everything with, but that's just Goldman white labeling its product and using the distribution of Apple and Amazon, right? So there's going to come a time where Goldman might partner with someone like Target. We can go into Target and get a mortgage through Goldman Sachs. And that's a good for both of them. One, because It makes Target have more users coming in and they can use data, get a piece of whatever

• 19:20Speaker 02

  they're selling. And Goldman gets massive distribution without having to do a huge amount of marketing. And customer acquisition cost is huge in financial services. And you also have extra data points that Target would have on that consumer to have a better idea of whether they're going to pay that mortgage back or not, and how reliable they are. Right? So I think the same thing is going to happen in terms of international, where there's going to be a lot of white labeling, probably some M and A. You've seen PayPal do a lot of M and A overseas in China, India, Mexico, LatAm, in order to get more flow over there, too. Because if you look at, for payments in particular, a lot of the cash flow overseas is still literally

• 20:04Speaker 02

  cash and not some sort of digital payment. So the growth for someone like that is going to come from overseas rather than the United States, barring like, I mean, COVID's obviously resulted in a lot of growth right now. But in a normal world, in a normal environment, the growth's coming from places other than US, India, and China.

• 20:23Anthony Pompliano?

  What do the legacy players do to kind of either combat, mitigate the threat from the neo-banks and some of these fintech-type companies, especially as they see them kind of already, not maybe tapping out penetration of the US, but having enough penetration to then be, you know, interested or intrigued by international expansion?

• 20:42Speaker 02

  Right. So I think a lot of it is going to be, end up being M and A. Last year, you saw Visa buy Plaid is a good example of a way to kind of mitigate anything that they might have done to dismantle or kind of like hurt them in the process, because they are players that are getting bigger. Same thing with Intuit and Credit Karma. And I should mention that, like, those aren't like officially done yet, but they're announced, they're just undergoing like regulatory approval and stuff. So that one as well is one where you just see so much of the potential now that you're starting to see big, good acquisitions. Most of them aren't going to be that big, they're going to be much smaller, and it could be another fintech buying another fintech versus an incumbent buying a fintech. So I think that's one trend that's going to help with that.

• 21:27Speaker 02

  A lot of these firms in the past like five years or so have opened venture arms that are continuously getting more aggressive in terms of funding and partnering with a lot of the firms that they can get information from. Um, and then really just like helping add more uh of their money towards rev- uh research and other things to kind of figure out where the ball is going next. Um, I think it's Jamie Dimon usually mentions this in his annual shareholder letter, talking about how much money JP Morgan is spending on innovation, all these other things now. And that, if you look over the past few years, like it's significantly picked up and it's because of fintech and all the stuff that we see every day going on behind the scenes.

• 22:11Speaker 02

  Like, there's a reason now, all of a sudden, more of our friends have apps from Venmo or Cash App or Chime or whoever on our phone and don't have like a Chase app on our phone and stuff, right? Um, so like, that's not a trend banks like to see and they're gonna do everything in their power to make sure that they don't get disintermediated.

• 22:31Anthony Pompliano?

  How does Stripe fit into all this?

• 22:33Speaker 02

  Stripe, Stripe, Stripe could do a lot too. That's another one like Square that I think there's a lot of room for them to expand in different things and the thing Stripe has going for them is, like I said, most transactions overseas now are still taking place on cash, there's a lot of room to bring those online. And Stripe's big motto is increasing the GDP of the internet, that's literally what they say. So, if you go after these markets where they're not using the internet for a bunch of different things and selling online and processing these payments online, guess what? Stripe can come in and go do a bunch of that stuff. Um, they've expanded more recently, having um like a Brex-type credit card for companies, they've started lending, um Stripe even has a VC arm itself.

• 23:16Speaker 02

  I think there's a lot they could end up doing and, I mean, even the two founders, there's a lot of room for them to do things politically and everything too, in terms of just like fundraising and, you know, speaking a lot for the space in general.

• 23:29Anthony Pompliano?

  Stripe and Square both obviously have payment data and they're starting to kind of flex their muscles there. We also see Amazon doing this where people are saying, wait a second, if I understand your payment data, then I can probably better predict lending to you or providing capital to your business or organization. How do you think about that and the evolution of just like what people can do with the data and to create other business lines in the future?

• 23:55Speaker 02

  Yeah, I mean, if you sell it, you should make sure that it's all, you know, tokenized, anonymized, et cetera, to make sure it's safe and your customers don't get freaked out by that because trust in financial services is extremely important. But otherwise, there's a lot of room for companies, especially in an environment as hard to lend in right now, where you can sell some of that data that makes it so they're that much more likely to make the right loans and know what kind of loans people would be looking for and target the right customers. Whether that's good or not is debatable and I can see both sides of it. But in any case, there's a lot of room to use that right now because if you think about it,

• 24:35Speaker 02

  everything from like a credit score is getting so much more complicated with all the things that are going on around it. It's not just these basic things now, like how many credit accounts you have and how up to date on payments you have been on them. There's like all these other little things around there, alternative data, big data, whatever. So there's, there's going to be a lot that's going on there and there's a lot of both smaller and medium sized startups in the space that are trying to have API products that can sort of analyze that and help firms better understand their customers and who they're lending to.

• 25:10Anthony Pompliano?

  Mark Andreessen obviously famously said, software is eating the world. It feels almost like software is like really eating finance right now and they're kind of walking down feature by feature or product by product that a traditional bank would offer. Is there a world in the future where companies just use a Stripe or a Square? And that is their financial services provider, everything from accounts to credit cards to lending. I mean, just like the entire suite of services you would get out of a bank are replaced by these kind of digitally native offerings?

• 25:41Speaker 02

  100%. I would think you get there sooner rather than later, too. I think like the target example I mentioned, or there's gonna be a time where you can walk into Apple and get a mortgage. And they might do something where like, hey, like, we can give you this right now, but if you buy a new iPhone and you make the payments for another year, we can give you a discount on your mortgage at a better rate and like all these little things based on the extra data that they're gonna have around you. And I, that's me saying, Apple's not gonna become a bank itself, but it's gonna partner with someone like a Goldman, JP Morgan, or whoever, um, and be able to offer that 100, in the next five to 10 years, 100% that's gonna happen.

• 26:19Anthony Pompliano?

  And when you talk about Apple, it almost feels like Apple, um, I'll, I'll make a very crazy connection to, uh, Trump, where Trump kind of went from developer, uh, real estate developer to, wait a second, I'm just gonna use my name and I'm gonna license it and put it on all these buildings and like, now I have a bunch of buildings. It feels like Apple's doing that a little bit in finance, right, where they originally started out building products themselves, usually hardware. They're now moving into services, but in finance specifically, they're just using the IP of the Apple name and slapping it on to all of these services. Obviously, they bet it, but that's really what their strategy seems to be is like, let's use our brand, but use other people as partners to deliver this and to take a piece of, of the business?

• 26:59Speaker 02

  Yeah, essentially, and I'm gonna do two comparisons here to kind of help viewers understand, like, there's different paths to this. So, Apple has pretty much entirely around finance gone with the partnership angle, whoever it might be with. Whereas Uber, we've read in recent weeks, very much tried to build a lot of this in-house. And a week ago, they got rid of a lot of people on their Uber money team. And like the head of it left, they're scaling it down, and they're gonna do things through partnerships instead. And that just shows to me that building things internally is hard, it's expensive, it's time-consuming, and you're probably not gonna end up with a product that is as good as partnering with a firm that focuses on that,

• 27:44Speaker 02

  and that's their core competency, right? Uber's core competency is never gonna be financial services. It's just gonna do that through partnerships now, and I think that's the smarter route for a lot of these companies. I don't think they should end up building a bunch of fintech internally. I think they should do it through partnerships if they haven't started building finance already. And even in some cases, if they already have.

• 28:06Anthony Pompliano?

  Help me understand, like, why is Uber interested in financial services? Like, what's the, what's the advantage for somebody who I wouldn't think as a bank or financial service provider? Why do they want to get into that?

• 28:17Speaker 02

  A lot of it isn't for you and me, it's for their drivers. They could definitely do stuff for you and me in the future, too. But in some foreign countries, their Uber drivers are still paid in cash a lot. It's really dangerous because people will try to rob and kill those drivers because they know there's going to be a lot of money in the car. Other things is getting your payments either right after the drive is done or at the end of the day, rather than having to wait one, two, three weeks to get your paycheck. And that's huge for a lot of them in the sense like they might have to go get a payday loan if they don't get that money right away. So, real-time payments is another reason that that's a big thing. And I don't know that they ever found it as a massive revenue driver. It's just such a competitive market with Lyft and others out there that it was a good differentiating factor for them as well.

• 29:02Speaker 02

  And a safety factor for their drivers, which is something that you really, you don't want lawsuits around stuff like that. That just looks really bad.

• 29:09Anthony Pompliano?

  For sure. What you're talking about is something I call streaming payments, right? This whole idea of like, get paid at the end of the day. And I was shocked. There's a company that we invested in called Bridget. And basically, their whole idea was the top four banks, I think it has made like $8 billion last year in overdraft fees. And so they're, you know, tell us about it. I'm like, well, why is that? And they're like, well, basically what ends up happening is most people who get hit with overdrafts, it's not that you don't have the money, it's that there's a misalignment between, you know, Netflix bill comes on the 12th, you go grocery shopping on the 13th, car payment on the 14th, paycheck hits the 15th. Well, you actually have the money on the 15th, but it was just the, literally, the dates are misaligned. And so what people do is they just budget into their monthly budget overdraft fees.

• 29:53Anthony Pompliano?

  And like, that's pretty insane. So, what they do is they do, I think it's $10 a month subscription. And like, they'll use machine learning to prevent you from ever overdrafting. But one of the things they said is like, look, the holy grail actually is just pay people at the end of the day. Right? Don't wait, like, kind of every two weeks. And it feels like that's much more of a technology problem than it is, uh, companies don't want to do it, or regulations in the way, or anything like that. Is that accurate? Or in kind of just like, how do you think about paying people at the end of each day?

• 30:22Speaker 02

  Yeah, no, it's regulation has a little bit to do with it, but regulation usually catches up afterwards. And there's no reason that a regulator that I can think of would say, no, we actually don't want you paying people every single day. Uh, there would be a lot of backlash for something like that if the CFPB decided to be like, no, this isn't a good idea. Uh, a lot of it is just that when the payment networks that we used were built, like people had one bank account, people didn't need to move money around all the time. Uh, and now there's just so much more urgency around moving your money where it needs to be, getting the money in a timely fashion. And these old networks just weren't built for stuff like that. So you kind of have to build things around the networks to make it so that can happen.

• 31:06Speaker 02

  So one example of kind of in this area is Chime pays you two days early and it's not really, it's kind of giving you a loan, but not really. It's just that the payment takes so long to go through at the bank that the bank's just holding on to it for two days before it shows up in your account. So they're just taking away that lag time. So it's not like they're doing anything magical or whatever. It's just they built around the rails and give you the money faster. Um, and I think you're going to be seeing more of that both from the company level as well as some government agencies, both in the U.S. and international are focusing a lot on real time payments as well.

• 31:39Anthony Pompliano?

  And it feels like maybe Venmo is doing something similar where you can basically not pay anything and take three to five business days to take money from your account into your bank account. Uh, but you could pay like one or two bucks and they'll do it instantaneously. And, and so is that kind of similar in terms of just, uh, trying to remove friction from the legacy system, uh, through these, uh, fintech companies?

• 31:59Speaker 02

  Yeah, that's very similar. And I think that fee that Venmo and other charge will get super competitive and will, it won't go down completely to zero, but it'll basically be at cost for whatever it costs Venmo and others to make it. So it gets there within a few hours versus waiting, like you said, two, three, four business days.

• 32:17Anthony Pompliano?

  Uh, lending, what are you seeing there and kind of who are the players?

• 32:22Speaker 02

  Lending the last few months has been intense, just like in terms of thinking about who you lend to and everything. No one can underwrite in this environment. Not for businesses, not for people, nobody. Like what do you, any credit model you had before COVID hit, you might as well just throw that out the window because it does not matter right now. With like thirty plus million people unemployed, no restaurant's able to open in a lot of markets. And even if they do, they can only open at certain capacity and whatnot. You can't underwrite in that and companies, Square stopped underwriting loans. The only loans they've been doing are PPP loans for the past few months. Because their internal signals were like, it sends like this red signal out when it's

• 33:02Speaker 02

  like the system's saying like, you know what, it's getting really hard to underwrite based on these signals right now. You might think about slowing down a bit. They ended up having to completely stop. Same thing with Cabbage. Cabbage ended up laying off or furloughing a bunch of their staff and just doing PPP loans. Because it's just like, there's no way to tell right now. You also have to remember in lending, there's a lot of questions you're not allowed to ask. If, if you could walk into a room, not even see the person that you're lending to, but ask all the questions you'd really want to ask, putting regulation aside, it would be a lot easier to underwrite than what it is right now. And that's both good and bad things. So like race really shouldn't matter. What kind of job you have, whether it's service or not, really shouldn't matter.

• 33:45Speaker 02

  But like service in particular right now, it matters. Because that person, if they're a waitress, they might have a good credit score from working a lot before, but right now they're not making a lot of money. And you can't really underwrite to that because you aren't going to be able to tell as quickly that they're not earning money right now. Like your credit score is not going to factor that in. If they've paid off their credit cards and paid off a mortgage before because they were making money, uh, but you're not allowed to know if they're service now. Certain, you can't know what zip code they're, you have, you can know what zip code they're in, but there's certain rules like zoning laws where you can't be like, well, you know what? This is a really bad area. It's got like government housing and everything. You really want to be careful about lending them. You can't use that.

• 34:26Speaker 02

  So like, there's just so many factors right now making lending very hard. That I think some of the alternative data and big data that we talked about earlier is like extremely important right now. And even, I mean, I just feel for people like immigrants and everything too, because it was hard enough for them to get credit scores in the first place. And now it's going to be that much harder because you want to be so careful around different things. So yeah, lending is a little bit of a mess, but I do feel like having gone through a lot of this, it's going to come out stronger on the other side. It's just there's going to be a lot of them that get weaned out along the way.

• 35:05Anthony Pompliano?

  Yeah, it's really interesting to hear you talk about it because it almost feels like, I don't know, 20 years ago, there was very little data and people were basically having to rely on the person who wanted to borrow money, what information they gave them, maybe they could verify some of it, but like super bureaucratic, super slow. There was this like big swing towards, oh my God, now we have all this data on the internet, like give it all to me. And now it almost feels like we're kind of getting back to some level of equilibrium where people are being told, hey, I know you have access to all that information, but you can only use some of it for the underwriting process. Is that accurate?

• 35:39Speaker 02

  Yeah, yep, you can't use everything you know about the person for the underwriting process.

• 35:44Anthony Pompliano?

  Yeah, and, and I guess, how, how does that change today, right? So like, what, what are the regulations that some of these lenders are facing in terms of, you, you mentioned alternative data, like every day it feels like there's new, some new source, some genius somewhere comes up with like, oh, well, if I, you know, get the zip code and then I get this piece of data and get this piece of data and my machine learning model comes up with, you know, this ranking and they start to use it, like, how does that regulation work and kind of, what, what do you see as the frustration from the fintech company side in terms of interacting with that regulation?

• 36:15Speaker 02

  Yeah, I think you're going to have to have, there's certain firms like Tala and others that focus a lot on alternative data. And you can like outsource, like white label that software to make it so other places can better underwrite as well. Other things, we, this was our topic in Fintech Today this past week is you've seen the Apple Card start a program or if you don't get approved the first time, they'll walk you through something and give you tips to improve your credit score and hopefully get approved again in four months' time. Like every week, every month, I forget what the exact timeframe is, they, they email you new tips and everything, just to like, no one fully understands like why their credit score is what it is, right? And your credits, you could have two people with the same credit score, same eight hundred,

• 37:00Speaker 02

  but if they have four pieces of credit history versus twenty pieces of credit history, the twenty piece credit history is way better off than the other one because they've shown twenty times that they can make payments and like manage their finances and everything. So in a way, like the eight hundred at twenty, or you could make that like seven hundred at twenty versus the eight hundred person at four and the seven hundred is gonna get approved and you're like, wait a second, like my credit score is a hundred, hundred more. Why am I not the one getting approved? So that's why, like, in the future, no one's gonna understand how everything works and you're gonna need these firms both to the business and the people like you and me or businesses, like, hey, like, why, why am I not getting approved of this? Can you like explain to me, help me figure it out?

• 37:44Speaker 02

  So you have programs like Apple's doing that, Chime just rolled that out too. It's sort of, so, one is to better understand, two, a lot of their customers, a lot of neo-bank customers are younger and younger people don't like using credit cards. So it's a debit card that's disguised as a credit card, kind of. You put money from your checking account in there and you can only spend that amount of money. So you're building credit history by using it, but you're also not allowed to go overspend and all of a sudden you have like five thousand dollar credit card bill and you're like, oh my God, why did I buy all that stuff from Bloomingdale's or whatever it might be? So I think those are two separate areas. So like alternative data and explaining to both the business and the consumers, like both sides of the transaction,

• 38:27Speaker 02

  why things are the way they are. And then I think also helping people build their credit. Um, is going to be another area that is very beneficial in the future. Cause financial literacy has been a big thing in fintech for a while. There's so much more that we can do in it that we aren't doing. And to be honest, it's almost been helping the wealthy more than it's been helping the non wealthy. Cause they'll try to charge for their financial literacy and all these kinds of things. So it's like, there's gotta be a better way to do it. And I think fintech 2.0, if they want to call it that, is going to be an area where that's something that a lot of companies focus on.

• 39:05Anthony Pompliano?

  And, and it almost feels like, uh, it's a win-win, right? In the sense of you're helping the user and then you're also getting them in a position where you have more comfort, whether it's lending to them, having them as a customer, whatever, right?

• 39:17Speaker 02

  Right, yeah, I, I mean, if they're better able to underwrite and they're not going to have as many losses, that's a win for the company. And if the customer has a better experience with them and is able to be more comfortable using more financial services products, then that's a win for them as well.

• 39:33Anthony Pompliano?

  How do you see, uh, things like loyalty points and kind of all of the other perks that are, uh, they're economic in some sense, but really they're kind of marketing, uh, schemes? How, how has, uh, that intersected with the fintech world or, or maybe it hasn't at all?

• 39:48Speaker 02

  Yeah, that's something I actually haven't thought of too much. I think the fintech last couple of years, our idea of loyalty points was these high interest savings accounts. Because after the financial crisis, you get like 0% on your Chase checking in savings. And then all of a sudden Marcus and others, like, we can give you 2 plus percent interest rate on your savings account, come here. So that was almost our idea of loyalty points the past years. Now that interest rates are lower, if they want to have some idea of loyalty points, they're going to have to figure out something else. Cause I think the best out there right now, my Marcus account, I think is still like 1.2 or 1.3, but it was all the way up to like 2.5. So it's easily been cut in half. And then there's other ones that are even lower than that at this point.

• 40:32Speaker 02

  Um, so maybe, maybe that's something they should be thinking about, new ways to get loyalty points.

• 40:37Anthony Pompliano?

  Are, are they basically putting it up high at like 2.5% to incentivize users to join? And then like intentionally bringing it down? Or is that actually tied to things like interest rates and, and kind of the more macro, uh, economy stuff?

• 40:51Speaker 02

  It's mostly tied to interest rates in macroeconomy. So I actually didn't know this at first when I started covering this, but you're not allowed. So say I am Marcus and my partner for that is giving me 2% on the money that I'm giving to them. I can't go lend that out at 2.1. I can lend it out at 2 and lose money with like all the stuff that goes on behind the scenes, but I can't give the user a higher interest rate than what I'm getting on that product. So it's like other places are just keeping that interest rate money for themselves. So that's why when Marcus lowered it, it wasn't like because they're just like, oh yeah, we got you in, let's lower it now. It was because they literally legally had to lower it.

• 41:33Anthony Pompliano?

  Got it. So obviously that's kind of a negative side effect in some way of this economic kind of shock. Another thing that presented itself was this opportunity around all the PPP money that was going to be handed out. There was plenty of legacy banks that were, you know, kind of primed and ready to help facilitate getting that into the hands of businesses and people. But also fintech companies seem to have stepped in. So like, what did you see in terms of those fintech companies kind of scrambling to try to participate and capture some of that upside?

• 42:01Speaker 02

  Right. So they scrambled to help with the first round. But if you remember, the first round, the money was gone in like two or three days and they basically got approved on the last day. So I don't think if Square and those guys were able to do a loan, it was probably like five loans or something like very negligible. But they, since the money went so fast, they rightly assumed that there's going to be another round of this. So they continued building and making sure everything was ready. And lo and behold, I forget what the timeframe was in between, but I think it was like one or two weeks and then the second round kicked in and there's still some money left in that round. They just extended it. And they, if you go on Jackie Reese's Twitter feed, I haven't checked it lately, but she tweets out recent updates. Square will report earnings again in about a month and I'm sure they'll talk about it a lot on there.

• 42:46Speaker 02

  And I mean, it was a big scramble behind the scenes, but it was also. Something that was both a smart business decision and a smart decision just for like the US economy as a whole, like Square and Jackie are very passionate about the small businesses that they help fueling our economy. Again, meeting some of the people that use their product and have helped from it. So it's it's both like a business purpose as well as like internally just like feeling good about what they're doing. And employee morale, obviously, if employees on Square Capital team are saving small businesses in America through this program, they're feeling pretty good about their jobs and they're not going to leave anytime soon. But it was a scramble behind the scenes and something that we didn't realize as consumers

• 43:30Speaker 02

  is that the guidelines for it were just changing, not by the hour, but like the day. So you'd be building this product and then all of a sudden the guidelines change and it's like, all right, I guess we basically have to start from ground zero again. And that just happened constantly and you're redoing a bunch of different things. So they were working weekends. Square even did something where people on other teams could volunteer when they weren't working on their other team to help the Square Capital team. Like that, it was just all hands on deck on this. Cause like, in a way, this was kind of fintech's moment to be like, we're a level playing field with JP Morgan and Citi right now. Like, we're just, we're not just startups that like are over here doing their own thing, not a big deal. Like, we are helping save America right now and we are not going to

• 44:15Speaker 02

  miss this opportunity. They weren't going to let that happen. So that's like a perfect example of fintech really stepping up to the plate. And from what I've seen so far, I mean, the program's not over. People have to like go through repaying and like all these different kind of stuff. But in the initial scenes, looking at it, like, I think they did really well.

• 44:37Anthony Pompliano?

  Yeah, it's, it's really, really fascinating. We've talked a lot about companies based here in the US and kind of going internationally. But what's going on internationally in terms of companies that started out there, may either be trying to come to the US or just kind of staying in their home markets?

• 44:53Speaker 02

  Depends on what they do. So a lot of the neo-banks that started over in the UK are trying to expand, or not just UK, but like UK and Eurozone are trying to expand. And it's just because the market is pretty small there. If you look at Asia, things like Alipay and stuff, they're pretty fine just staying over in Asia. There's some things where they want to make it so Alipay users in Asia can easily be able to use Alipay in the US and Europe and elsewhere. But they don't really need to have big ambitions to like take over the US market either. Um, and even the neo-banks that are now moving into places like the US from overseas. I don't think they necessarily think that they're going to overtake neo-banks that are also here. They just wanted to increase their customer base and

• 45:38Speaker 02

  I don't know that it's really working that well or that there really was that large of a market that they could target here. Um, just given that the banking system in the US isn't terrible like it is in a lot of other company, countries. Like one of the reasons New Bank in Brazil does so well is the banking system is pretty shitty in Brazil. So there's a lot more growth opportunity there. Then they just expanded to Mexico about a year ago. I'm sure they'll try to expand to another market and stuff too, but like usually when you start in a certain country, that country is always going to pretty much be your bread and butter.

• 46:12Anthony Pompliano?

  Makes sense. Uh, what about supporting multiple currencies? So a country, obviously, if I start in the United States, I support the US dollar. I don't really have a huge need to support other currencies. Uh, but the second I start to go kind of international expansion from my home country, that becomes an issue. Like what, what have you seen there?

• 46:28Speaker 02

  Yeah. So places, places like Stripe and Adian and others, they all have to have multiple currencies available for processing on their platform because they're going to have users that are buying things from other countries and businesses they want to support in other countries. Um, same thing with companies like PayPal and others. Um, and one thing I've been looking into lately, especially just given the remote work trend, is they might have employees that end up moving to other countries or hiring more in other countries because it's like, well, you're not going to be coming to the off, the office anyway. So if you want to move to Canada, you want to move to Europe, you want to move to Mexico, like we still want to keep you as an employee. And there's a lot that goes on behind the scenes in terms of

• 47:08Speaker 02

  moving the money between country and country. Like if you go to your bank in the US and you want to send money to someone in Mexico, it's like five different banks that end up handling that transaction. It's not just my bank that I directly go to and then the bank that that person goes to. So that's something I think there's a lot of room for innovation from and you see a lot of earlier startups in that space looking to be like hire anywhere in the world you want, pay your suppliers anywhere in the world you want, like make it fast, there's not a ton of fees, all these different things. I think that's an area of payment that hasn't seen as much innovation as like online payment processing.

• 47:49Anthony Pompliano?

  All right, that brings us to crypto and Bitcoin. What the hell is going on there in the fintech world?

• 47:58Speaker 02

  Oh, sorry, you broke up for one second there. Say that again.

• 48:01Anthony Pompliano?

  I said that brings us to Bitcoin and crypto. What the hell is going on there in the fintech world?

• 48:07Speaker 02

  It's been pretty stable shockingly. I check it like once a week or whatever because when it's SoFi, when they launched crypto, said if you bought $10 of Bitcoin, they would give you 25, I think. I was like, I haven't owned any Bitcoin. I'll buy $10 of it and get 25. So I kind of like randomly looked to check it out. I think my $35 is worth like 45 or 50 now. So I'm up on it a little bit. But it's stable and I think that's a good thing. And I think you would, I should ask you this question. What's going on in Bitcoin and crypto? You're gonna have a better answer than I would on this one. But I think the stability is good because it shows that there is more of like the volatility just made it so it was just gambling and people like the the version of crypto that was happening before was like the stuff on Hertz

• 48:52Speaker 02

  when it was going bankrupt and all these Robin Hood traders and day traders were like, oh, well, like we're just gonna buy a bunch of this just in case. Like that was crypto a few years ago. They're like, oh, like everyone's getting rich on this. I'm just gonna pile on it. Like true crypto believers don't want that to happen. So I think the stability and everything has been good. I think something to watch would be Facebook's Libra or it's renamed or something now too. See, like I need to focus on.

• 49:19Anthony Pompliano?

  They renamed the wallet from Calibra to Novi, I think it is, which Mike Novogratz swears is because they named it after him. But we'll let him keep thinking that.

• 49:31Speaker 02

  That should be good luck, though. No regrets is done pretty well in the crypto space. So maybe they did as a good omen for the future of it. Um, but yeah, I think that's important to watch both from um, an intra consumer interest in it as well as what governors and regulators across the world end up doing with it, too. Because that I remember one of the final things I did at Bloomberg was help cover that and go down to DC to see David Marcus testifying, um, David, uh, Mark Zuckerberg go testify. And a lot of the skepticism that they faced here is same things that they faced in other countries. But this isn't necessarily a bad thing. I think you should have a lot of skepticism because this is something that could become really big if it indeed worked. And we want to make sure that we do it right.

• 50:15Speaker 02

  Um, but I think that's kind of what I'm focused on in this space now, too. You do see more companies adding crypto to their platforms. Like I think PayPal and Venmo added the ability to buy or sell Bitcoin on there. Square did that years ago. Um, Robinhood did that a few years ago. We did a story on that. Um, and I think it's something that they're realizing might not be like this massive thing for them right away, but there's potential for it in the future and you don't want to be caught like off balance. But oh, well, we should have been building this two or three years ago. And now we have to play a lot of catch up. That sucks.

• 50:48Anthony Pompliano?

  So we've definitely seen Square print, I think it's nine figures of revenue on a quarterly basis. I believe now we're uh, off Bitcoin alone. Um, any idea how Robinhood is doing uh, when it comes to the crypto part of the business? And then also, if if they're doing well and then Square kind of doing very well, uh, does that serve as kind of this like example where the people say, oh, well, if they're doing so well, like we have to get in that game because we don't want them to take all the profits?

• 51:16Speaker 02

  Right. I don't think it's quite there yet, but it definitely those would be ones to watch. If all of a sudden it did take off in there, you'd 100% see others quickly doing that, too, rather than kind of passively researching it. Um, for Robinhood, since they are private, it's hard to tell exactly what the numbers are. But from my understanding, their biggest revenue driver comes from the options trading on their platform. And then you have stocks and crypto has never been really huge for them. People still think of Coinbase and others as their main trading for that. And I don't know that they ever thought it would be huge. Maybe since they built it right when Bitcoin was going crazy, they initially did. But I think it became apparent fairly quickly after that, like, okay, this isn't going to replace the revenue from our other things.

• 51:59Speaker 02

  It's always going to be a revenue generator, but it's not going to be like the same thing as options trading, at least at the get go.

• 52:06Anthony Pompliano?

  Want to play a game of lightning round questions. The first one is, what is the biggest surprise over the last four months during this economic shock?

• 52:16Speaker 02

  The biggest surprise? Oh, man.

• 52:21Speaker 02

  Um, I think the biggest surprise for me is the interest in people in trading. In some ways, it shouldn't be that surprising because people can't gamble right now and they they're bored and do nothing to do and their friends are probably starting to trade. So it's a word of mouth thing. But just the massive amount of trading we've seen, I think it was, I forget it was E-Trade or Schwab or who, but in one of their most recent earnings reports or investor releases, talked about how in like the past two or three months, they saw more trading than they did all of last year. And that's an established platform. It's not one that's just popping up where like a startup, of course, you're going to see that kind of growth. None of those firms that I just named, they're all public companies.

• 53:04Speaker 02

  They're not startups that are gonna see massive growth. So that I think that's the biggest shock for me.

• 53:10Anthony Pompliano?

  What are the two trends that you're looking at and paying attention to that people wouldn't expect over the next year?

• 53:17Speaker 02

  Hmm, I think general, so that we both get caught up in like the fintech world. So it's hard to imagine what like a person that isn't in this space would get surprised by. But I think the white labeling software thing that we talked about where you could walk into a Target or an Apple and apply for a mortgage, I think that's something that we should watch is going to happen. It would be very surprising. Um, and then the other one I would say is probably.

• 53:42Speaker 02

  I like the trend of payments overseas with employees because I think there are going to be a lot of people that maybe if Donald Trump gets reelected and immigration policies stay super strict and there's a lot of companies that want to hire engineers overseas, they're gonna have to figure out a better way to pay them and have these systems. And even if immigration does get better and there's people that just want to move to Canada, Mexico, wherever, and want to keep working at their company, you're still gonna have to figure out a way to pay them. So I think that's the other one that is a trend that I'm watching that you could see a lot of innovation in over the next five to 10 years.

• 54:18Anthony Pompliano?

  Obviously, fintech today is excluded from this question because it's so great. But what is the one place where you get information from or person that you follow online that isn't very well-known but you feel like has a really good pulse on others?

• 54:33Speaker 02

  I have to go to bat for my colleague Jenny Serain at Bloomberg. No one understands payments in a number of areas of fintech better than that girl. There's a data piece that she did for Bloomberg a couple of years ago explaining how payments work, like the massive system, like the merchant bank and everything. And Stripe literally sent that out to employees to better understand payments at one point. So the fact that this reporter is like doing this little data thing and Stripe, like one of the biggest payments companies in the world, is sending that out to their employees, like she's one that I think has a really good pulse on it and does a lot of good deep dives and not just like fast, quick hitting pieces and stuff too. And she's not like, when we think of fintech reporters, we think of Nathaniel Popper, Rudy Gere, all these others.

• 55:18Speaker 02

  She's not a name that comes up that much and she really should.

• 55:22Anthony Pompliano?

  Julie, you know, we'll put the plug in there. Last question for the lightning round before we go to wrap up is what has to happen for Bitcoin to become more prominent in the eyes of what I will call the legacy fintech media?

• 55:38Speaker 02

  I think legacy fintech media you said?

• 55:41Anthony Pompliano?

  Yeah, so like on the media side, there's obviously all the crypto dedicated publications, but in the more kind of traditional finance publications, what are the things that should happen that you think will drive more attention?

• 55:51Speaker 02

  Yeah, I think the stability has to continue because one of the worst things that happened for like the fintech media coverage of it was the craziness that happened and then all these like pop up online publications that happened around and wrote kind of like crazier stories. So I think stability and some more like mainstream usage and everything too. It doesn't have to be like me going to a coffee shop and being able to buy Bitcoin, but just like more use cases that I'm like, all right, like that makes sense because Bitcoin, as easy as it is for some to understand, and still very complicated for others to understand and they don't realize like why it has any value in the first place. Like if I asked my dad about it, he's like, why is Bitcoin worth more than gold? Like gold's something I can hold and it has value and everything. So I mean, there's just like,

• 56:37Speaker 02

  there needs to be more apparent use cases for many people to be able to understand it. And I think that and the stability is going to be what's going to get us to the next level of Bitcoin, kind of like being here to stay.

• 56:48Anthony Pompliano?

  I finish up every episode with the same two questions, then you get to ask me one to end it. First one is, what's the most important book you've ever read?

• 56:56Speaker 02

  Most important book I've ever read?

• 57:02Speaker 02

  How to Win Friends and Influence People. That was a really good one. And I forget exactly when I read it. I think it was like my last year of college. And it just really, it helped me realize that like, people are always willing to help you, but you have to think of what, like what their KPIs are, what's going to make them look good, what's going to make them feel good. Because if you do that, there's a really good chance, like if you're empathetic towards them, they're going to go to bat for you, you're going to do a good job for them, that kind of thing. Same thing, like making your boss, what's going to make my boss look good? Because I want to do something that's going to make my boss look good and you're going to win every time.

• 57:41Anthony Pompliano?

  Simple stuff, but important. Aliens, believer or non-believer?

• 57:47Speaker 02

  I didn't see this question coming. I don't know if I would call it aliens, but like UFO type things or like things the world like hasn't seen or understand 100%. Yeah.

• 57:59Anthony Pompliano?

  What about like intelligent life off of Earth?

• 58:03Speaker 02

  Hmm.

• 58:06Speaker 02

  In terms of like, maybe, I don't know if I think of like, people off the earth, but like, other kind of creatures and animals, I would say, yeah.

• 58:14Anthony Pompliano?

  I feel like if there's other humans somewhere, we would be really freaked. Like, we're actually more ready for aliens than just like, oh, there's humans on this other planet.

• 58:23Speaker 02

  Probably, probably. But weird, I mean, 2020 has already been weird, so maybe that's the next shoe to drop, we're gonna find that out.

• 58:30Anthony Pompliano?

  What is it, eight weeks ago now, uh, the US government confirmed those UFO videos from a while ago, and everyone's like, wait a minute, why are they doing that in the middle of a global pandemic? Just like, oh yeah, those were real.

• 58:40Speaker 02

  Man, I ended up watching World War Z like, three to four weeks into the pandemic, oh my god. Like, well, at least coronavirus doesn't like, make you turn into a zombie in 10 minutes. But hey, this is still pretty, pretty crazy stuff.

• 58:54Anthony Pompliano?

  I love it. You can ask me one question to end. What, uh, what question do you have?

• 58:59Speaker 02

  What are, what are your thoughts on crypto lately? I haven't been able to talk to you about it for a while, and the last time I really asked you anything about it was when it was like, Goldman Sachs was looking at trading it, and it was at like, 20 grand, and all these reasons. What do you think makes crypto mainstream, or what are the use cases you're seeing for it?

• 59:17Anthony Pompliano?

  I actually think it's doing exactly what it needs to do, which it kind of sounds weird, because I think everyone, uh, in the last full run, like, kind of came in and was like, oh my god, price, price, price, price, like, what's going on in US dollar value?

• 59:30Anthony Pompliano?

  The two stats that I pay attention to are, uh, the computing power, so the hash rate, uh, that actually runs the network, continues to grow, you know, pretty exponentially in terms, or not actually exponentially, but like, very, very fast. Uh, and so it's some, uh, years, it's four to 10x, you know, type growth, like, pretty impressive. Uh, and so that's just like a security and like, the economic incentive to run the software is there, and like, that's continuing to become more and more attractive to more people. Uh, the other one is how much Bitcoin has not moved in the last 12 months. And so, uh, if you think of Bitcoin, a lot of people, I think, think of like, the use cases to go spend it, but because it's a deflationary asset, like, holding it actually is a use case, right?

• 1:00:15Anthony Pompliano?

  Because you're protecting your wealth, like, it's inflation, all this other stuff. And so, uh, at the end of June, I think it was like, 61 or 64% of Bitcoin that's in circulation has not moved in the last year, and that's the most ever. And so it's kind of like this thing of like, okay, like, I think that's trending in the right direction. Now, a lot of people will argue like, okay, if no one's actually spending it, then like, how does it become a gold reserve currency? And like, there's all of these like, second and third order effects of that. But to me, it's just like, I actually look at holding as more important than spending right now. And it's mainly because if it is going to become important in the world in the way that many people think it will, like, it's got a lot

• 1:00:56Anthony Pompliano?

  of growth to go in terms of US dollar value. And so people holding it signal they think it has future value. If people weren't holding it, then like, it's kind of just going to go sideways in US dollar terms like forever, right? And so like, okay, now I can spend it. And so I tend to think those are the two metrics. And like, at this point, I have, I'm so far in the rabbit hole, like, I could just be super biased. And like, those are two positive data points. So like, you know, I'm like, oh, those are important. But I think those are the ones I pay attention to, and seem to be going in the right direction.

• 1:01:27Speaker 02

  Cool. So I was right on the price stability thing. That's good. That's reassuring.

• 1:01:30Anthony Pompliano?

  Yeah, yeah. I mean, look, part of it is, so I've had people, Jason Calcanis, obviously, investor in Uber also, when I told him, he's like, wait a second, you're telling me the last two years, like Bitcoin's gone from like 3,000 to 10,000, and basically just swings back and forth in a $7,000 range. And I looked at that, it's like, that was a negative. He was like, oh, man, that's amazing. He's like, that's way more stable than I thought it was. And it's like, you know, so you got to kind of question like, what is stability? But I think you and I kind of think of it as like, all right, if you're, you know, kind of trending in like a $1,000 range, like, that's better than a $7,000 range. And so, you know, we'll be all right. Where can people go find you on the internet? And where do we want to send them? The Fintech Today or somewhere?

• 1:02:14Speaker 02

  Yeah. So my Twitter handle is just at Julie Verh, so super simple. And then on there, you'll see a bunch of stuff from Fintech Today. And whenever I tweet out my weekly newsletter, I put in the link to subscribe because I only do the monthly subscription one, which is $25 a month. So not super expensive. You get a lot of good stuff. I interview VCs and stuff in there to kind of keep a pulse on the space. So your goal is to keep you one step ahead of everybody else.

• 1:02:41Anthony Pompliano?

  Awesome. Listen, thank you, Sash, for doing this. I think you are one of the leading minds in all of this stuff. And I'm happy that you, even though you left Bloomberg, you're still writing about it. So thanks so much. I'll do it again in the future.

• 1:02:53Speaker 02

  Yeah, fintech can't get away from me for too long. So thank you so much for having me on. This was so much fun. I look forward to tweeting about it and seeing what the impact is.