#1405 Will Reeves | Bitcoin Company With 1,000 Bitcoin Is Going Public?!

Will Reeves is the Founder & CEO of Fold, a gateway to earning, buying, and living on bitcoin. Fold is now going public via SPAC deal, and it’s estimated that they will be in the public markets with over 1,000 bitcoin on their balance sheet. In this conversation, we discuss what the business is, how they executed the Microstrategy bitcoin playbook in the private markets, what their products are, and what he thinks will be built in the future. ======================= Gemini is the safe and secure way to trade crypto. Gemini is offering eligible new users the opportunity to earn $100 in BTC when they trade $1000 in crypto within their first 30 days of signing up. Head over to https://www.gemini.com/partners/pomp and start trading crypto to earn $100 in BTC. ======================= CrossFi is the Apple Pay for Crypto. For the first time in history, anyone with a web 3 wallet like Metamask can spend crypto through a physical or virtual visa cards anywhere in the world where Visa is accepted. Be one of the first to get your hands on a CrossFi card and a prize pool of $3 Million Dollars by joining and participating in their testnet today: https://xfi.foundation/users ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

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

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's up guys? Bang, bang. I've got a great episode for you today. We have Will Reeves, the founder and CEO of Fold. Fold is a brand new Bitcoin company to the public markets. They've been around for a while. They've got a number of great products that help individual users

• 0:45Anthony Pompliano?

  acquire more Bitcoin in a variety of different ways. Fold launched early on. It is really cool game that everyone probably remembers. You could go take it for a spin and win a little bit of Bitcoin. But what looked like a game to first start now has become a very serious business. Fold is going public via SPAC transaction, and it is estimated that they will be in the public markets with over 1,000 Bitcoin on their balance sheet. This conversation with Will breaks down what the business is, how they've executed the micro-strategy Bitcoin playbook in the private markets, what their products are, what he thinks can be built in the future, and what you should be looking for as a Bitcoin company goes public. I always enjoy talking to Will, and this conversation was no different. Here is my conversation with Will Reeves.

• 1:28Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:52Anthony Pompliano?

  Today's episode is brought to you by Gemini. Gemini is a fantastic platform. How do I know? Because I've used it for years. These guys get it. They right now have a special offer where they are offering all eligible new users, the opportunity to earn $100 in Bitcoin. That's right, 100 big ones. They're going to get out in Bitcoin if you go and you trade $1,000 in crypto within the first 30 days of signing up. What is Gemini? Gemini builds crypto products that are simple, elegant, and secure. Tyler and Cameron Winklevoss, the billionaire Tyler and Cameron Winklevoss, founded Gemini in 2014 with the security-first mentality and ethos of asking for permission, not forgiveness. They've been pioneers for the crypto industry since day one.

• 2:37Anthony Pompliano?

  And unlike many exchanges, they are available in all 50 US states. Gemini has tools for new and advanced traders. They've got an advanced trading platform called Active Trader, which is where crypto traders go for advanced charting tools, access to over 300 crypto trading pairs, and multiple order types to trade the way you want. Head over to gemini.com/partners/pomp and start trading with Gemini today to earn $100 in Bitcoin. That's right, Gemini will give you $100 in Bitcoin if you head over to gemini.com/partners/pomp and you trade $1,000 in crypto within the first 30 days. Today's episode is brought to you by CrossFi. CrossFi is the Apple Pay for crypto.

• 3:22Anthony Pompliano?

  For the first time in history, anyone with a Web3 wallet like MetaMask can spend crypto through a physical or virtual Visa card anywhere in the world where Visa is accepted. No more exchanges or middlemen. Just link your wallet, get your card, and start spending today. CrossFi card transactions have already been successfully processed in New York, Los Angeles, London, Dubai, China, Japan, and over 20 other countries. Be one of the first to get your hands on a CrossFi card and a prize pool of up to $3 million by joining and participating in their testnet today. You can go to xfi.foundation users. Again, that's xfi.foundation users. Go check it out today. All right. So I thought we could start this conversation with Fold is in a very

• 4:06Anthony Pompliano?

  unique position where you all as a business are trying to stack as much Bitcoin as you can, but you're also building products and services to help your customers stack Bitcoin. And a lot of people would look at that and say, wait, aren't those kind of at odds with each other? Isn't this a zero sum game? But I think Fold has very interestingly kind of walked that tight rope very well. And so maybe what we could start is, everyone knows MicroStrategy and the public market Bitcoin, kind of treasury strategy. You all have been quietly in the private market, deploying a very similar strategy. And so walk us through like, what is the private market Bitcoin strategy that you all think is quite powerful?

• 4:42Speaker 02

  Yeah, I think, you know, first, when we started Fold, you know, things start from a much simpler level. And it's, hey, I think people need more Bitcoin. Let's find ways to integrate Bitcoin into personal finance that enriches customers, enriches our friends, our family. These products didn't exist. Traditional banks are not jumping in. We don't expect them to jump in for a while. And so we built a product that you can think of it as an alternative to your bank. You can hold your dollars there. You get cards to spend with, you can pay bills. But throughout the whole thing, we sprinkle Bitcoin into this to improve the experience, to upgrade your banking. So every time you use Fold, you earn Bitcoin for spending, you earn

• 5:23Speaker 02

  Bitcoin for paying your bills, you can buy Bitcoin, you can get paid in Bitcoin, and all of it is up to your, to your levels. Do you want to go, do you want to go big? Or do you want to start small? And Fold is a bank that essentially allows you to do, or a banking platform, I should say, that allows you to do all the things you need to do with dollars, but integrates Bitcoin all these really smart ways. And what we saw was, over the last four or five years, our customers have earned over $45 million in Bitcoin through rewards. If we had distributed that in cash, they would have just shy of 20 million. So Bitcoin has made a tremendous impact. Some customers have more Bitcoin in their rewards accounts than they

• 6:05Speaker 02

  do in their savings accounts. And in this day and age, when purchasing power is going down, when savings are going down, that's a An incredible tool to have at your disposal. And so we saw this was tremendously successful for our customers. And we also saw that, hey, we're generating Bitcoin natively through the course of our operations as a business. People pay us in Bitcoin. We are earning it ourselves. And so we have a tremendous opportunity, just like our customers, to build our own Bitcoin treasury. And when we saw these things come together, we saw that they weren't mutually exclusive or even competitive, competing against one another. We could create a business where our customers stack and we stack Bitcoin. And overall, we're both going to be in a better spot.

• 6:47Speaker 02

  And so, you know, that's where we learned from just running our business. So we had a great way of building a treasury. But then we were able to see the likes of MicroStrategy and Michael Saylor really pioneering all these new techniques on public markets. And so we said, okay, well, we're not a public company yet, but what can we do today? To start using some of these tools that we've learned and bring it into our toolkit. And so we accelerated our own treasury building with financial engineering, selling equity into the company by taking on Bitcoin, earning Bitcoin through Bitcoin native revenues. And between that, as a private company, we've come out with a, you know,

• 7:29Speaker 02

  a large treasury that I think it really is the culmination of a business model that people love, business that people love. A business model that is generating Bitcoin every day. And then second of all, using smart and creative ways to use capital markets to stack Bitcoin into your treasury.

• 7:47Anthony Pompliano?

  And so what have you guys seen? You put Bitcoin on kind of your balance sheet. Bitcoin obviously has been going up over the long run. Does it change anything about the way that you operate the business on a day to day basis? Or I think the way MicroStrategy has kind of presented this is like, hey, we have our data business, our analytics business. And then we have our treasury strategy. Obviously, they benefit from each other. There's, you know, some cash flow. And then there's the Bitcoin kind of growing in value, but it doesn't sound really like a lot of the kind of their core traditional analytics business has changed because of Bitcoin. How do you see that? Are you guys actually operating the business differently than maybe you otherwise would if Bitcoin wasn't on the balance sheet?

• 8:27Speaker 02

  So in some cases, yes, I mean, we've been, we were founded in 2019. So we saw, we've been through a cycle already. We've seen, we've seen the ebb and flow in this. And being a Bitcoin company that's heavily dealing in Bitcoin, you need to be as comfortable with the volatility upside as you do to the downside. And so there are some, in some respects, you have to run the business slightly differently. You do, should look at these as almost two product lines that you're, that you're developing. You have your, you have your treasury and you have your operating company. Now, for us, you know, we're receiving, our operating company is receiving Bitcoin as revenue to us. So we have the option of, you know, by traditional company might flip that immediately into cash.

• 9:12Speaker 02

  Us, we can let that sit into Bitcoin, get some of the upside over time. But at the same time, we have bills to pay and those are denominated in dollars. And so we're always making sure that we are servicing the operating company, which is essentially building the treasury. That is the tip of the spear that has brought us to where we are today. But I'd say the only thing that we've operated differently is started to look at our treasury as a separate even product that really services our shareholders and services our company to give us longevity, to give us security over the long haul. And so I think it's only expanded our understanding of how to think about our business. And then the second is, okay, well, what happens when you've built a significant treasury?

• 9:57Speaker 02

  You have inflows over time. How can that then flow back into the operating company as value? And what can you do with that Bitcoin? Or how can that provide value back to your end customers? And I think that's where seeing that full cycle, you start to look at, you know, what companies look like on a full Bitcoin standard? You said, you know, you mentioned MicroStrategy. There, they're tremendously separate concepts, right? The MicroStrategy's core business really has nothing to do with Bitcoin. It really doesn't matter with Bitcoin going up or down. So for us, we look, okay, we're not only doing the micro strategy playbook in private markets today and public markets later.

• 10:36Speaker 02

  But we also have this other really interesting element where the treasury can flow value back to the operating company and the operating company can work to accumulate more Bitcoin of the treasury.

• 10:44Anthony Pompliano?

  Now, you've taken this a step further with some of the products that you've built. I remember maybe the first thing that I interacted with at Fold was the game. And so maybe talk about like, you start out with the game and now you're moving into much, much more serious kind of products. And maybe you can kind of describe how Bitcoin being inserted into some of these products likely ends up being advantageous for your users.

• 11:09Speaker 02

  I don't remember who's quote this is, but most people know of it is that, you know, most innovations begin as a game.

• 11:17Anthony Pompliano?

  Yes.

• 11:17Speaker 02

  And as a builder, as an entrepreneur, I've seen that grow from other products and services that I truly admire, love. And I thought Bitcoin had a similar, was going through a similar trajectory. And so we took that quite literally and we said, okay.

• 11:34Speaker 02

  How can we create an experience that every single person, not just people who are deeply educated about Bitcoin or are financially super literate or educated? Or have spent just a weekend even going down, but how can I get someone at a dinner table to present a Bitcoin product that everybody finds relevant around that table? And we started off with a way just to earn rewards. And that was a mix of, hey, go shopping at Amazon, earn two and a half percent back, you get that in Bitcoin. Anybody can do that. You spend your dollars and you're just getting Bitcoin instead of, you know, an airline point or a mile. That product was tremendously successful. On top of that, we said,

• 12:16Speaker 02

  well, how can we make Bitcoin a part of people's daily lives? Like now that we got mom, now we got, you know, cousins on board, how can I make them think of Bitcoin every single day? And so we created a daily game. Essentially, you just open the app and you have the opportunity to win up to an entire Bitcoin. You just spin a wheel and you earn some stats. And the tremendous thing about this is it allows them to. Experience Bitcoin in a way that removes a lot of the risk, removes a lot of the need for you know, deeper education to make a big decision like I'm going to allocate some of my portfolio into Bitcoin. And instead of saying, hey, just open this, think about Bitcoin once per day.

• 12:57Speaker 02

  See your Bitcoin accumulation go up and over time, as we've built that muscle, people look back and said, wait. You're telling me I've just been opening up this app for a day for the past, you know, year or two. And I have a hundred dollars, three hundred dollars, five hundred dollars, a thousand dollars for doing nothing. And then they ask, well, what's happening? Why is Bitcoin becoming more valuable? And why does today my purchasing power feel like it's less? Why does my dollar feel like it's going not as far, but Bitcoin, I just opened up this app and it's going further. It just sets them on this new path. And so we started from that. And since we've grown to basically embed or sprinkle, as you said, Bitcoin into all the other aspects of personal finance.

• 13:41Speaker 02

  So today, it's not just open the app, see how many Bitcoin you can get. It's not just earn it as a reward for paying for your spending. It's things like, hey, I want to convert 10% of my paycheck into Bitcoin. I want to make sure that that my income coming in, I preserve some of it for long-term savings. And the rest might be in dollars so I can manage my finances. So you can get paid in Bitcoin, you can round up your change into Bitcoin after every purchase you make. You can dollar cost average and you know, you can pay your bills in Bitcoin, you can earn it after paying your bills. And so ultimately we've created the bedrock of just really the

• 14:24Speaker 02

  most basic essential platform to operate your personal, daily personal financial life. And now our customers, over the past four years, you know, I said, we've, we've distributed a ton of Bitcoin, but they've also been buying it through us. Now their portfolios are not just, hey, I've, you know, opened an app and earned a couple of sats every day. 10, 30, 40% of my entire net worth is now in Bitcoin. And our customers typically 35, 40, they're just going about to hit major financial milestones. And now they're saying, hey, I need, I'm ready to buy a house. But none of my lenders will recognize my Bitcoin. And that changes my entire terms and everything.

• 15:04Speaker 02

  And I have, so they're really put out of a disadvantage for making the choice to choose to save long term in Bitcoin. And so we created Fold to say, hey, we're not stopping here with just the rewards. Our customers need us to go further. 65% need credit and loans on their Bitcoin. They need a business accounts, they need credit cards, they need access to these products that recognize their Bitcoin. But even more than that, embed Bitcoin into it to give them an edge in a world where most financial tools are about quite the opposite. About giving the company the edge and as a consumer, you kind of get the, the wrong end of the stick.

• 15:42Anthony Pompliano?

  It shocks me that the banks still write all crypto to zero when evaluating personal financial statements, mortgage applications, all that kind of stuff.

• 15:54Anthony Pompliano?

  Early on, okay, fine, they don't know what it is, whatever. But some of the banks, they have teams working on blockchain technology or crypto or whatever. Like obviously they are now up to speed on this stuff.

• 16:07Anthony Pompliano?

  And so, you know, I get maybe like a startup equity, right? Which doesn't have a mark to market, could be zero, could be worth a lot. It's very hard to price, like whatever. Bitcoin is a trillion dollar asset with a liquid market that's traded 24/7, 365. You know, it's a very different thing. And so, why is it, do you think that they are writing it as zero? And are you all taking on any risk that maybe they're unwilling to do by recognizing the Bitcoin as part of kind of the personal financial situation to underwrite, let's say, a mortgage?

• 16:40Speaker 02

  Yeah, I agree with you. I think it is crazy, but at the same time, in that craziness is exactly the massive opportunity that I, that I see for Fold in the company. I feel like we are on the precipice of a major shift in personal banking, where the tools that were there are not delivering as they once did to the end customers. The American dream feels more out of reach. Purchasing power feels like it's coming down. People's savings relying much more on credit that they're not able to pay. The tools just aren't working. And it's really disappointing to see a lot of those traditional banking firms who are providing those tools, put in billions of dollars to a blockchain innovation center,

• 17:23Speaker 02

  but they're writing their their own customers' assets to zero if they're saving in Bitcoin. And you think about why, you know, why is that? And that's something I I think I come on that issue, you know, on a given day, I might have to give you a different answer. But at the same time, I truly don't think they are understanding where there's a bit of an innovator's dilemma here. Like, when we talk about and start to think, well, what happens when we're baking in Bitcoin into the center of personal finance? And we started with something as innocent as rewards. And now you see, after just three, four years of our customers using it, their rewards balance is larger than their savings. They have more purchasing power than they ever

• 18:06Speaker 02

  had before. It rescued them in an emergency. Like, these are features that are, you know, to make a good product that defeats incumbents, you need to make them 10x better. These are 10x better moves by just integrating Bitcoin. But at the same time, you can't devalue your Bitcoin rewards that you give away, which is the major fundamental business model of traditional rewards and loyalty, is that they can always count on saying, hey, in two years, we're just going to give everyone a 50% haircut.

• 18:36Anthony Pompliano?

  Dude, I have a lot of airline miles. I used to take pride in never spending any of them. It does not matter how many airline miles you ever accumulate, you have $1,200 worth.

• 18:47Anthony Pompliano?

  Like, like, when you have, you know, 50,000 airline miles, it's somehow worth $12,000 or $1,200. When you have 500,000, $1,200. Like, I'm like, wait a minute here, I'm stacking up all these airline points, and my goal was to get to a million.

• 19:01Speaker 02

  Yeah.

• 19:01Anthony Pompliano?

  I wanted to be able to, like, flex on, like, my two friends and say, I have a million airline miles.

• 19:07Speaker 02

  So, I mean...

• 19:08Anthony Pompliano?

  Still worth $1,200.

• 19:10Speaker 02

  One, I mean, truly, these rewards programs were were extreme innovations. Number one, airlines today are essentially just rewards programs.

• 19:18Anthony Pompliano?

  Hundred percent.

• 19:19Speaker 02

  That's what the business model is. The Delta airline miles card processes 1% of US GDP.

• 19:25Anthony Pompliano?

  Wow.

• 19:26Speaker 02

  It is. These things are are behemoths that are just right under our noses. And what was incredible about what they did was they created this culture around it where Pomp was saying, I'm never going to spend them. I'm getting to the million miles.

• 19:41Anthony Pompliano?

  Yeah, I'm the I'm the like idiot in the room for sure.

• 19:43Speaker 02

  I know, but that's that. That is the culture around it. And the issue that we're seeing now is that, you know, they're kind of in a hard spot now after leading up to and through the pandemic, there was a ton of credit spending happening. There are a ton of miles being earned. No one was flying. They loved it because no one was redeeming for seats. Now that travel has gone back, they're like, oh, shit. I'd rather I need paid people in the seats. I can't have all these miles that have been accrued and do that. So they're really looking for any possible way to get these value of these rewards down.

• 20:17Anthony Pompliano?

  And what they just basically it's just like classic inflation. If they can inflate away the value.

• 20:22Speaker 02

  Yeah, well, they just say one one mile is actually really half a mile or a quarter of a mile, you know, like they they'll say what can be redeemed for just comes down and that can constantly change. And that's it's the same time where you see the service level of, you know, all the lounges that you once loved. Now you're waiting 30 minutes outside of the lounge and you don't actually get in because there's too many people there that day. All that the the the that culture that was so successful that they like that cultural innovation that they did is just crumbling now. And

• 20:51Anthony Pompliano?

  This is a very US driven thing too, though, you know, because you know what? If if you fly, I recently went to Middle East and I flew on, I'm gonna mispronounce, but Etihad, I think it is, right? Right? There's nobody in the lounge. Like, the thing is just empty. And you're like, man, and they actually are pretty big and nice and you know, all this kind of stuff. You're like, is this because they just built things that people didn't need or want? Or is it actually in the United States? Like, it's such an American individualism, like capitalistic society of like, okay, there's a place that I'm not supposed to go in. How do I get into the, you know, those sliding doors?

• 21:25Speaker 02

  That's it.

• 21:26Anthony Pompliano?

  I accumulate the miles, whatever, and like, Americans go and figure it out. And the next you know, there's the 30 minute line outside the door of people trying to get in.

• 21:33Speaker 02

  But the the veil is coming. Off and you know, we, we've done a lot of research into this and you know, uh, we did a poll that said, what percent of you of, uh, would convert, um, 75% or more of your airline miles into Bitcoin today, right now, if you could, if I gave you the idea.

• 21:52Anthony Pompliano?

  Had to be a huge number. I'd convert a hundred percent literally yesterday.

• 21:55Speaker 02

  So over 90% said, oh, I would immediately, I've hit that button today.

• 22:00Anthony Pompliano?

  Yeah.

• 22:00Speaker 02

  So the veil is coming off and Bitcoin is just eating all these little pools of capital and it's Bitcoin is, in some ways has this is kind of growing into this kind of status symbol as well, where the airline miles used to kind of play into.

• 22:13Anthony Pompliano?

  Yeah. Um, can you do that? Can, can you guys just create a product where, uh, you somehow buy the airline miles that I own in cash?

• 22:21Speaker 02

  I think.

• 22:21Anthony Pompliano?

  Give you my $1,200.

• 22:23Speaker 02

  I think you should, you should make sure you have a fold account and maybe that's going to come to you soon, right? Um, it is, uh, it is, you know, and we, so we, we started with rewards and once you start pulling on that seems innocent enough, but you start to pull on that thread just for rewards itself. 1% of GDP on Delta. Airline miles are being devalued. Our airline miles that we've given on average have increased 116% in value. They're devaluing.

• 22:46Anthony Pompliano?

  Yeah.

• 22:46Speaker 02

  Ours are increasing.

• 22:47Anthony Pompliano?

  Yep.

• 22:47Speaker 02

  And so ultimately what you're seeing is in inevitability of Bitcoin is going to eat the entire loyalty and rewards industry. It's going to happen there, but the, the, the existing, uh, incumbents can't come and do this because it undermines their entire business model.

• 23:04Anthony Pompliano?

  I was gonna say that they actually will suffer if they switch because they go from being in control of a money printer to not.

• 23:10Speaker 02

  Exactly right.

• 23:12Anthony Pompliano?

  And it's better for the customer, but it's not better for the business.

• 23:15Speaker 02

  Exactly right. And right now they're sitting on 30, 30 trillion in unredeemed airline miles.

• 23:20Anthony Pompliano?

  Wow.

• 23:21Speaker 02

  Imagine if you just had that liability for yourself, just waiting for people to come up to collect. It's huge. And so we, we started with rewards.

• 23:28Anthony Pompliano?

  Be devaluing the shit out of it too.

• 23:30Speaker 02

  I would scare the hell out of me, right? And you know, with Bitcoin, I mean, we can't do that to our customers. They, they take it, they withdraw it. It's, it's there. And so it just shows you how embedding Bitcoin in these very interesting ways, not with a sledgehammer, but these are creative, interesting ways into personal finance. You can create products that are 10x better.

• 23:50Anthony Pompliano?

  Mm hmm.

• 23:51Speaker 02

  And not only that, your customers are earning Bitcoin and so are you. And as we've seen, our customers went from. Hey, I just decided, hey, I don't want my airlines anymore. I want Bitcoin. Okay, great. Two years later, hey, my Bitcoin now that I've earned on rewards, this could go towards a down payment on a house. Okay, now let's deal with that question because now they're doing all their banking with us, they're direct depositing their paycheck, there are cardholders.

• 24:16Speaker 02

  But no mortgage lender is giving them a loan to get it. And then we know their history, they're great customers, they're extremely valuable, but no one is talking to them. They're writing it to zero. And this is just like we started this thing, it's crazy that that's the way they do it. But for me, this is the big opportunity. They're literally, as you sprinkle in Bitcoin into all these things, it provides financial superpowers for and consumers. But at the same time, it can start to undermine the primary business models of those that we have traditionally looked to provide those services to us.

• 24:49Anthony Pompliano?

  Talk to me about how Bitcoin and a mortgage, so obviously you can, if I came and I applied for a mortgage, you can look and see, okay, he owns one Bitcoin, that's worth, you know, Y dollars. And so I'm going to include that as part of the evaluation as to what's his income, what's his assets, you know, what loan size, maturity, monthly payments, all that kind of stuff. But you are taking a step further and you actually want to insert Bitcoin into the loan itself? Like, how would that work?

• 25:17Speaker 02

  Yeah, so, you know, traditionally, there's the Bitcoin and Bitcoin loans generally have been looked at approached two ways. Number one, it's a, it's a really great proxy for credit score in places around the world where there is no credit score. Having a hard asset that is a bearer asset is actually a really strong way to, to, to.

• 25:37Anthony Pompliano?

  It's a better credit score.

• 25:38Speaker 02

  Yeah, it's a, it's a real.

• 25:40Anthony Pompliano?

  It's not a maybe, it's a, you either own it or you don't.

• 25:42Speaker 02

  Exactly right. Huge innovation just there. But the rest of the loans have kind of been approached of, hey, put your Bitcoin up as collateral. And what we all know is that Bitcoin in the short term, short term is incredibly volatile. Over the long term, it's volatile only to the upside in its history so far. 63% CAGR since founding so far. But you need to be prepared for those wild swings in the short term. And that provides really challenging problems for loans that may be termed in a short term, right, in a year, in a couple of years. And then you have risk of margin calls. And for fold is when we, when we look at those types of problems, uh, problems to solve, we know our customers need it, but also that to us, that didn't look like or feel like

• 26:27Speaker 02

  a mass market product to deliver. I can't have my customers worrying at midnight that something weird happened in the, you know, Asian markets and Bitcoin is tanking today. And now that they're getting margin called and, you know, all that there. That's just not a mass market product, in my opinion. And so we tried to say, okay, let's, let's take a step back and let's, let's gather a team. So for fold, we have, um, we brought on to our board of directors, um, that we're forming with the, with the public entity is one of his, Andrew Hones. He runs a company called Battery Finance. Uh, he has been a pioneer in traditional credit product, structured credit, uh, in the traditional space.

• 27:09Speaker 02

  Uh, he went down the Bitcoin rabbit hole and, uh, since he's joined the board to fold and he looks at loans in really interesting ways with Bitcoin. Instead of using the Bitcoin as the primary collateral, let's imbue Bitcoin into various loans so we can take a house. So maybe you have a million dollar home and, uh, we're going to give you a loan to buy that home. But when we give you that loan, we're also going to use some of that loan to buy Bitcoin. Or maybe you can contribute some of the Bitcoin into that loan. And what this allows us to do is that you are, you are combining the strength of the, the home that will have its own appreciation journey with Bitcoin itself.

• 27:51Speaker 02

  And having both of these two things together creates truly magical results, especially over long-term loan products.

• 27:59Speaker 02

  So you can provide customers with something, hey, do you want to lower interest rate? Do you want to lower down payment? Okay, well, we'll maybe take more of the upside of Bitcoin over the long haul. Hey, do you really want the upside on your Bitcoin? Well, maybe you'll get more traditional terms, but you're going to get a lot more of the upside there. So the whole idea and the concept of the margin call is gone. This is essentially the loan has been used to buy the Bitcoin versus you contributing your Bitcoin to collateralize a loan separately. So it, it just really changing and innovating in the space, looking at it from different angles. I think we're really on the precipice of Bitcoin becoming that pristine collateral asset that you've certainly been talking about for, for years.

• 28:44Speaker 02

  But everyone's been waiting for, it's also ready for a person who has never held Bitcoin to have, to take this type of product and get a better terms, better loans. Why? Because Bitcoin's being embedded into the, to the core of the loan.

• 28:57Anthony Pompliano?

  I, um, I wrote one time about Bitcoin being pristine collateral, uh, specifically from, uh, kind of lending and different ways to use it. And, uh, someone who I think very highly of and, uh, implicitly trust, uh, wrote to me and said, you should not say that. That sounds insane, right? And this is probably back like 2019, maybe 2020.

• 29:21Anthony Pompliano?

  And because of who this person is and, and, you know, somebody that I trust and they're not in kind of the Bitcoin world, but, uh, said that to me. I had to sit down and like critically think and be like, oh my God, like, he thinks I'm insane, right? Like, like, like, let me, you know, kind of double check my work here or whatever. And I came away more convinced that, no, no, like, like, actually I, I agree with this and think this is correct.

• 29:44Anthony Pompliano?

  But what was fascinating to me was you can't arrive at that conclusion unless you've got a, a fundamental understanding of what Bitcoin is, how it works. You know what? Like, there's a bunch of stuff that goes into it.

• 29:55Anthony Pompliano?

  But if you don't have that, it does sound insane to say Bitcoin is pristine collateral. You see a highly volatile asset that, you know, people are speculating with and blah, blah, whatever. And so. To me, a big part of, you know, you keep coming back to this like opportunity is it's going to take a while for traditional finance to get comfortable, not because the individuals don't realize it. I know a lot of people work in these banks. They own Bitcoin.

• 30:19Speaker 02

  Yep.

• 30:19Anthony Pompliano?

  They see that it's pristine collateral. Nobody wants to be the person who's willing to raise their hand and potentially get shot in the back.

• 30:25Speaker 02

  It's the career risk.

• 30:26Anthony Pompliano?

  For saying, hey, I think that we should start using Bitcoin as pristine collateral.

• 30:30Speaker 02

  Yeah.

• 30:30Anthony Pompliano?

  Like, that is how you get fired at these companies. And so in a very weird way, the bank's not dumb because the people aren't dumb. It's that the bank is optimizing for not getting fired, not having regulators up their ass, you know, like all these other components that leads to a conclusion, let's not touch it versus you all, you're kind of asking yourself like, hey, what can we do with this?

• 30:54Speaker 02

  Yeah.

• 30:55Anthony Pompliano?

  They're asking themselves like, what can this asset do to hurt us? Those are two very different questions.

• 31:00Speaker 02

  That's exactly right. And we, we, you know, I get the benefit of having, it is an interest. I've never heard, I don't think I've talked about in that way before that you have these institutions that if you go ask people individually, a lot of smart people know a lot about Bitcoin and probably have a lot.

• 31:16Anthony Pompliano?

  Oh, yeah.

• 31:16Speaker 02

  And probably could talk to you about why some of the ideas you're doing is are great and interesting and they could probably give you a lot back. But it's the culture of that, of that entity of that organization, which just jams that up. But the benefit for us is we put out a, a job, you know, a job opening. We get hundreds or thousands of job postings or of candidates coming through us. And all of these candidates are extremely qualified. They're coming with a sense of not only I've been working and created a great resume, extreme, extreme wins in my past, but I'm really passionate about this and I want to focus on this and do this because I get it. So Fold is like, our company is, you know, ex Goldman, people who have been, you know, building pioneers

• 31:59Speaker 02

  in structured credit industry, in credit card industry, like all these people who are in these organizations saying, I see it. It's not, definitely not going to happen here. And so they come to us. And I know that's a, a very common thing. I know you run the, the job sport that you have. And I know from other founders in the space, it's another superpower that Bitcoin companies have.

• 32:19Anthony Pompliano?

  Hundred percent. Well, and I also think, You know, if you go talk to a founder or a CEO who's been doing it long enough, they'll say, hey, I used to think people cared how much money they got paid. That's a very important part of it, but actually to unlock the A plus, you know, kind of 10x type talent, you have to pay them well, but also they have to feel part of a mission that is bigger than themselves. Like there's a intellectual reward. There's an emotional reward that they need to kind of fulfill while at work. And one of the things I think Bitcoin companies have that is just hard to replicate outside of Bitcoin is it's not just the company mission, it is kind of the industry mission.

• 33:01Speaker 02

  That's it.

• 33:02Anthony Pompliano?

  Right. And, you know, maybe space and, you know, Elon's done a good job of kind of framing it as, hey, we're going to get multi-planetary species. Or maybe, you know, there's certain industries that have some degree of it. But there's a reason why the industry is so rabid. It's because people really, really believe in the thing that they're trying to accomplish. And I used to think that it was all, no, it's just like people are bag holders. Right. And they're just like, oh, the price to go up. And sure, there's an element of that, but I do think there is kind of this hardening of the intellectual, you know, perspective. People say, look, I think this is an important technology and I'm willing to dedicate some portion of my time and resources to see this come to fruition. And so if you're a company working in that industry, you get kind of the passive benefit

• 33:47Anthony Pompliano?

  of, hey, you're going to get paid well, but also don't you want to come work on this important technology?

• 33:52Speaker 02

  That's exactly right. You know, we, we, we look at, you know, what is going to be the difference for us, you know, to make, you know, so Bitcoin, not many people know this, but Bitcoin is growing, the network is growing faster than the internet was at the same, same period of time. Like this is a thing that is a fact you can know, but you, you go tell it to most people on the street, they'll be like, it doesn't make any sense. No way. And what this means is that every single day you're having more people join and join. And sometimes it's like people downloading fold and starting that journey. Sometimes it's people that need to to adopt Bitcoin. And it it develops this incredible sense of not only a a big mission that's there, but an accelerating mission that that is there.

• 34:35Speaker 02

  But at the same time, you get these incredible individuals that they're not just there for the hype. Because being in Bitcoin, especially a Bitcoin company, you experience those highs and you experience those lows. And so you get these incredible individuals that can persevere, that have, you know, have tested their metal and are still there. And like I I could not be, you know, more. I think that's one of my favorite things about besides just having a direct impact on improving the financial lives of our customers in the world. Being able to work with the people I do is is is is phenomenal. And knowing what they will accomplish. And it's going to be career defining products that they launch or innovations that they make or, you know, whatever it is. They see it, I see it, and I'm just excited for the future.

• 35:21Anthony Pompliano?

  Now, um, you all are going public via this SPAC transaction. It's regulated, so some things you can talk about, some things you can't. But I saw a press release, so you got to be able to talk about some stuff. Talk a little bit as to why did you want to do this? What are some of the details that you can share? And then maybe the part I'm most interested in is I saw a pretty big number that was out there saying post transaction, here's how much Bitcoin you think you guys can get on the balance sheet. So just talk through that as well.

• 35:47Speaker 02

  Yeah, we uh Bitcoin rolls in cycles. And so we're always looking at, uh, how are we going to accelerate growth into the next cycle? In, you know, 2021, we were growing absolute gangbusters. You know, we were, you know, hundreds of percents of growth coming in, lots of new users coming through. And during the bear markets, we also were growing. And we said, okay, what is our next move for looking at the next cycle?

• 36:17Speaker 02

  And we looked at a lot of things, but really the public market entrance was saying, "Hey, there is no Bitcoin financial services company that is operating the public markets. We are already operating on the MicroStrategy playbook as a public company. We've already built a treasury of 1,000 Bitcoin, about 60-plus million dollars today. And our business itself generates Bitcoin. We receive Bitcoin natively as revenues. And not only that, our product is meant for, I think, is maybe one of the best products to represent Bitcoin to the rest of the world as a public company. It is accessible to everybody. It has immediate improvements in people's lives.

• 37:00Speaker 02

  It makes Bitcoin easy to understand and excellent. And we thought whoever does this first, whoever becomes that first Bitcoin company as a public company, is going to get a tremendous amount of the wins from that. Being a public company is going to, you know, it raises a lot of things. The spotlight is on us, but we intend to become synonymous with Bitcoin and the growth of Bitcoin. And so we said, "Okay, how are we going to get there?" And we looked at traditional IPO, we looked at reverse mergers, we looked at SPAC, you know, but ultimately, everything comes down to timing and team. And so we were imagining, kind of looking at all of them, but ultimately, we found

• 37:42Speaker 02

  that, "Okay, the next cycle is near." And not only that, we were connected with the Coens, Betsy and Daniel Cohen. She is an absolute legend in internet banking and specialty financial products. Launched Bancorp, a lot of great things, is one of the most successful SPAC sponsors out there, even given SPAC's just general history. And we just got this incredible team that aligned and a team that comes from very traditional finance, who heard our story of a company operating on a Bitcoin standard that helps accumulate long-term savings for our customers via Bitcoin, that has the express purpose

• 38:24Speaker 02

  of building our own treasury in Bitcoin and doing that through both financial engineering and through bringing our revenues and profits into our treasury. Most conversations you have would go the same way that your friend talked to you about imbuing Bitcoin into loans. They'd be like, "That sounds crazy." On the other side of the table, we only saw alignment, excitement, and from there, we saw a timing team. This is it. And the SPAC gave us an incredibly clean, clear path into the public markets at just the right time when we want to cross that window. And so we hit the gas. And for us, it means a lot. We're going to be representative of Bitcoin on public markets

• 39:07Speaker 02

  from the only Bitcoin-powered financial services company up there. We are going to be a brand that people look to. And, you know, we're going to be creating these products that change people's minds about how Bitcoin works and make Bitcoin relevant to everyone, even if they don't have it today. And I think that's why Fold is a really great example. It's not a place for trading and speculation and the casino floor. It is not, you know, there's a lot of use cases have been thrown around in this space. But I think perhaps the one that is the most important is, hey, we're living in a world where the traditional system is not working, our dollar is not going as far, and fiat in general is having trouble. Bitcoin is a life raft to build long-term savings,

• 39:50Speaker 02

  to provide security for your family, to provide you hope for the future. And Fold has been just focused on just that mission. And I don't think there's a better company to represent that to the rest of the world in the public markets.

• 40:03Anthony Pompliano?

  A big part of companies putting Bitcoin in their balance sheet has been, especially in the public markets, it brings investor interest very quickly. You have DeFi Technologies in Canada who's done this, you have Meta Planet in Japan, you have Semler Scientific, which has done it here in the US. There are probably others that I'm not mentioning, outside of kind of the Bitcoin or crypto native firms. So we're not even talking about the miners and kind of all those businesses. You all have a thousand-ish Bitcoin on the balance sheet today. How many do you think that you can get kind of post-transaction? I mean, I think I saw a pretty big number that was out there.

• 40:41Speaker 02

  Yeah, I mean, we intend, we're going to be raising our pipe. And, you know, our full intention is to be aggressively building the Bitcoin treasury. Why? We understand the point of the cycle that we're at. Even today, with a thousand Bitcoin in our treasury, it's going to be very hard for companies to even achieve that level over the next few years as price starts to run away and we start to see the next cycle mature. So for us, we see, number one, it was all about that timing and team to get the vision of what we're gonna do and we're gonna need to do it in this time period. And so, you know, we true, you know, I believe that we are going to meaningfully, you know, multiply the amount of Bitcoin that we're able to accumulate through the our financial, financial, financial engineering efforts.

• 41:27Speaker 02

  But at the same time, we're launching a slew of products that give us access to long-term appreciation of Bitcoin and give us access to Bitcoin revenues to come in. And so we get to have this two-pronged strategy where you mentioned some of the great similar DeFi technologies, micro strategy. And all of them have been pioneers in the financial engineering side. But the market has yet to see a company that is natively generating Bitcoin as well.

• 41:54Anthony Pompliano?

  It's almost like it's a Bitcoin company with Bitcoin on its balance sheet is very different than I'm a company that does X, even if you're crypto related. And I put Bitcoin on the balance sheet, but a Bitcoin company with Bitcoin on its balance sheet. You know, I can think of a couple of businesses, right? That I think are doing in the private markets. To your point, I don't think I can name a single one in the public markets. And so there's probably appetite for it.

• 42:18Speaker 02

  That, I mean, you, you can, you know, we see appetite for various, you know, iterations of a Bitcoin company in the, in the space. And, you know, we see the, we talked about the micro strategy side. We briefly mentioned miners, you know, a really interesting way to think about fold is that fold is a Bitcoin miner that has no exposure to the depreciation of hardware, has no exposure to the price of electricity. And we're not competing for the 6% of Bitcoin that has yet to be mined. We're competing for the 94% of Bitcoin that has already been mined and is already circulating. And I think that's a really interesting frame because Bitcoin miners are expressly there to do what? To mine Bitcoin and to bring Bitcoin in. That's, that's the whole thing.

• 43:04Speaker 02

  They have a few things that make that business really challenging and really hard. And the people running those companies are, you know, the, the only way you can still be in that business is to be an exceptional player in the game. But for Fold, we looked at our own company and said, well, we, every day, we're generating Bitcoin. We're bringing in Bitcoin. We're essentially mining it. But we have none of the overhead or cost structures associated that make Bitcoin mining really hard. And so it's just an interesting frame to look at it. So you can imagine a Bitcoin miner, no exposure to depreciation, no exposure to electricity costs, and competing for Bitcoin that exists today. And then at the same time, we're doing the financial engineering that you see from a lot of likes of MicroStrategy.

• 43:48Speaker 02

  So really, we're going to be operating in our own lane in the public markets. There truly isn't anything like us. But we fully intend to create the playbook because we know there are going to be others that follow.

• 44:03Anthony Pompliano?

  What is the thing that you're looking at throughout this bull market? That you see not being discussed, but you think is really important? Is there something that you think is being under indexed or underestimated? But having been through a full cycle as a business now, you're like, this is the thing that I'm really paying attention to?

• 44:23Speaker 02

  Well, sometimes we, being a builder in the space, building the products that are going, that are coming to market, that the rest of the market has no idea about, that are coming there, gives you some insight. Like, I know a lot of companies that are going to be releasing these things that alone are going to do tremendously, tremendous things for Bitcoin. And so number one, I'm looking forward to that. And I know other companies in space that have equally high ambitions with equally impressive and interesting products that are coming to market. And what I really like about it is that this, this cycle feels different. And that a lot of the players that were relevant in the last cycle,

• 45:06Speaker 02

  the FTX, the Voyagers, the Celsius, that came from a different era of Bitcoin and crypto are largely gone. Their approach to doing business is gone. The next wave that comes through, I think Fold is a great representative from, really approaches everything from a very, very different perspective. And I'm looking forward to the next cycle. Where the people, the majority of people are onboarding to companies like Fold, where they're going to have just a different dynamic of a company serving them that has their interests in mind, that has aligned interests between the company and the consumer. And I think we're going to, you know, we get to approach this new cycle a lot with having swept

• 45:51Speaker 02

  a lot of that history away, having a lot of that is cleaned up now. ETF is absolutely chugging along as one of the most successful things ever for a new financial product. And I think a lot of the stumbling blocks that we had traditionally been hit at due to the immaturity of our space and the companies and just some of where the space started are gone. And I think we're truly turning a new chapter where we mature and this is when we will become, you know, we're not, my intention is not just to be a Bitcoin company for the rest of my life. My intention is to be one of the, you know, largest, most important financial services companies in the world. But I just love that story.

• 46:33Speaker 02

  I think like, I think we, a lot of the problems and issues from the past have been wiped clean. We have incredible new products, ETF, Fold, and all these others that are coming to market that I'm just deeply optimistic about this next run.

• 46:50Anthony Pompliano?

  My last question for you is, I think a lot of people will see kind of Fold in its current form, they'll hear you talk and say, this is amazing, right? It's a Bitcoin company, it's serving a whole user base. But if it's going to be a publicly traded company, the public markets constantly want more growth, more growth, more growth. They're going to have to expand outside of Bitcoin. They're going to have to offer Ethereum or Solana or name whatever, you know, coin of the day that people are excited about. How do you think about Bitcoin and remaining Bitcoin only versus evaluating some of those other things? And, and maybe through the lens of, you know, kind of growth prospects and market share and things that kind of public market shareholders would care about?

• 47:28Speaker 02

  Yeah, so Fold was founded on the principle that, hey, we think that the, well, let's even go from first principles. I think when we talk about money, there's really, and monetary assets, there's two things it needs to do. I either want to speculate with it or I want to save it over the long term. And I think the speculative Category cohort is deeply well-served by the market today. And I think on that side, the Solana, the Ethereum's are great products for that use case.

• 48:05Speaker 02

  And when I think of the long-term savings and imbuing Bitcoin into deeply into the financial fabric of people's daily lives, that's when we take just a different look where our growth is not to go across all these coins to provide different ways of speculate on them. Our growth is to imbue Bitcoin across the financial system is there. And we have, we have only, we've, we've just scratched the surface on rewards. We just scratched the surface on savings accounts with Bitcoin, just scratched the surface on credit. We're going deep into loans, business accounts, bill payments, you know, you name it.

• 48:45Speaker 02

  And I, that growth alone into those industries is much larger than we would even hope to see if we were to go the kind of more horizontal approach into, into other, you know, more speculative assets. And so for us, we are like, let's be hyper-focused on Bitcoin as a, as an asset that belongs in everyone's personal financial portfolio to give them an edge on the rest of the world. And nobody's really doing this. This is what we just talked about. No one's innovating here. There's a plenty of places where you can go hold, trade, all the other coins, but there's really no great spot where you can actually have a banking platform that has Bitcoin is powered behind you. And that, I believe, is a tremendous amount of open space for us to take.

• 49:30Speaker 02

  And so that's what we're going to be focused on first. That's the bag I'm not going to fumble. Right? The other stuff is relatively simple and straightforward. And so we're going to get growth that way. We're also going to get growth from our own treasury itself. And so, um, right now, I think the opportunity is too big. It's too unexplored and has way too much depth for us to do. And no one is going at it like we are.

• 49:55Anthony Pompliano?

  I love it. It's very, very smart. Uh, where can we send people to find, uh, fold if they want to become a user of the product? And then where can they find out more? About the proposed SPAC transaction.

• 50:04Speaker 02

  So you can find fold on the app store near you, foldapp.com. Absolutely take it for a spin. And then for the SPAC, our website, foldapp.com/investors. You can get investor decks. You can get all the press releases that we talked about. And maybe some of the details that we didn't go into here.

• 50:24Anthony Pompliano?

  Amazing. Well, thank you so much for doing this and we'll see how SPAC transaction goes. And then we'll definitely have you back and do it again in the future.

• 50:30Speaker 02

  Absolutely. It's a pleasure.

• 50:32Anthony Pompliano?

  All right, guys. I hope you enjoyed that episode. That was one of my favorites. Now, we got a lot of things to talk about because I spent a lot of time making this podcast or these videos. And now I need your help. There's a couple of things you can do to help the show get bigger, get in front of more people. The first, if you're watching on YouTube, go ahead and hit the like button. The more likes there are per video, the more people that see it. It's pretty simple. Now, if you're an audio listener, you don't like video, you don't like seeing my beautiful face, then you can go to Apple, Spotify, or any other audio platform and leave a review. Hit five stars, leave a nice comment, help us promote the show. On top of that, I got a brand new book coming out, September 24th. It's called How to Live an Extraordinary Life.

• 51:14Anthony Pompliano?

  I wrote 65 letters to my children. Go on Amazon, wherever you like to buy books. Search How to Live an Extraordinary Life, Anthony Pompliano. It'll pop up. It's a nice black cover. Go ahead and hit that buy button so you can preorder the book as well. Now, if you like the show, tell your friends, share with your family, annoy your brother, your sister, your mother, or your father, and make sure that they become a listener and a watcher as well. Thanks so much for tuning in. I'll see you guys the next episode.