Hey everyone, since recording this episode, a lot has happened with crypto and specifically BlockFi. I'm recording this on the morning of November 15, 2022, and after the downfall of the crypto exchange FTX, BlockFi put a hold on all customer withdrawals, leaving many people, myself included, with a lot of crypto on the platform.

I am angry about the way this was all handled and communicated, and certainly not happy about the financial situation they've put me and many others in. I truly hope that they're able to find a way through all of this that results in everyone getting back their money, so obviously any recommendation you might hear for BlockFi in this episode should be ignored and considered outdated.

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Again, that's longangle, A-N-G-L-E dot com. Hello, and welcome to another episode of All the Hacks, a show about upgrading your life, money, and travel, all while spending less and saving more. I'm Chris Hutchins, and today I'm talking to Zach Prince, the co-founder and CEO of BlockFi. If you don't know BlockFi, they're a crypto-first banking platform where you can earn interest, borrow cash, and trade crypto all in one place.

In our conversation, we not only discuss crypto things like earning 8.6% on your cash and how to think about holding crypto in your overall investment portfolio, but we also discuss Zach's favorite investing hacks, like how to use options to generate income. And before we jump in, if you're enjoying the show, I'd really love your help.

If you could either pick your favorite episode and share it with a friend or leave a five-star review in the podcast app, I would really appreciate it. All right, let's get to it. Well, after one more quick thing. Chris Hutchins works at Wealthfront. All opinions expressed by Chris and his guests are solely their own opinions and do not reflect the opinion of Wealthfront.

This podcast is for informational purposes only and should not be relied upon for investment decisions. Zach, thanks for joining. Chris, pumped to be here, man. I'm excited to talk about hacks. Yeah. So before we jump in, could you give everyone a little background on yourself? How did you end up running BlockFi?

Yeah, sure. I grew up in Texas and moved to New York City after I finished school. I've always worked at venture-backed technology companies. I was originally in the advertising technology sector and more recently, I've been in the fintech sector at a couple of online lending businesses prior to starting BlockFi.

While I was at one of those online lending businesses, I got a ton of exposure to all things fintech. We were kind of like a data aggregator and technology provider and so I just saw so many interesting things happening in the ecosystem and I started writing a blog about whether or not people should be using robo-advisors or whether or not you should be investing in fractionalized real estate and nobody ever read it and podcasts weren't a thing yet, so I didn't have a cool podcast platform.

But that experience led me to Bitcoin for the first time and I was basically yelling on this blog back in 2014 that just from a risk-return perspective, you should be buying a little bit of Bitcoin if you were young and had any amount of risk tolerance because it could potentially do 100x.

And unfortunately, that kind of came true in early 2017 on the momentum of excitement from the price appreciation, I decided that I really wanted to get involved in the crypto space full-time and that desire led me to the idea for BlockFi, which originally was to build debt and credit products for the crypto ecosystem.

And we've, from that starting point, expanded to where we are today, which I would describe as crypto-first banking solutions or crypto-first wealth management solutions, but yeah, that's how we got here. Yeah. So what made me reach out was I opened up a BlockFi interest account and right now, interest rates are kind of at all-time lows and kind of give people an idea of what it is.

Yeah, sure. And it's 8.6% in an account that's liquid. So you can go in and out in a 48-hour window if you want, which is very different than a lot of other kind of online lending or private credit opportunities where sure, you might be able to get high single-digit yields, but you're dealing with something that's illiquid or on a much longer duration than the BlockFi interest account.

But the way it came about is we started originally with our first product, which is enabling people to borrow dollars secured by the value of their cryptocurrency. And launching and starting to scale that product led us to the realization that there was a lot of borrowing demand for cryptocurrencies in the marketplace because prime brokers weren't supporting big trading firms that were getting active in the crypto market.

And so we started lending cryptocurrencies to these big institutions and then we needed more and so we launched the interest account, initially just offering a yield on Bitcoin, Ethereum, and a couple of other cryptocurrencies. But then we quickly expanded that to include stablecoins, which are one-to-one interchangeable with dollars in a bank account.

And now using the interest account, folks can get a high yield on all of those assets. So it's a 5% on Bitcoin, 4.5% on Ethereum, 8.6% on stablecoins, which are interchangeable one-to-one with dollars in a bank account. And the reason, often, the first question we get from folks who are like, "You're paying me 8.6% on cash, this is insane, why is this even possible?" Well, the fundamental reason why this is possible is that banks aren't active in the crypto space yet.

The crypto space has experienced a ton of growth, there's been a ton of wealth creation, and there's also a lot of volatility. And all of those things combine to create a pretty large market of borrowing demand. And because banks are not actively lending into this space, and in general, the crypto world doesn't have access to traditional sources of capital, the cost of borrowing is high.

And what we're doing with the BlockFi interest account is basically giving folks a really easy, seamless way to take advantage of that market dynamic and earn 8.6% on your cash, even if you don't want to buy Bitcoin. And then you can also, of course, buy Bitcoin on our platform and earn interest on that as well.

But that's how it works. If anyone's used a fintech platform, they'll feel very familiar with how things work at BlockFi. You go through a quick KYC process, connect your bank account using Plaid, transfer some money in, and then the next morning you'll see your accrued interest, and once a month the interest becomes part of your balance.

And it's a relatively straightforward user experience. There's a lot of fancy stuff that goes on in the background in terms of how the lending works and the risk management. I'm really happy to say that we've never lost a penny across any of the lending that we do at BlockFi.

It's a very low risk type of lending where we're getting collateral for every loan that we're making on the platform. Yeah, that's the interest account. Yeah, I can attest to an easy process. I've signed up, I've put cash in there, and I've earned interest each month at a much higher rate.

I think in the finance industry, there's always this trade-off that everyone talks about of risk and reward. 8.6% is a lot. Can you talk about the risks that someone might take putting money here versus leaving it in a bank account earning almost nothing? Yeah, there is a very important disclaimer, which is this is not a bank account, and as a result, it does not come with FDIC insurance.

It's also not a securities account with CIPIC insurance. This is really from a, where does this fit in the spectrum of investing? I think it's closest to private credit opportunities or maybe real estate financing platforms. But the risk, in my mind, is much lower because similar to real estate, you're participating in something where there's an asset that's being provided as collateral for the loan.

The big difference is just that the asset that we're financing at BlockFi and folks who are holding dollars on our platform are financing is a liquid asset. So you're basically taking part in a system that lends folks 50 cents on the dollar secured by their Bitcoin, and then BlockFi manages all of the risk management related to that in terms of if the Bitcoin price goes down, we're issuing margin calls or selling a little bit of the Bitcoin to make sure that there aren't any losses.

Yeah. So can you just dive one level deeper? So if I'm putting money in my BlockFi interest account, you're loaning that money out, you said it's collateralized, like 50 cents on the dollar, somewhere in that ballpark. That means that someone borrowing has to put more money in than they're actually borrowing in dollars or in stablecoin?

Yeah. And you can actually see this dynamic within your BlockFi account. So in the same account where you can earn 8.6%, if you're holding dollars in the account as stablecoins, you can also access our loans product where if you borrow dollars at a 50% LTV relative to your Bitcoin, so let's say you have one Bitcoin, it's around $55,000.

So you could borrow up to $27,500 secured by that one Bitcoin. You would pay roughly 10% for that. What we're doing is charging one side 10, paying the other side 8.6, and then also managing a lot of just liquidity and kind of portfolio level risk. So for every $100 that comes in and is held in an interest account, we're not lending out 100, we're lending out 70 or 80.

And the reason for that is that you want to make sure that you always have ample liquidity in the system to process withdrawals or originate new loans. And so there's a bit of, you know, complexity behind the scenes, but fundamentally that's how it works. And is your system fully automated such that if Bitcoin at three in the morning starts going down and the interest account holders are all worried, what's going to happen?

Are you able to sell the assets that you have on collateral in real time or as things are falling if you need to, obviously you don't want to, but if you need to protect the people that have interest accounts? Yeah, absolutely. I mean, that's one of the unique things about the crypto market.

I think one of the products that's relatively analogous to our loan product would be a margin account for securities or a securities backed loan where you have a bunch of shares of Amazon stock and you don't want to sell them. You borrow against the value of those shares. If Amazon stock goes down in value at a certain point, you're going to get a margin call from that broker that gave you the loan.

The big difference is that in crypto, the market trades 24/7. So our system runs 24/7 and in that scenario where the price is falling at 3am, our system's working at 3am and it can issue margin calls and sell Bitcoin if it needs to. In the traditional market scenario, it's a little bit more risky in some ways because what happens is the market closes, Amazon releases earnings and whether those based on how those earnings do, and Amazon's a really large cap stock, so probably not the best example, but it releases earnings after hours, liquidity's thin.

Let's say there's a big surprise up or down. By the time the market opens the next day, you might have gapped down pretty significantly by the time you can actually sell or do anything again. In crypto, it just runs 24/7. Yeah, that's cool. Now, in part of my diligence, and again, full disclosure, I'm a BlockFi customer, I noticed there are lots of other companies out there doing various versions of taking a stablecoin and earning return.

Is there something different that BlockFi does that people should keep in mind if they're considering all of the alternatives? Yeah, absolutely. BlockFi is the only company that offers this type of functionality in the crypto ecosystem that is available to retail investors, domiciled and regulated in the US. So we're regulated like a fintech company, we have numerous licenses across the US.

And that is led by a team of financial services professionals who come from precisely the backgrounds that you would want folks to come from if they're managing a platform like ours. If you get into the crypto world, there can be spectrums of shadiness, for lack of a better term.

And there are some folks out there who cosmetically might look the same as BlockFi, offering you an interest rate on a certain asset. But they did an ICO, which was effectively an illegal securities offering, and they're domiciled in some foreign jurisdiction that doesn't have as strong of a rule of laws as the US.

And then the last thing I would say is just our track record, we really invented a lot of this stuff in this market, we've been doing it the longest, and we've had perfect performance for our clients throughout our entire history. Within the crypto lending world, I would say that it's a very reasonable assessment to make that BlockFi is the safest bet for this type of activity.

And then the last thing I would add is that we really pride ourselves on providing world-class client service. And so there'll never be a scenario with BlockFi where if you have a question or a concern, or you want to get in touch with us about anything, that you won't be able to really quickly.

We have a phone number and really great response times on chat and email as well. It seems like with every business, you get to a certain size and the cracks start to emerge. Things that you used to do in a day are taking a week, and you have too many manual processes, and there's no one source of truth.

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So check them out today at allthehacks.com/peak, P-I-Q-U-E. Yeah, I've heard people talking about how, "Oh, the rate might be higher with all these DeFi platforms." I assume that none of those come with customer service and liquidity and the structure and security of a company that's regulated in a modern first-world country.

Yeah, that's right. And the rate is actually not higher unless you prescribe value to the tokens that are created by the DeFi protocol. The actual yield on your stablecoin will be much lower than 8.6%, but then these protocols created their own token, and they give you some of that token as rewards.

And if you go and sell that, then maybe your all-in yield becomes higher. And I'm a big fan of DeFi. I wouldn't want to say anything negative about DeFi whatsoever, but there are some big differences, especially in times of market stress. And in times of market stress, companies like BlockFi have the ability to do things with our customers' interests at heart.

We're structured in a way where our equity capital, which is very substantial, would take the first loss if there ever were any losses. And that's very different than a DeFi protocol. What's happened in times of market volatilities with some of these DeFi protocols is, whoops, the smart contract failed and everybody with a loan got liquidated, or people that were depositing had to take a haircut, and nobody cares.

That sucks for you, Mr. Customer. That's just the polar opposite of how we view the world at BlockFi. Yeah. And you said you guys have a lot of equity capital. Can you give me a sense of how big is BlockFi the company right now, either from a fundraising, valuation, employees perspective?

Yeah. So we're actually over 700 people now at the company. The most recent round of funding that we did was a $350 million Series D that was led by Tiger Global and DST and Bain Capital Ventures. And that round was done about six months after our Series C, which was a $150 million round that closed in Q3 of last year.

So we've been on a great fundraising trajectory. We haven't had anyone tell us we're wrong. My co-founder has claimed that we're the fastest in-tech company to go from zero to a $3 billion valuation. So we're very fortunate and we've done really well in capital markets and just in terms of being able to build a large business really quickly.

We talked a lot about the interest on stablecoin, something that's dollar-denominated and easily liquid, but holding another asset is part of an investment strategy. And I think it, while it might not seem like a hack, putting my money to work over the last 10, 15 years of savings has been how I saved all the money I have.

And that's my investment portfolio. That's a big hack for me is just putting money in a market that earns. Given the state of crypto, an emerging asset class, how do you think about that as part of someone's investment portfolio? I mean, look, obviously it's a very personal question and it depends a lot on where folks are in their life and what their risk tolerance is and all of those typical kind of personal finance factors.

But for me as someone that is relatively young, fortunate to be successful in my day job and have enough discretionary kind of income to invest in things like crypto has been the best investment that I've ever made. And it started out as 5% of my personal asset allocation, but because of the performance and also increasing conviction that I've had in the asset class, especially after I got involved in it full time, it's around 50% of my asset allocation now.

And I think there are these kind of underlying trends in the crypto market that are, regardless of the day to day volatility of the market, Bitcoin can go up or down 10, 20% in a single day. But if you put that to the side for a second and you zoom out a little bit, this market has so much potential and I don't think that's changing anytime soon.

And so what I tell folks that I recommend with crypto is invest an amount that you're comfortable with. Understand that you're making an investment for the long term. You're not turning into a day trader that's going to buy more or sell it tomorrow, depending on which way the wind is blowing in the crypto market.

And you're probably going to be pretty happy. I think there's a very small number of days that someone could have possibly invested in Bitcoin and they're all probably in the last 45 days where you'd be down on it. If you bought it six months ago, you're up. If you bought it a year ago, you're up.

If you bought it two or three or four years ago, you're up a lot. And Bitcoin in particular is one of these, in my opinion, genuinely unique assets because it is both a kind of store of value hedge against inflation like gold and a venture capital type growth play on a network.

And this is a network that is attracting new users, making more connections into traditional systems and garnering more adoption every single day. And then there's a lot of other exciting things happening in crypto beyond Bitcoin. But I think that thesis and then when you take that thesis and you just compare it to the TAM of some of the things that could be disrupted, it becomes clear that this is still very early innings.

And for me, those are the types of investments that I like. Ultimately, I think what you want in an investment is something that has a really big upside and not too much downside. I think Bitcoin kind of fits that mold perfectly. Yeah, my day job, I work at Wealthfront.

We have an automated portfolio that we offer people to help them build their wealth. And we recently announced that cryptocurrency is something we're exploring bringing onto the platform. But when I talk to traditional financial planners and financial advisors, it seems like crypto is not something they're considering putting in the portfolios for their clients.

How far out are we from mainstream investment kind of practice being including this asset class? I think the key qualifier there is investment practice. We're already well along the S-curve, I think, in terms of adoption of crypto. It's hard to get perfect data, but there's estimates that 10 to 15 percent of Americans own cryptocurrency.

Well, only about half of Americans own investments. So out of your population that owns investments, you're already at 20 to 30 percent in the U.S. And so that's not nothing. That's not like a fringe thing off to the side that can just be completely written off. The establishment of financial management infrastructure, whether you're talking about banks or private wealth groups or financial advisors, these things take time.

And I think that in 2017, we had a big run up, we had a lot of retail adoption, which is really cool because this thing really came about driven by retail, which is pretty unique. And then it cooled off and everyone was like, oh, yeah, maybe it's dead. Then COVID hit and Bitcoin went down a little bit.

But then COVID highlighted for us how everything that's digital is preferred to its analog counterpart and how stores of value that can potentially retain or increase in times where we have a rapidly expanding money supply are important to have in a diversified investment portfolio. And Bitcoin just nails it on both of those points.

So we come out of the financial craziness caused by COVID and Bitcoin does a 5x in six months and then everyone's like, OK, it's actually here. This is very real. So this is the first time that big institutions and the establishment is starting to say it's actually real. And they're all in the process of figuring out how to integrate it into what they do.

You're seeing it with fintech companies like Square and PayPal and others. I'm a Wealthfront user and I'm really excited for the day that I can either just automatically or based on some configuration have Bitcoin as part of my portfolio on Wealthfront. I think we're going to get tremendous adoption on that.

And that's part of the underlying trend that's going to drive the ecosystem forward. And ultimately, when you're dealing with something like Bitcoin, there's a finite supply. And if you get more adoption, there's only one kind of market impact that can have, which is that the price will likely be higher in the future than it is today.

Do you think there's any truth to the idea that establishment finances, the traditional banks, they're not hyping and pushing and talking about crypto being part of everyone's portfolio because they're still a few years behind and being able to tap into the ecosystem themselves from a technology or infrastructure standpoint?

I think that's the entirety of it. It's like a switch flipped. And as soon as there was a decision within some of the big banks that, yes, we are going to develop a crypto strategy, then the messaging flipped from, "Oh, this is a fraud and a scam. Don't pay attention.

It's a bubble." The price target on Bitcoin is $400,000. We're working on a product to put it in our private wealth management portfolios. Come talk to us in six months. And that's literally happening in front of our eyes today. No, that's it. So, yeah, I think a hack is that you have these institutions that aren't necessarily publicly embracing it as much as they want to, but if you hear them in industry conversations, they're all in on it.

They have huge desks working on it. So by the time they're tapped into the ecosystem, I have to assume they're going to be talking about it a lot more. And if you're a part of something before that kind of a moment happens, it usually is good for the people that were in early.

Absolutely. Yeah. So we're talking about traditional finance, traditional investing. I'll deviate for a moment from crypto and ask, you've been in this industry. Are there things, hacks, optimizations when it comes to investing that you think people should be thinking about outside of crypto? I'm a big fan of Wealthfront.

I basically, outside of crypto, have a part of my portfolio that's just diversified across stocks and bonds and auto rebalanced, and I do all of that on Wealthfront. I have a part of it where I more actively invest in tech stocks and do other things, which I'll talk about.

And then I do a little bit in private equity and real estate. One of the things that I think, if people have the time and the inclination, can be really valuable and is a total hack, is just getting comfortable with options and learning how you can increase your returns from a position, either before you get into it or while you have it, just by selling options.

So I'll give you two examples. If you've said to yourself, "I'd like to buy XYZ stock," one thing you could do is just go buy it. Another thing you could do is you could sell a put at or above the current price that the stock is trading at, and then you collect a premium.

So you're basically decreasing your cost basis on the stock by getting into owning it that way instead of just buying it outright. Similarly... And just for someone who doesn't know what a put is, when you're selling a put, what are you doing? When you're selling a put, you are selling the right to someone else to deliver a stock to you at the price on the put.

So I can say, "I want to buy Amazon stock." And I could say, "I want to buy it at this price." And someone will actually pay me to say, "In the future, I want to buy it." Exactly. Instead of me buying it, I can get paid and then buy it later.

Do you always get to buy it? Is it only if the price goes up or down or what are you giving up? You're giving up the certainty of owning it now. That's basically what you're giving up. So let's say Amazon is trading at $100 and you want to sell the put at $105.

So there's probably a pretty good chance that as long as Amazon doesn't go up above $105 between today and the expiration of the option, that you're going to end up buying it. And you might get paid for selling that Amazon put at $105, $7. Your effective cost basis on the Amazon stock, assuming you get ownership of it, would be like $98 instead of $100.

So you got a deal just by giving up the need to get it right now. Exactly. You're basically using time and volatility and your willingness as a market participant to be a certain kind of way for a long period of time up. And someone else who might be more, they might be looking to hedge or they might be a little bit of a faster mover in the markets, they're paying you for that optionality that you're giving them.

And then similarly, once you own stocks, you can sell out of the money calls on them and you give up a little bit of the upside, but you also create some income. And as long as you do these things in the right way, based on your objectives, I think people can pick up an extra 5% to 15% a year on top of whatever their general portfolio performance would have been.

And for the second example, that would be, "I own a stock. I want to sell it, but I'm not going to sell it today. I'm going to sell a call that means somebody can buy it from me in the future. And by letting that time go on, I get a better price, or at least I get income now.

I might not get a better price in the future, but I'll get income now." Exactly. So let's say you work at a company that went public and you're holding a ton of company stock and you're like, "I want to get rid of this over the next 12 months or some of it." You could just be earning money while you're waiting.

And unless you have an urgent need to sell it today, this could just be like a passive income stream. Sell the calls all day. Yeah, that's great. Anything else in that space? Wealthfront's a great hack. I used to play the points game. There's so much stuff you can do with a good credit score.

Maybe the big hack is just focus on getting a good credit score if you don't have one yet. And then you can monetize that in all kinds of ways over time. Yeah. I was blown away. I drove a car that was a 2003 for almost 12, 15 years, and then I was like, "Oh, I got to buy a new car." And things had changed.

I was like, "Wow, if you have a good credit score, maybe the car manufacturer has a great deal right now where it's 0% financing if you have a good credit score." And not, I shopped all these local credit unions, and I want to say three, four years ago, we ended up getting 0.99% APR, which is an interest rate that I don't even know how that's possible, but I know that they had credit score tiers, and if you didn't get the right credit score, you were getting a much worse rate.

Focus on your credit score. If you're out there, you're under the age of 25, and you haven't figured this one out yet, just create a Credit Karma account, know what your credit score is, and do the stuff you need to do to get north of 680. Yeah. Let's do it.

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You mentioned earlier you had this blog where you were sharing all these ideas before you started BlockFi, things like fractional real estate. Anything back then that you thought was really interesting that you ever thought, "Gosh, why is no one picking up on this? This is so cool"? I mean, buying crypto was a big one.

This was back in 2014, so I was like, "Phew, more people should be buying Bitcoin." I also wrote about a thing on there. This is kind of more of a novelty at this point, but it was called Billshark. Yeah. Basically, it's these people that you could pay to call the phone and cable company on your behalf and just tell them you needed a better deal, and they would take 20% of however much they saved you or something.

I thought that was hilarious. I don't think it's around anymore. It's probably not around. No, no. There's a company out there. I think Billshark might still be around. Really? I think there's a company called Trim that does this. I'll put a link to whatever the right company is in the show notes and everything else we've talked about.

But this is a thing, and if you want to take the time to do it, you can call Comcast every 12 months and say, "Hey, I'm going to leave if you don't give me a better price," and you could do that. Or there's companies that will do it, and not only will they save you the time, but you have to assume that someone who's living is calling Comcast to get a better deal, knows how to do it better than you do.

So it's just what do you want to spend time in your life, and what do you want to outsource so you don't have to think about it? I think that's it. I think those are the biggest things. To come back briefly to crypto, you mentioned you used to play the points game, and you guys have a credit card coming out.

I know because I've been doing everything I can to move up the list. Can you talk a little bit about that? Yeah, sure. We're launching the world's first Bitcoin rewards credit card. It's going to start rolling out this quarter to folks on the waiting list. The card has a 1.5% base cash back rate on every purchase, which we automatically convert to Bitcoin and move into your BlockFi account where you can earn interest on a trade, get a loan secured by it, et cetera.

In addition to that base cash back rate, we're giving folks a 3.5% cash back rate for one quarter in their first year, and there are other benefits on our platform for cardholders. So cardholders will earn an extra 2% on their stable coin balances at BlockFi. They'll get a rebate on any trading volume that they do of 25 bips, and they also get a higher refer a friend bonus of $50 instead of the normal 20 for anyone that they tell about BlockFi.

So we're really excited about it. We think that there's a lot of folks that have bought Bitcoin and become very excited by it, who just want ways to earn more all the time and integrate. That's the thesis for this show is I'm on this quest. All I want is more.

How do I get the most out of spending? How do I get the most out of savings? And look, if this card would have been out at any point in time in the past and you were earning Bitcoin, you would have earned way more in rewards at the end of the day by just auto-converting it into Bitcoin, and then on top of that, getting interest on the Bitcoin in your BlockFi account than any other rewards card.

It would blow everything else completely out of the water in terms of value that you get. But we also think it's an exciting moment for the industry. Another part of this mega trend of integration into the traditional financial system and more people getting access. And we think it's a product that will hopefully reduce the risk and complexity of someone that hasn't bought any Bitcoin yet, getting their hands on Bitcoin for the first time in a way that they're familiar with.

Everyone, just about everyone, if you don't, you're living under a rock. Everyone knows how to earn rewards on a credit card. And so it's a really familiar and unintimidating way to get some Bitcoin. Yeah. I think one thing I regret, I searched my history before this for all my emails from Coinbase, and I looked back and I was like, "Man, in 2013, I bought 30 Bitcoins?" Wow.

And then I'm like, "Ooh, in 2014, I also sold 29 Bitcoins." And I felt like a hero making 30% return in one year. And then throughout the years, I found random ways to buy things for fun with Bitcoin, and I never replenished it. And so it just seemed like it never made sense to go buy $5 of Bitcoin today, $50 of Bitcoin tomorrow.

The other thing I'm really interested in this card is it automates something that you want to do, but you don't want to think about every day. And I think it would be really cool, whatever you want to save in. Obviously, this isn't what you're building, but if you could just automatically have all of your excess cash, excess savings, credit card points, go into some predetermined formula that, "I want to every month buy $100 of Bitcoin.

I want to save $20 towards this vacation. I want to put $200 towards my kid's college fund. I recently launched a service at Wealthfront called Autopilot where you can automatically save to all these destinations." It would be so cool if you could tap that in, do it over the blockchain, save to whatever you want, whether it's crypto or a college fund.

That's my dream credit card. But this seems to be the first credit card that comes close, and I'm very excited to be high on the wait list. Yeah. Hearing you talk, it made me think of that expression from Dollar Shave Club, "Shave money, shave time." I think at the end of the day, that's what it's ultimately all about.

There's stuff you can do in the financial world and with hacks for fun, but I think we all hit certain points in our life or just in general have a desire to reduce complexity and just set things up, know that it's running, and not have to think about it or take action to keep whatever plan you're doing in motion.

And I think that that type of tool that you just described is fantastic. It's clearly a big hack. You just got to get the Bitcoin allocation in there. I know. But automation is such a hack. The more people that have to wait every month and decide to save versus set it on recurring transfers.

I know that's something you guys support. I can make recurring buys. And if you want to invest in Bitcoin and you don't want to think about it, you could just set that up. Precisely. So we talked about Bitcoin a lot. We talked about crypto as a category. There's all these other things outside of stablecoin.

There's Ethereum and there's just millions of other coins with totally different names. Some that sound like toys, some that sound like a kid's game, some that sound more serious. Dogecoin's been wild in the news. People have been talking about it like it's the craziest thing. When you talk about crypto and you talk about investing in the market, are you talking about Bitcoin?

Are you talking about everything else? How should someone think about all the things as they're thinking about it as a place to invest, as a place to explore? Yeah, look, there's a lot going on in the crypto world. The mental model that I have for things is that you've got the store value kind of Bitcoin category of crypto, and there's Bitcoin, which is the clear leader in a couple copycats.

You've got a category of protocols, which was really started by Ethereum, and the idea there is that you can make a blockchain a little bit more like an iPhone, where there's also a capacity to build apps on top of it. And you've got a whole category of folks like that.

And then you're also starting to see as a subcategory, some of the first applications that are really catching on. And that's where things like NFTs are coming from. But when I think of crypto and the investment opportunities that come from it, I would think of buying Ethereum tokens as a play on that adoption that these applications that are built on top of Ethereum are going to get.

And then you have a third category, which is like traditional assets being tokenized. And in that third category, the big thing today is stable coins. There's really two interesting things you can do with stable coins. One is use them as a vehicle to earn a yield, a really safe yield in this crypto world that doesn't have access to bank financing yet.

And then the other thing is you can make cross-border payments dramatically more easily than you can using the traditional system, because in crypto land, there's no concept of, oh, there's a border here in between the US and Mexico. It's just like the email just goes through, you know, just goes through when you send it to someone else.

So those are the three buckets. My personal crypto portfolio is as follows. I have 90% Bitcoin, seven, maybe 8% Ethereum, and then I own a little bit of Solana, which is basically the up-and-coming Ethereum competitor. So if you- Kind of hedge. If Ethereum doesn't work out, you've got the backup.

It's a little bit of a hedge, but it's all about risk tolerance. I haven't done anything with Dogecoin or NFTs because I'm not really a meme stock, time the markets kind of person. I like buying stuff- Me either. I like buying stuff that I can have a long-term view on and not put myself in a position where I might feel like I need to day trade it.

That's what I do. Yeah. And I think one interesting thing was if you were around 20 years ago and saw what was going on with the internet and you're like, "Wow, this is the future. I think everything will be online," there was not an easy way to make an obvious bet on, "I'm going to invest in the internet." There wasn't an option.

What's happening on Ethereum, the kinds of software getting built on top of it and programs, is buying Ethereum, the token, effectively a way to bet on that whole network being the way we do lots of things on the internet? Similar to how mobile brought about this whole world of apps and everything, and can the blockchain with Ethereum do that?

And if so, is buying Ethereum tokens the way to bet on things in the future happening on the blockchain? I think so. I think it's the best way I can think of. I don't know of a better way to holistically express that view than buying Ethereum. Ethereum is like oil meets stock in the company that makes the network, but it's definitely not stock and it's also not precisely oil.

So it's like in between those two things, but I do think it would be the thing to buy if you want to express a view with an investment that, yes, these applications built on top of blockchain networks are going to continue to expand and gain adoption. I think Ethereum is the way to play that.

Yep. And I think that's something that a lot of trends people see, there's not an easy way to bet on them. If you thought mobile was cool, yeah, you could bet on Apple, but who knew that there'd be all these companies that are monetizing these apps and Instagram would be huge and WhatsApp would be huge.

There's too many things to bet on. And this is one of the first times in my kind of career/life that I've said, wow, this thing I think could be really powerful. And there's actually a way that a regular person could invest $1 in, and you don't have to be a venture capitalist to invest in the company.

And I think who knows what the future holds, but the sheer fact that you can participate in it with any amount of money, I think is something that hasn't happened in the past and I'm pretty excited about. It's really, really powerful. And I would add globally, it's not just America, China, Europe, Africa, like literally this thing is open like the internet.

And so I think that's also really powerful and frequently underestimated because we're so used to just thinking of things in our U.S. centric view or folks in other countries are used to thinking about their market, but this is really a global market and so that's pretty powerful. Yeah. I think that's amazing.

Thank you so much for joining me. Where can people find out more about you and BlockFi online? Thanks for having me, Chris. We're pretty easy to find, blockfi.com is our website. Like I mentioned earlier, we really love hearing from folks, so don't hesitate to reach out to us or give us a call.

I'm on Twitter. My handle is @BlockFiZach. I'm usually pretty good about responding to DMs and I also like hearing from folks personally, so don't hesitate to follow me or shoot me a note on Twitter. Cool. Thank you so much and have a great day. Thanks, Chris. I'm a big fan of BlockFi, so I hope you enjoyed this episode as much as I did.

And thank you so much for listening. As always, you can reach me at Chris@allthehacks.com or @hutchins on Twitter. And if you're enjoying this show, please consider sharing it to anyone else you think might enjoy it or leave us a rating and review in the podcast app. That's all for now, see you next time.

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