Benzinga, a media and data provider bridging the gap between retail and institutional investors, will be bringing back its annual Global Fintech Awards event to New York City on Dec. 8, 2022.
Ahead of this recognition of disruptive innovators in finance and technology, Benzinga will periodically publish articles on those brands that it thinks are making a measurable impact.
Today’s conversation is with Bill Barhydt, founder and CEO at Abra, a leading crypto investment and wealth management platform.
The following text was edited for clarity and concision.
Q: Bill, thanks for joining me today. You’ve got an interesting background. Previously, even before leading at Boom Financial and WebSentric, you were at Goldman Sachs Group Inc (NYSE:GS), as well as NASA and the CIA. Tell me more about you and how those experiences fed into your pivot to crypto.
A: I’m a long-time technology, as well as venture and capital markets guy whose been working with consumer and payments companies for nearly 30 years, now.
Abra, as kind of a global crypto bank, really brings these experiences together into one super-interesting company that I believe represents the future of banking.
Ultimately, I think Bitcoin (CRYPTO: BTC) is the future of money and Ethereum (CRYPTO: ETH) is the future of banking. A lot of this is going to be based upon centralized experiences that companies like Abra will be able to provide.
What’s your aim, here, with Abra? What are the problems you’re solving for?
Access.
There are a lot of exchanges and custodial providers. Saying that, however, is akin to suggesting Verisign and RSA solved the problems that created the internet.
Most people that use the internet have no idea who these companies are. Those are the picks and shovels, as are exchanges and custodians.
Now, the question becomes: “What are going to be the consumer-facing applications that are going to drive adoption?”
These are the kinds of questions we’re answering, today, and the problems we’re going to be solving in the coming future.
On the surface, there are a lot of consumer-facing crypto applications. What makes you stand out?”
If you’re in Asia, South America, or Europe, like Ukraine, you shouldn’t have to be the high-end trader type to access these markets.
This realization, among our users, has resulted in word-of-mouth growth; we’re spending almost nothing to acquire customers and that’s an advantage.
We also have a big institutional business, now, and we built a risk management system.
If you look at the drawdowns in crypto and all of the rumors of funds that are going under, or lenders who made a lot of bad loans, none of that is happening to Abra.
That’s because of this risk management platform that allows us to go from consumer deposits to institutional lending in a way that’s really become kind of the gold standard in crypto.
Tell me a bit more about that last part. What do you mean by risk management tools?
When it comes to risk management, we’re basically looking at every single counterpart in our system and saying: “Okay, what are the systemic, inherent, and transactional risks?”
So, due to this infrastructure, that’s why you have a strong reputation, right?
I wouldn’t want to trust a company like Abra if I felt that the executive team didn’t understand what’s behind crypto and what it stands for.
This space is evolving so fast and, if you want to be a sustainable business, you have to know not only what works today, but you have to know where the puck is going, so to speak.
Also, nobody wants to release new features and products too early. You may be wasting money.
So, I think we have tremendous insight, because of the retail and institutional customer base, into where the whole space is going and that’s served us really well over the last years.
Thoughts on the crypto market turmoil?
These things used to happen in university labs. It would be many years or decades later that early-stage venture financing would get involved before the public could ever invest.
Now, everyone is pushing to get their stuff out as fast as possible and everyone can see everything in real-time.
That creates disincentives to take your time to do things that may take years in the old model of angel funding, testing, product development, and beyond.
Basically, the public is the testbed for a lot of this new stuff.
How would have you approached the UST stablecoin situation differently?
You can build smart contracts that have limits.
For example, you say: “We’re not going to allow more than this many million in an Anchor contract.”
You can go slow and grow the network commensurate with proof points that it actually works well, or that you can maintain a peg at larger and larger numbers.
Any last comments before we close?
We started Abra Capital Management out of strong interest from a lot of clients to be able to invest in the products we’re doing, but in a fund form, as opposed to an account-based form.
We have five funds today, three of which actually yield similar returns to the Abra Earn product which is a trust account.
We’ve created an early-stage token fund, also, making bets of our own on some of these early illiquid tokens for higher net worth clients.
