Voyager Digital co-founder and CEO Steve Ehrlich joined Yahoo Finance Live to break down his thoughts on cryptocurrency and what he thinks the rest of 2021 will look like for the market.
ADAM SHAPIRO: We’re going to keep talking about crypto. We’re going to do that with Steve Ehrlich. He is Voyageur Digital co-founder and CEO. Voyageur is one of the platforms– it was the first to be publicly traded– but one of the platforms where you can trade crypto. And before we even dive into what we’ve witnessed just in the past couple of days with Bitcoin and other cryptocurrencies, do you have a reaction to what the Fed chair did today when he talked about not only the stablecoin, but also the risks with cryptocurrency and lack of regulation?
STEVE EHRLICH: Yeah, look, I think at first– thanks for having me today. Appreciate that. I think he’s seeing the adoption of other stablecoins like the USDC stablecoin and seeing that they are backed by banks and seeing that it is an important time for that because people are starting to use them. I’m starting to see that being used in payment systems. Our customers are holding them and earning interest when banks aren’t paying interest today.
So I think he’s seeing that opportunity, that it’s time to, actually, for the government to look at digital currencies from their own perspective and see where it brings them. And from a regulatory perspective, we’re all overseen by FinCEN anyway. And so, it’s nothing new about having more regulation when we’re already regulated by the Financial Crimes and Enforcement Network. So I’m not surprised by that.
SEANA SMITH: That’s interesting. So Steve, so the reaction, actually, that we saw earlier this afternoon, before we got the headlines coming out from the Fed, but when the main driver of today’s action, at least, were those headlines from the Treasury Department saying that they were going to scrutinize cryptocurrency a little bit harder here, potentially going forward. You don’t think that that’s a potential risk here at all?
STEVE EHRLICH: Look, we’ve expected that. In the industry, we’ve all expected that’s coming at some point. You know, we all belong to different associations. We belong to the Blockchain Association. And we’re talking to our congressmen quite a bit about that and where it’s going. And I think you’ll see thoughtful regulation when it comes to crypto. It’s here to stay. It’s not going anywhere. And we do have Know Your Customer and anti-money laundering rules that we have to abide by.
So I think it’s just a process. And that’s the adoption process, is regulation comes with adoption. And they’re seeing the adoption. They’re seeing more and more people own crypto. And they want to reg– you know, get to a point where it’s regulated. But this, again, is not a surprise to any of us who’ve been in the industry for as many years as we have.
ADAM SHAPIRO: Steve, when you talk about them seeing more and more people own crypto, you see it in real time. You sent us some data, just from– it’s a million people using your platform. And you’re seeing the demand on the platform, as you said, go off the charts. Is that sustainable?
STEVE EHRLICH: I definitely think it is, actually. I think it’s a new way for people to invest. There’s some great protocols out there that are creating some– you know, think about Ethereum in the smart contracts and other ones like Cordano and the contracts behind that. It’s going to make our lives more efficient and eliminate a lot of the middlemen over the next five years.
And I think people are starting to realize that there’s value in the blockchain protocol distributed ledger technology. They want to be part of it because we’re changing a lot of things. I always ask the question that says, you know, the financial services, the traditional equity markets, why are we trading on a T trade plus two-day settlement when we can clear crypto trades immediately? So I think crypto will change the way we do business in the future here.
SEANA SMITH: Steve, can you tell us what the action was like on your platform yesterday? I mean, we had Coinbase down for, what, just around 90 minutes, down for an hour and a half. Did you see more action than normal, just in that first couple hours of trading yesterday?
STEVE EHRLICH: Wow, what a crazy day. We saw so much volume on our platform yesterday. You know, one stat that I liked [INAUDIBLE] we had six times more deposits, cash deposits, as an onramp than we had coming off the platform. Because people wanted to invest even more on the dips yesterday. And not just Bitcoin, we saw it against Cardano, Avalanche, Ethereum, Doge, a lot more coins than you would think. And I know we get distracted, in a way, by always focusing on Bitcoin. But there are so many other projects that people are investing in. We saw tremendous– it was one of our best days ever yesterday– number of accounts, volume on the platform, deposits. It was a– what a day.
ADAM SHAPIRO: I do realize we pay a lot of attention to Bitcoin. And part of it is that it’s 50%, if not a little bit more, of the total crypto market cap, you might say. Is that going– I mean, it’s going to be a while before the others surpass it. But do you expect Bitcoin to be on a slow trajectory down? Or will it maintain its prominence?
STEVE EHRLICH: Well, interesting you bring up that stat, is that about a month ago, maybe a little bit longer Bitcoin was around 65% dominance. Actually, today, it’s only 43% dominance. So you’re seeing that decrease in the Bitcoin dominance. And that is being picked up by all the other coins. Ethereum is now up to 18% dominance. And some of the other coins that I mentioned are starting to get more and more. And we see it with what our customers are holding on the platform. It used to be really Bitcoin dominated. But we’re seeing holders go to many more coins outside that. And I actually think Bitcoin is going to drop in dominance as people start buying more and more of the other alt coins.
ADAM SHAPIRO: I’m going to make sure we bring you back. Steve Ehrlich is Voyageur Digital co-founder and CEO. Thank you for joining us today.