Cat Hess:

Thank you for joining Office Hours. Today we have Matt Kress, director of Digital Assets and Advisor Innovation for WisdomTree, Eric Ervin of Onramp, Mark Phillips of Harvested Financial, Rich Archer of Archer Investment Management and Ryan Firth of Mercer Crest, for discussion on decoding digital assets and engaging discussion with forward-thinking financial advisors.

Matt Kress:

Thank you Cat, and thank you everyone for being here and thank you to the awesome guests. And this is going to be a great discussion today. I'm really looking forward to it. So like Cat mentioned, I'm Matt, I'm your host and moderator for today's session. I'm director of Digital Assets and Advisor Innovation at WisdomTree and the guests here are the stars of the show.

So like Cat, introing everyone, if you could, I'd love to hear, because I think it'll really help frame the discussion for the group, if everyone could give a quick introduction, just tell us a little bit about your firm, what you do, how you got into crypto, and then I want to pull up some polling questions that I've done in the past and get your thoughts on it and then we could dive into the discussion. And the four main parts of the discussion, understanding you all, digital assets and your clients. So then talking about risk, volatility, regulation, thoughts there. We can spend hours and hours on that. And in the future of digital assets. So in the order, if we could go ahead and just go in the order, let's start with Mark and then Richard, and then Eric, and then Ryan.

Mark Phillips:

Sure. Hi, I'm Mark Phillips. I'm the principal at Harvested Financial and I came to crypto from an options and volatility background. So prior to becoming an advisor, I was a market maker in equity options, enlisted equity options and trade volatility. And so in launching my advisory, I thought I was going to be focused on equity options until everyone started asking me about crypto options. And so I had a little experience in that in the past, trading some of them, dabbling personally. And that led me down this giant rabbit hole where I find myself managing some digital asset portfolio for my clients on the registered side. And then I also manage a hedge fund where we do some seed investments in Defi and trade digital asset volatility strategy there too.

Rich Archer:

Okay, I guess I'll go. Thanks Mark. I'll go now. My intro to crypto, first of all I'm Richard Archer, Archer Investment Management in Austin, Texas, and we work with a lot of mid-career tech professionals. So you can see crypto is probably a conversation that we have a lot of the time. And we do financial planning and investment management. We'll directly invest in crypto, cryptocurrency tokens and also the stocks related to blockchain, as well as everything else that clients need. And I was first introduced to crypto, I mean obviously I was aware of it, but I had a client call or potential client call with three and a half million dollars all in various tokens or cryptocurrencies and he was looking for help diversifying out of that. And I realized that I didn't know enough to properly advise him, so I quickly got ramped up doing the DACFP and then the CDAA exams and realized that there's a whole space that is being completely underserved and there's a lot of do-it-yourselfers out there that need our guidance.

Eric Ervin:

Great. Hi everyone. I'm Eric Ervin. I'm the CEO and founder of Onramp Invest. Onramp is a tech platform that enables advisors like Richard here on how to access that digital asset asset class. So we plug into qualified custodians so that they can onboard their clients, open accounts, trade accounts, diversify out of crypto in some cases, and then get those assets back into the traditional world. And then really just manage that whole experience. We also plug into a lot of the different SMA managers, WisdomTree being one of them. So you can kind of get that full turnkey asset management service in the digital asset ecosystem.

And myself personally, I was a financial advisor for 20 years, so I can really empathize with what a lot of advisors go through in this asset class. For me, it was the tech boom. I was in the nineties and everybody wanted to put all their assets into tech stocks and it was more like, hey, let's just have a taste of that. We don't need to go all in on that. And now I kind of see that exact same thing. But if I'd have just told them no, then they would've ended up going off and doing it themselves and blowing themselves up. And so it was always a better approach to just say, yes, but not so much. And that's kind of why Onramp was born and it exists today.

Ryan Firth:

I'm Ryan Firth, I didn't do a sound check so hopefully everyone can hear me. I do advice only planning, so I don't manage assets, strictly hourly background as a CPA, though not tax, more on the audit side. I got into crypto some years ago, just had heard of it through I think an NPR production and they mentioned the Silk Road and I thought, oh, this sounds interesting. It was an interesting backstory and it talked about Bitcoin. I'm like, okay, let me look up Bitcoin. What is this thing all about? And the fact that it's decentralized in a blockchain that anybody can view, I just found it fascinating putting on my CPA auditor hat. So I've been down the rabbit hole since.

Matt Kress:

That's great. I love hearing the different backgrounds. So we have just kind of all over the board. So for everyone here listening, please feel free, we're going to go down different paths, we're going to have the discussion, but feel free to use the chat feature, use the Q&A feature to ask questions. We'll either answer it live depending on if it makes sense just to jump in right away, or we'll push it to the end. We'll try and make sure that we're saving some time near the end.

So to kick things off, I didn't tell anyone except for right before this I was going to pull up a few things. I want to share a few different polling questions I've done on various presentations to advisors. So they're polling questions about crypto and I want to just have a quick discussion and a quick couple of thoughts on that.

So the first one I'm going to pull up is a word cloud. This was to a group of advisors on a presentation where we're doing kind of a crypto 101 educational, basically, presentation. And the question was, what's the first word that comes to mind when you think about cryptocurrencies? Can everyone see this? You could see the bigger the word, the more often that came up. What are some reactions? Mark, what's a quick reaction that you have from looking at this?

Mark Phillips:

I'm drawn to a lot of the words with a negative connotation, I might say. Some of those seem larger than the technology related words, for example.

Matt Kress:

Yeah, Richard, Eric or Ryan jump in.

Rich Archer:

Yeah, I think I agree with 90%. They're all part of the space and it's a growing space and it has had a questionable past 10 years, but any new technology is going to have that. So I don't disagree with this, honestly. It's pretty accurate, I think.

Matt Kress:

Yeah.

Eric Ervin:

It's funny when you think of all the major hyped up AI to biotech to all these things, a lot of people do come up with these negative connotations because it does get hyped and it gets nonsensical and it brings in a lot of hooligans and just nefarious actors and this kind of fits with that, the cell phone, et cetera. But there is a lot of good that comes from it as well and that rarely makes this conscious mind of the community.

Matt Kress:

And that's something, and Ryan, I'd love to hear your thought, especially since one of the things that pulled you most to this was the transparency, but you could see a lot of questions here around fraud and there was shady, just all these different kind of words. What's your thoughts?

Ryan Firth:

Yeah, I mean blockchain is a tool. It can be used for good or bad, like any tool. So I agree with everything on here, I would probably feel the same way. And even before, like I said when I went down the rabbit hole, I was still kind of just more curious than anything. So keeping that mentality, keeping an open mind is important I think when dealing with crypto.

Matt Kress:

And that makes a lot of sense and I wanted to share that because just the first word that comes to mind, I'll pull up another one on comfort level. And then I'd love to hear about what are some of the things that have helped you all get a little bit more comfortable. Is it just time? What are the things that helped you get comfortable talking to clients?

Richard, you mentioned that you didn't feel prepared when that client came with, was it three and a half million in cryptocurrencies or crypto assets that you're trying to figure out? What helps you all be more comfortable with the discussions and everything you're doing?

Rich Archer:

So for me it was just getting educated, reading some books, doing the DACFP exam and also the CDAA with Adam Blumberg's Interaxis was amazing at... Once you go through and actually do some crypto transactions, you start looking at the tokens, you do some research with Onramp and you start putting your own money in there, get your own wallet, start learning about how to be safe on the blockchain. It all becomes a lot less scary and it's actually quite intriguing and it's a rabbit hole you can go down, because it's really interesting and if you don't believe this is the future of finance, then you don't understand it.

Matt Kress:

That is a powerful statement. Thinking about the future of finance, not just a new asset class, but understanding the technology.

Mark Phillips:

I very much agree with Richard there. I think we were saying before how people come to crypto for a lot of different reasons. And personally, it was a finance driven reason, but there are a dozen different reasons that'll bring you to crypto. But then the reason you stay is by understanding the technology or understanding the financial applications or understanding the potential for creators that NFTs provide that by learning more about the different use cases and underlying technology, it really gives you such a deep appreciation for this and more confidence and conviction to handle the financial volatility of investing in an asset like this.

Eric Ervin:

Yeah, from my perspective, I came at it from, and I didn't mention this earlier, but I ran an ETF company for 12 years. And in 2016 when we were spending millions of dollars on fund administration, transfer agents, custody, all of these things, and I just kept thinking... And every night we would send spreadsheets back and forth with our administrators, with our index providers and we had to send faxes to Bank of New York for our fees. This is in 2016. I had to figure out like, oh, how do I get a fax now in order to get our fees. And I just thought there's got to be a better technology for all this, like a centralized database where everyone talks to, but yet it's not so centralized that one company owns it. And that's really what got me interested and excited behind blockchain and it is so much bigger than just crypto.

But at the same time I thought, oh, blockchain not crypto. And then as I went farther and farther down the rabbit hole, I started to appreciate the benefits of having this token that actually contains value. So yeah, it's kind of like everybody talks about the rabbit hole. It really is a rabbit hole. You start here, you go deeper, deeper, deeper, and then just things just start unfolding.

Ryan Firth:

Yeah, I say there's no expert in blockchain or crypto. I mean people know a lot of things and there are people know way more than I do. So it's a constant learning process. It's taken years and years and I'm always learning something new, even from clients. So I don't think that you can know everything well in this space, but it is really cool to watch how things evolve and learn as you go. So again, having that curiosity mindset I think is important.

Matt Kress:

Yeah, that's great. And one thing that everyone basically said is start somewhere. Start somewhere. Just dip your toes, get a little knowledgeable. If you gave one tip, if you have one tip to give advisors here, anyone here who's looking to learn a little bit more and start getting more comfortable, do you have resources or thoughts on, hey, go here just to start reading things that aren't sensationalized media headlines or jump in here. Could everyone give one or two pieces of advice that you'd say, if nothing else, leave today and do this one thing?

Rich Archer:

Yeah, I can start. For me, the first thing I did was I looked at... Rick Edelman's a big proponent of cryptocurrencies and Bitcoin and he wrote a book about cryptocurrency and it's very approachable, it's short, and you can kind of get the gist of the why for crypto from that. And I took that a step further and did his DACFP course and I did it in a weekend and you get a quick flyover and you're kind of like, oh, that's what everybody's talking about. Oh, this is why this, this, this, oh, and then after that then you're off to the races. That's what I did.

Mark Phillips:

I'm going to encourage everyone to download a software wallet and go out and explore something in Defi. And whether it's MetaMask, whether it's the Coinbase wallet, whatever works, go play around with Defi. That as advisors, as people that are interested in finance and the potential for this, just putting a little drip out there and seeing the way an AMM works, an automated market maker, understanding staking, just getting your toes wet is really an eye-opening experience.

Eric Ervin:

Just to play on that, that was the first thing I would do for anyone that I was talking to is I'd say here, just open up, create a wallet and let me just send you something. And then watching that you can send money at midnight on a Sunday night, you don't have to wait for the banks to open and it all just happens. There's no wire transfers, just that concept of oh wow, how cool is this? That was really the first fun moment for me is just watching money just move from wallet to wallet to wallet, all in a circle, like getting five people and say here bing, bing, bing, bing, binging.

And not to plug Onramp, but we basically created a whole Onramp Academy that's free for everyone. It's really focused on financial advisors. So there's primers in there, there's fact cards on what each asset is. There's tons of stuff. There's stuff for compliance officers. And it's, again, free. It doesn't have anything to do with our business, it's just there for financial advisors to get up to speed on the asset class. I hope it's good. I think it's good. We've written a lot of good stuff there and yeah, it's a good start as well.

Ryan Firth:

I probably don't do anything as structured. I agree with Mark's sentiment about just getting your hands dirty doing it. That's how you learn best. That's how I learn best anyways, so I'm sure that's how most folks would. Just doing research on the internet. And I know some sources aren't very reliable, but you do kind of get some interesting perspectives and sometimes they're not always pro-blockchain and crypto. And again, I just have that mindset where I want to understand the pros and cons of anything. So whether it's negative or positive, I just like to get other people's perspectives. So again, I just do Google searches and whatever comes up on my Google feed really to keep up.

Matt Kress:

Those are great points and I want to double click on one thing. I think Mark you might have said is a couple dollars, you don't have to buy... You can't buy, or it is not just one Bitcoin or nothing. There's fractions down to eight decimal places. You can go to some sort of exchange, you could get some sort of wallet or application that can help you and say, I'm going to test something. It's not, I have to spend whatever the current rate is exactly for a Bitcoin is that I'm going to buy that whole thing.

Eric Ervin:

And know that there are transaction fees in this ecosystem. There is a cost of doing business, and so if you take a hundred dollars and you start moving around and depositing in some staking pools and doing all these things, don't expect you to be earning the hundreds of percents on your hundred dollars. Probably a lot of it's going to get eaten up in fees, I'm basically interacting with society and there's no middleman. There's just software in between, which is just so cool.

Mark Phillips:

Transaction fees are so low that if you tried to get involved a year and a half ago, you would've paid a hundred times the cost to do it, to send money on Ethereum.

Matt Kress:

Yeah, and I would add one other tip in addition to all of that is, if nothing else, you can go to LinkedIn, follow a couple people, just search crypto, follow some people go to X now, I guess Twitter, you can go to tweetdeck.twitter.com. It might be tweetdeck.x.com, but you could basically create a list and have it be a column view of what are people saying in this space. And you could follow different magazines, publications, you could follow people on there. That's just a good way just to get quick information that's not always a headline from a regulator or a senator or something of that sort as well. So that's a great way to go to research. You could also go to wisdomtree.com/crypto. We have educational content there as well.

So I want to jump into portfolios when you guys are thinking of, and everyone's kind of thinking of clients, types of advice, how you think about it. I've had a lot of advisors ask me and say, well, I don't know how much to allocate. I don't have a ton of time to spend on this. How do you all think about that when it comes to, and I know every client's different and you have different responsibilities there, but could you talk a little bit about how you think about that with your portfolios and crypto portfolios?

Rich Archer:

Yeah, I can start on that one. I have clients who have their own crypto wallets that they're doing their own trading and then we do some as well. And sometimes we'll do more or less depending on what they're doing outside.

And I will say that there's, as Eric alluded to earlier, there's more than one way to invest in crypto because there's the blockchain, which is the software if you will, and then the cryptocurrencies are the tokens, which is the currency on the software. You don't necessarily have to own both or one or the other. But for our clients, we actually have both blockchain stocks, which are doing quite well right now, and also the cryptocurrencies. And some of them have direct investments and some of them have them through exchange traded products right now, just depending on their comfort and the amount of risk they want to put in their portfolio.

Mark Phillips:

For some of my clients that aren't necessarily exposed yet are dabbling in the idea, But the potential to learn, the potential to stay tapped in and understand where this industry is going, how it's evolving, that is worth its weight. So just getting a little bit involved. And that's probably how we all got involved in stocks or bonds in the first place too.

Ryan Firth:

Yeah, that's a good point.

Eric Ervin:

Go ahead Ryan.

Ryan Firth:

Oh, go ahead. No, please. All right.

Matt Kress:

Yeah, that's a great point. Mark, were you going to say something?

Mark Phillips:

No, just nodding totally. There's nothing like experiencing volatility firsthand to know what that stomach churn feels like.

Matt Kress:

Yeah. So one thing, and Ryan, you kind of hit it and led to where I wanted to go anyway, so I think that's perfect is conversations. You mentioned with that client, you brought it up. Rich, you mentioned you had a client come to you and say, Hey, I have this, can you help me a little bit? How do you all approach those conversations and what are some pieces of advice that you could give other advisors around and where might you want to do better with that? Even talking with other advisors right here around client conversations, first bringing it up and then over time having those conversations, whether it's around volatility or just what is it?

Rich Archer:

Yeah, Matt, that's a fantastic question. So couple of big points here. One is a lot more of your clients are in crypto than you know about because afraid to tell you about it. So start asking those questions and find out where their knowledge level is. Some of them might know 10 times more than frankly, and you can learn from them. And others are vehemently against it. So finding out what the temperature is a really good idea.

The second thing that I found is to take it slowly because you can scare clients with crypto, because there's so much noise about it on the news to the extent that you can educate them ahead of time, let them know what you're thinking. You're thinking about an allocation and this is why. Because we're discretionary investment managers, so we've added it across the firm.

And then going forward when it's volatile, because it will be, when it's volatile, explain that that's what we're... If you haven't told them that already and reconfirm it, this is what we are expecting. We're expecting volatility, and this is, I kind of call it scratch off lottery tickets sometimes to some clients like, listen, we've got a diversified allocation of different positions here. Some of them are going to hit, this is a new industry, it's bleeding edge and this is going to be the exciting part of our portfolio.

Mark Phillips:

Yeah, I think there are no shortage of opportunities to reach out to clients over crypto. There's always something in the news, whether it's the mainstream media, whether it's just the crypto media, there's always a talking point and to the idea that many of your clients are going to end up more sophisticated than you. I learned something in every conversation. And so having those constant touch points say, Hey, did you see what happened with Luna here or XRP or whatnot? They might know five other details that really help bring you back into the fold. And if there are down moves. Look, Bitcoin got cut in half. See how that feels, not so bad. I think it's on both the ups and the downs, the good and the bad, there's no shortage of reasons to talk, and more is better

Eric Ervin:

Also, just to remind everyone that there's 60 million Coinbase accounts and even growing. So your clients probably have made an allocation. If you think about the investing US population, it's not 300 million, it's probably like a hundred million. And so kind of ask them to get their crypto out of the closet. And they don't have to be embarrassed to talk to you about it anymore because the financial advisor industry has kind of shunned it for the most part. So I think it's a huge opportunity to, if you wanted to attract new clients, this would be a great way to do it is just say, who handles your digital asset investments. And then, to me, it's just a huge opportunity and all those clients need help. A lot of them are woefully either over allocated or they just don't know what they're doing and they're trading their brains out. And so it's just a huge opportunity to do the good work that advisors do. And again, I just get really excited about it as an asset class.

Ryan Firth:

I think that every client's going to have their own situation or perspective on crypto, whether good or bad. I think others have mentioned that. So just kind of meeting where they're at and understand and it is a good insight, like I said, into their risk capacity, risk tolerance. So it's a good barometer, a good test. And a good conversation starter whether, again, finding that appetite like Rich mentioned, are they really interested or not? Or are they just really...so hope it leads to deeper conversations with clients.

Matt Kress:

Yeah, that's a great point. I've had different advisors as well say, depending on their clients, if they're looking at intergenerational aspects and trying to build trust and in relationships across generations, they might have those conversations. They might, especially with Rich, I know your practice is a lot more tech focused and people who are going to be a little more savvy than a lot of clients today of advisors out there. So I think those different conversation points are really important and just important to bring up and can be really helpful to the broader aspect and that broader relationship.

Thinking of the broader picture, and we've talked about regulation, we talked about headline, how do you all juggle and manage conversations around different headlines, whether it's a regulatory related headline or are you more active in conversation? How do you have those... Are you proactive? Are you just reactive? How do you have those conversations and juggle those conversations around key points?

Rich Archer:

Yeah, it's a good question, Matt. So it seems like there's a new neon headline every day in crypto these days, with the SEC and all that they're doing. I kind of like it, frankly, because better than them ignoring it, at least we'll get some regulation. I think we need regulation. I'm looking forward to making the compliance a little bit more black and white and get some rules on taxes and everything else. The more clarity we get, the better.

So I'm inviting the conversations and of course the SEC or whoever, whatever regulatory advisor is going to argue their position and then the crypto industry is going to argue their position, they're going to find some happy medium somewhere by the time it's done, it's going to be... We're watching the sausage get made right now, but when it's done, I think it's going to be fantastic for the industry.

Mark Phillips:

I think regulation is incredibly bullish for the industry, and I think if you look at that word cloud that we saw at the beginning of this, people are rightfully concerned about all the potential scams, snake oil salesmen and fraud and bitcoin and whatever else is on there, that it’s a real valid concern. And it’s hard to deploy capital in a place where you feel like you’re going to get fleeced and the rug pulls, the bridge hacks, the whatever it’s going on out there, that doesn’t make institutions or individuals confident in putting money into this. And so to the extent that we have better understanding about who the actors are, what's the security, what a walled garden KYC look’ like, how we bridge real world assets onto here, that’s going to be incredibly bullish for the winners and compliers with the eventual regulation.

Matt Kress:

That makes a lot of sense. It’s definitely a topic that’s important. How do you wall, when you think of your practice, what goes into preparing for everything for digital assets? I know a couple differences here, but when it comes to disclosures, when it comes to forms, when it comes to everything that you have to do, just to set yourself up for this, how have you all managed that and juggle that with the firm, with your firms?

Rich Archer:

Yeah, compliance is a big deal, obviously as fiduciaries and so it’s all about disclosure, disclosure, disclosure, right? You’ve got to update your ADV, you’ve got to update your client contracts. You’ve got to let clients know and send them emails and information and make sure you speak with them one-on-one. We also worked with a crypto specific attorney out of Houston to talk about our practices and our emails and how we’re making sure that we’re disclosing everything properly.

And also we worked with our insurance broker to get a policy or underlying policy that allows us to have coverage for cryptocurrency investments. And that took a little bit of work, but it’s a little bit easier than it was a few years ago now. And at the end of the day, you can disclose and do all the compliance, but if you’re scaring your clients or if your clients are unhappy, you’re going to get fired. So end of the day, make sure that you’re not surprising your clients with cryptocurrency and Bitcoin, whatever else, investments, let them know ahead of time and ease them into it. And if you take the time, it’ll solve a lot of problems, future potential problems if you take the time upfront.

Matt Kress:

Yeah, that’s a great point.

Eric Ervin:

We’ve, because this came up all the time early on with Onramp. Onramp is basically a technology platform for these advisors, but we wanted to be more. So eventually what we started to do was we hired some compliance consultants to write ADV language and to create some policies and procedures and other things like that. So if anyone would like that, we’d be happy to share with anyone on the call. Just feel free to reach out. I do recall when...shares, we had which is the blockchain equity ETF, and our first SEC exam was prior to that. So that was kind of my first experience as an advisor with the SEC exam.

And then once we launched that, it was like six months later, we had another SEC exam, which you know as advisors, that's pretty unique to have another SEC exam just six months later. And the questions they were asking were crypto related. So this was an equity ETF of IBM blockchain related companies, and the questions were, where's your crypto stored? And we had to explain to these examiners, there's a difference between blockchain and crypto. This is not a crypto fund, this is not...

And so really I guess my point is that the SEC is not trying to hurt you. They're just trying to learn. And these are usually kind of younger examiners that don't know a whole lot about the technology and they don't know a lot about your business. And so it just kind of gave me the insight of, oh, okay, so really the approach is just let's be educated or let's educate. Let's create policies and procedures that kind of make sense. So let's monitor employees Coinbase accounts, let's do all the right things that they would otherwise think of as possible violations. And that way, as long as they know your heart is in the right place and your mind is in the right place, generally you're going to pass with flying colors. That would just be my advice as an advisor.

Mark Phillips:

I'll very much echo that. And I think after spending years at a broker dealer, the only way to maintain your sanity in the face of compliance is to approach it with some optimism and treat it as a positive thing that you're doing. And there are reasons why all these regulations and all these rules have to be written. And it can be an edge too. You can use it as a way to, I agree with Rich, that you don't want to scare your clients, but you also can use it as a way to demonstrate, I'm thinking about all these things. I'm thinking about how a bearer asset is different than DTCC cleared equity. And so using that as an edge I think can help advisors also.

Ryan Firth:

Yeah, I guess it just depends on your business model. Again, with my model, I'm not managing assets, so there's less of a regulatory risk, I guess, for me. But that said, I'm state registered, I still reached out to the state regulator, I reached out to legal counsel for my ADV. I reached out to my insurance carrier to make sure that what I'm doing is okay with them. And so yeah, just reaching out and trying to understand what's their position and how do they perceive what your activities, are you in compliance or not.

Matt Kress:

Yeah, that makes a lot of sense. And that's something that I appreciate you all kind of sharing those different points, especially around the ADV. I know a lot of advisors understand that and say, that's what I need to do and work on, insurance need to do that and look at it and work on it. So just hearing that you all are sharing and having those similar kind of feelings and understanding is really good to hear.

A couple things that we've talked about and kind of glossed over a little bit, but we have about 10 minutes left and plus and minus a couple minutes if anyone has questions too. One question that comes up and came up ahead of time is just future use cases. So understanding that technology, understanding a little bit more. I always like to come back and look at and start with just how does the internet work, understanding the protocols for the internet are similar, and you could think of them in a similar way as protocols for blockchains. We don't know exactly what it's going to look like in 10 years, but it's creating that foundation. How do you all think about the future use cases and understanding just that technology under all of this?

Rich Archer:

Yeah, I love this question, because I get this from clients, and this kind of ties into my statement earlier about if you don't think this is the future of finance, you don't understand blockchain. Blockchain to me, very simplistically, is software that tracks transactions between people and it gets rid of a middleman. You just deal directly with another person or entity. So if you think of it that way, think of all the places where transactions need to be accurately and indelibly tracked. So think about selling a house, buying a car, sending money overseas. The term NFT, everyone thinks about pictures of monkeys and stuff. I think of NFTs as what if you wanted to sell 10% of your house and still live there and someone... Or what if you wanted to sell your car quickly or title searches on a house purchase are really expensive in the state of Texas. The blockchain is perfect for something like that, and we don't have to pay them $5,000 for a title search, which you can do instantly online with a blockchain.

So state of California is using a blockchain to track driver's license and license plates. I mean the use cases are unending. Once you start to see the efficiencies from it, you're like, oh my gosh, we can save so much money just by using this software in lieu of what we're doing now.

Eric Ervin:

Yeah, if you think about that statement of software is eating the world, this is the software that's going to eat the financial technology industry. A lot of the systems in the banking industry are still written on COBOL and the engineers have passed away. They're that old. So this is basically the replacement for all of that legacy infrastructure that we think works so beautifully. It doesn't. It takes two days to settle a stock trade, it's just insanity how old and archaic... Everything works, but it works enough. And so we don't really notice it.

But globally, if you think about connecting this entire system, this is the technology. This is the technology and it's already happening. Stocks are starting to trade, equities, private equity. There's a company called Securitized, which is completely tokenized all these private equity investments and made it so much more seamless. Even WisdomTree, you guys have tokenized. This is the software that's going to eat the financial services industry.

Mark Phillips:

The liquidity potential of tokenization is enormous. Whether it's that 10% of your house that you want to sell, whether it's the transferability of a private placement interest, whether it's the trading stocks overnight. I mean the amount of liquidity that will come from permanently tradable permissionless assets, permissionless to a degree maybe, that blockchain can really bring, I mean that is explosive.

Matt Kress:

Yeah, that's one thing that, and Ryan, like you talked about. That's one thing that exactly, just those use cases, if you can make something cheaper, if you can make something faster, more easily adoptable, accessible to someone who hasn't had access, and that's something that at least we really focus on here at WisdomTree as well, is looking at the whole ecosystem, the future and saying what could do to ETFs, say ETFs did to mutual funds. Our CEO, Jono, really likes to think about it that way, and Will and Jason leading the teams think about that as well.

And just understanding past that, past finance, past everything else, how does this affect insurance one days, how does it affect my medical records that are stored in all these different hospitals and all these different doctors? Can now I have that and have access and give people access to it without having to go through three different layers of admins and emails and phone calls and saving time and money. That's kind of the future that I can see that we could get to, like everyone is saying. Ryan, what were you saying too?

Ryan Firth:

Yeah, as you're speaking, it just makes me think of, it's the democratization of information and you kind of hold that information and you give permission to companies to have that information. So it's kind of taking it back and having ownership of it. And I could see that that is a use case eventually. And I think there are projects that are working on that currently. But yeah, it's a brilliant technology and I think it has a ton of use cases, so it'll be interesting to see how it all plays out over time.

Matt Kress:

I appreciate that, makes a lot of sense. And just understanding, who knows, we didn't know what a phone was going to look like when Alexander Graham Bell invented it, right? Now we have these cell phones that just can do everything and have applications on them, thanks to all the different layers of technology and evolution over time. So how does this look in the future? Who knows? But generally technology doesn't go backwards. It moves forwards and it evolves.

So I want to wrap up and do two more things. So one, I want to get one piece of advice from everyone here for people interested in learning more, taking a next step. I know we've talked about some different things. I'd love to give one last piece of advice. And then after that I want everyone to share, if someone wants to reach out to you, where could they do that? Tell us a little bit about your practice really quickly if you're interested, and tell us where to find you as well. So if you don't mind, go around and what's one piece of advice that you want to leave and have someone walk away from here with?

Rich Archer:

Yeah, it's simple. I think it echoes some of the things we've said earlier. Learn what the difference between cryptocurrencies and the blockchain is. Learn what the use cases are for blockchain. This takes 15 minutes. Just knowing that you'll know more than 90% of people, frankly. And that would be the first thing. And once you do that, you're probably going to start echoing some of the things we've said in the last few minutes. You'll have your aha moment. You're like, oh, that's what this is. It's not all this hype and garbage we're hearing in the news. And the way to find me, I'm on LinkedIn 24 hours a day, so it's just Richard Archer on LinkedIn. And we publish, my whole team, we push stuff out on LinkedIn daily. So lots of content out there.

Mark Phillips:

Cool. Well, I think I already gave away my number one piece of advice, which would be to get that software wallet. But if I had another thing to embrace about crypto is that volatility is a feature, it's not a bug. That these are wildly volatile assets. The pricing is completely uncertain, but it presents interesting opportunities for dollar cost averaging, for rebalancing. So, embrace the volatility, whether it's a contact point, whether it's financial. So take advantage of that. It's a feature, not a bug. And I blog weekly at thetill.substack.com, and my website is harvestedfinancial.com where I have a bunch of other stuff about my digital 10 index and my equity options in general.

Eric Ervin:

Great. From my perspective, start talking to clients about it. I think most of your clients probably have experienced it. And if you think about the generational transfer from the current generation to the next generation, most of those individuals that are going to inherit an awful lot of trillions of dollars in the next decade, they want to hear about this, or they want to at least know that their financial advisor knows the difference between blockchain and crypto. I think that they want to be able to talk to somebody that kind of understands this. So the earlier you get educated, the better as far as that goes.

And then as far as to reach me, LinkedIn, I'm Eric Ervin, and then Twitter, EErvin1. And Onrampinvest.com is the company name. Encourage everybody to sign up for the Onramp Academy. Feel free to ask for stuff if you're not seeing something, we're happy to provide it. So that's the best way to reach us.

Ryan Firth:

Reading the Bitcoin white paper. If you really wanted to start someplace, that would be an interesting place to start. It's not very long. It gives you kind of an insight into why Bitcoin was created. That would be a good starting point. Just kind of echoing everyone else, dabbling in it, having conversations with clients. If you're doing meetings once a year or however often, just add it to the agenda. Let's talk about crypto and what do you know about it? What do you think about it? And again, I think it leads to some great conversations with a client.

Matt Kress:

Yeah, that is a good point that we didn't bring up yet. The Bitcoin White paper, it's a short read and you can go read it in, I don't know, 15 minutes, dig into it and just understand a little bit more. So I appreciate you all being here. I appreciate everyone who's stuck around. I know there's been a lot of really good pieces of just insights and resources and sharing your expertise. So thank you all. And I can't go without saying as well, if you're interested in learning more about a couple different use cases, WisdomTreeprime.com, that's WisdomTree's wallet. We have some cool stuff going on there. It's launched, and you can go to the website and then just feel free to go to wisdomtree.com/crypto. We have different educational resources. And reach out to me on LinkedIn if you want.

So if you have any other topics that you want for the future for us to do, reach out. We're happy to bring different guests, bring different insights, different topics here. And thank you everyone. I hope everyone enjoys a great summer, great rest of the week. And thank you Mark, Rich, Ryan, Eric, thanks Cat and the team for setting this all up, and Eric and your team for helping as well. So thank you everyone.