August 6, 2021 – On today’s podcast, we welcome special guest Adam O’Brien, Founder and CEO of Bitcoin Well. Bitcoin Well offers convenient, secure and reliable ways to buy and sell bitcoin through a trusted Bitcoin ATM network and suite of web-based transaction services. It trades on the TSX-Venture exchange under the symbol BTCW.
On the podcast, Adam discusses:
- What initially got him into bitcoin and why he founded a startup focused on it
- His thoughts on the state of the cryptocurrency market
- Bitcoin Well’s business model
- The company’s recent going-public transaction and its consolidation strategy
- And more
Welcome investors to the Absolute Return Podcast. Your source for stock market analysis, global macro musings and hedge fund investment strategies. Your hosts Julian Klymochko and Michael Kesslering aim to bring you the knowledge and analysis you need to become a more intelligent and wealthier investor. This episode is brought to you by Accelerate Financial Technologies. Accelerate, because performance matters. Find out more at www.Accelerateshares.Com.
Julian Klymochko: We are here with Adam going to talk about Bitcoin and Bitcoin Well, one of the newest, publicly traded Bitcoin companies out there. He is fresh from the Miami conference. The Miami Bitcoin conference, which was one of the big ones ever since the world is getting back to normal here. So, Adam, welcome to the show. People involved in Bitcoin, I’m always super intrigued and wanting to hear the origin story, you know, how you first heard of Bitcoin and what initially got you hook, specifically, you know, what was the moment where you caught that Bitcoin bug?
Adam O’Brien: Yeah, no, definitely. Thanks much for having me. I think it’s funny, that like Bitcoin bug was definitely renewed in Miami. Being a part of that conference was just like, you know, there have been other Bitcoin conferences obviously, but I definitely think that that was one of the first times where so many of like the Bitcoin OGs were all in the same space and all the Bitcoin OGs have like made some money and are doing life and that’s like all good, but the mission behind Bitcoin is just so much clearer.
Julian Klymochko: And what’s a Bitcoin OG? Would that be like 2013 vintage? Like where is that line in the sand?
Adam O’Brien: Yeah, probably like 2013 vintage.
Julian Klymochko: Okay.
Adam O’Brien: Like, you know, I mean not to put like values on things, but like probably like a whole coiner, so to speak. Someone that owns a full Bitcoin but someone that’s like, I think someone that’s just been in the industry or has known about the industry for quite some time. And isn’t like, isn’t surprised, I guess is kind of how I best. Like no one at the conference was like, wow, can you believe $40,000, you know, Bitcoin? It was all just like, yup, this is where we are. This is the part of the journey that we’re on now. And this was like super expected and like, no one’s selling, no one really cares about the price. Where like, talking about like the fundamentals of like the technology, how like the monetary principles of Bitcoin and like what the blockchain means to like, you know, I mean everyone, but like specifically under underbanked countries. I mean obviously like the El Salvador announcement was like massive at the conference and that maybe, you know, time the emotion in, but yeah, I would say like 2013 vintage is like pretty OG, which is funny, cause like in five years probably 2020 will be seen as an OG. My origin story, like, it’s funny, I don’t remember where I was, what I read that got me involved in Bitcoin, but it had just peaked a hundred dollars at the time. And I was like, wow, like this fake internet money is worth a hundred bucks. I got to figure out how I can buy some of that.
Julian Klymochko: Right.
Adam O’Brien: It just seems reasonable. And then I was like diving into what Bitcoin was and how it worked. And I’m not like a computer programmer by any stretch. But I like had to learn a lot of code and command line and you know, the early Bitcoin. Bitcoin OG is described by anyone that struggled through early Bitcoin technologies, like the early Bitcoin wallets, the first iteration of the blockchain app was just like brutal before blockchain was a media company. And it was a wallet app, you know, I remember when like, in my origin story, like kind of found Bitcoin struggled through all that. Went to go buy Bitcoin and my options were meet a guy in a back alley or wire money to Russia. And I was like damn, this is pretty sketchy. So, you know, ended up meeting a guy in a back alley, had an experience that you would expect from meeting a guy in a back alley to buy digital tokens and kind of just thought, you know, there must be a better way. And so, I dedicated myself to like being the guy that met people in Starbucks instead of sketchy back alley and educating them about Bitcoin and selling the Bitcoin and then kind of just building up those processes and that clientele.
And then, you know, we got into the Bitcoin ATM’s and I was like, wow, you know, a robot could just sit in one location and sell Bitcoin. I don’t have to drive all over the city and meet everyone, that sounds amazing. And then, you know, it was one Bitcoin ATM and two Bitcoin ATM’s and then fifteen and then fifty and then a hundred. And obviously with like lots of little steps in between, but definitely was like this organic, natural falling in love with Bitcoin that I was then able to like, luckily build a business around, which was super cool.
Julian Klymochko: So, seven, eight years ago you had the vision that Bitcoin would ultimately grow to this massive ecosystem and see significant adoption.
Adam O’Brien: Yeah, I think so. It’s funny, like if you would ask me in 2013, if I thought you know, Bitcoin would ever be worth $10,000. I don’t know what I would’ve said.
Julian Klymochko: You would say I’m going to buy a lot more.
Adam O’Brien: Yeah, well probably, but like when Bitcoin hit 10 grand, I was not surprised by any stretch of imagination because but again, like price, price focus is like such a secondary aspect for me. I’m so much more focused on like the fundamentals of the monetary policy behind Bitcoin. The way Bitcoin solves the problem of the underbanked face right now, you know, aren’t really that relevant in Western culture. But like, you look at Greece, like a few years ago. And like there’s the turmoil that the Government manipulation and Fiat currency manipulation caused in like Greece, which is like, you think about Greece.
And like everyone knows Greece is not rich, but like it’s a nice place to vacation. It’s like relatively safe. And, you don’t think about like the monetary corruption happening in, you know, Canadian and Americans, one of their favorite holiday destinations. And you look at like, you look at Zimbabwe and it’s like, you know, on another level, people throwing around a billion dollars or, I can’t remember what the currency was called in Zimbabwe. But like just the way that you see how Bitcoin fixes that is truly remarkable. So yeah, definitely the market is reacting, I think, appropriately to something that changes the world so drastically.
Julian Klymochko: I wanted to touch on the state of the Bitcoin market specifically and cryptocurrencies, crypto assets in general, because we’ve just seen a massive amount of technological advances with respect to blockchain technology. And what’s going on with respect to crypto assets. Obviously, Bitcoin is still the big dog but you’re hearing conversations of Ethereum and for some reason, Dogecoin has gone relatively crazy, which is just insane to think about, and then everything happening in defy and all these new protocols and some of the things happening in the blockchain space. It’s so advanced that it’s really tough to keep up on. So, I was wondering from your perspective, you talk about, you know, the fundamental developments and what Bitcoin and crypto means. I was wondering your thoughts on Bitcoin specifically and how it relates to crypto assets in general?
Adam O’Brien: Yeah, great question. My outlook on Bitcoin is very different than my outlook on crypto assets and cryptocurrency as kind of a marketplace, I think that there’s certainly a Goldilocks window for people to make money in like crypto assets in general. But I liken that to like a casino almost. I think that there’s a lot of projects out there that are founded without any core fundamental value props. And they’re literally created just as a way to make money which is like totally fine. Like people want to make money. Everyone wants to make money, that’s like great. But where the problem is, is that I think that people trust crypto assets because of how trustworthy Bitcoin is.
Julian Klymochko: Right.
Adam O’Brien: But crypto assets aren’t worthy of being trusted that way. They don’t have the same fundamental principles as Bitcoin. They’re not truly decentralized. Lots of times the code are outright plagiarized from other projects.
Julian Klymochko: Seen that a lot.
Adam O’Brien: Seen it a ton. And so, it’s a problem where, you know, the trust that Bitcoin built which is like very, very valid because Bitcoin itself is decentralized. The code is like super sound. The encryption levels are out of this world, the blockchain itself is remarkable. The way the nodes interact with the miners, interact with the blockchain is unparalleled and unprecedented. And so that trust, well, I mean, we don’t have to trust it. That’s the best thing, we can verify it. But the way that that trust was built from Bitcoin is kind of built bleeding into the crypto industry. And people are getting ruined because they’re misplacing that trust. It’s like if you bought a, you know, what’s the safest car in the world? I don’t know.
Julian Klymochko: Volvo
Adam O’Brien: You buy a Volvo, and you’re like, this is the safest car in the world. And then you went and jumped in a Kleenex box and drove down the highway and crashed. And you were like, why the heck isn’t my car working? It’s like, no, no, no, the Volvo is safe. Your Kleenex box that you’re driving in is not that safe. And just because they’re both called cars doesn’t mean they offer the same safety and fundamental values that you were looking for.
Julian Klymochko: Right, yeah.
Michael Kesslering: Do you see yourself as a bit of a gatekeeper in the space that you’re in, as I’m sure you do have many projects that are coming to you constantly, perhaps wanting to airdrop their coins to gain access to your platform? Is that kind of some of the role that you see Bitcoin while playing?
Adam O’Brien: Yeah, I think a little bit, I think that our policies and our fundamentals are creating a financially sovereign society. And I think that we have a role to play in educating what that means. And it doesn’t mean selling Dogecoin. Just like Whole Foods, doesn’t sell coffee, crisp chocolate bars because that’s not their business model, right? They can make a lot more money, impulse selling chocolate bars that are full of garbage and Swedish fashion and all the sweets that you could imagine. But that’s not their brand, not their model. We’re like, you know, where like the organic food store of cryptocurrency of Bitcoin. We sell sound money and we educate customers on how to be financially sovereign and how to maintain financial sovereignty. And so, yeah, I think gatekeeper probably is an appropriate term. But I definitely think that, you know, we have the long-term in play where like selling somebody for lack of a better term, a shit coin only to have them get wrecked in like six weeks is not going to build trust with anyone.
And we want to take the position of, you know, the best way that it sums up. I got a text from someone in late 2018 and the text was very simple. It just said, you were right. BTC is king, if I had put my money in Bitcoin, like you suggested I would be a multi-millionaire. Today I’m stuck holding the bag of all of these Altcoins. Because I got stuck on, you know, trying to make a quick buck and that just summarizes so well, what we’re trying to prevent and what we’re trying to do, which is encourage people to like, look at what you’re buying. Why are you buying it? Are you buying Dogecoin because you want to sell it to somebody else, some other sucker later on? Like when you go to the casino, you’re happy when you win, because the house lost. You successfully trick the house into giving you, their money. And that’s what you’re hoping when you’re like, you know, investing in these like garbage tokens that have no fundamental value. And so yeah, I definitely think gatekeepers and appropriate term.
Julian Klymochko: And not just, you know, garbage, some of these are outright scams where they’re looking to steal money at the worst end of things. So, speaking of long-term, I was wondering what your thoughts as a long-term participant in the Bitcoin and crypto markets, what are your thoughts on where everything is heading? Like where are things going to settle, say 10 plus years out with respect to Bitcoin and crypto assets?
Adam O’Brien: Yeah, great question. I am really, really excited to see what Bitcoin does to like Governments and authoritarian regime, because I think that it’s like by default creating this competition within Governments and because Bitcoin is so movable, so easy to move, so easy to self-custody. We have this scenario where if a government taxes or regulates it too heavily, will be a massive amount of wealth, we’ll just move.
Julian Klymochko: Yeah, exactly.
Adam O’Brien: They’ll just leave, and like El Salvador taking it as currency, every single Bitcoin current holder now currently owns legal tender in El Salvador, which is phenomenal. And like before that was true of the U.S. dollar, but it wasn’t true, you couldn’t spend it in the same way. There had to be intermediaries in the middle in order to spend the USD in El Salvador. But, you know, we see that happening. We see El Salvador moving towards like adding Bitcoin to their balance sheet. We have other governments now looking, oh crap, you know, should we be doing that? Are we behind the eight ball in doing that? And we’re going to start seeing small countries making big plays surrounding Bitcoin to make their countries sovereign. And I think that’s an incredible thing for the world. I mean, competition is a benefit to the customer or the client or the citizen in this case. So, I’m very, very excited to see where Bitcoin forces governments to move and to work towards in creating again like financial sovereignty.
Julian Klymochko: Yeah, my thesis is that same 20 to 30 years. Obviously, the millennial generation has a much more favorable view of Bitcoin as a store of value. And if you look at most central banks throughout the world or take the U.S. government, for example, Fort Knox literally holds hundreds of billions of dollars in gold reserves. And I think if you take a poll of millennials who will be running central banks in 20 to 30 years, they prefer Bitcoin to gold in terms of a store of value or perhaps both. So, I see central banks worldwide adopting Bitcoin within their policies over the next two or three decades, which is one of the reasons I’m long-term bullish, but enough about the market. Let’s get into Bitcoin Wells business model. I was wondering, you know, you guys recently put out Q1 results. Can you tell our listeners how Bitcoin Well operates, how it generates profitable growth?
Adam O’Brien: Yeah, definitely. So, from the start, our mission has been making Bitcoin accessible and understood. And so, the way you make Bitcoin accessible is, you sell it in as many places as possible. As many people as many options and the opportunity to buy Bitcoin. And so, the business model is quite simple. We buy Bitcoin for X, we charge a fee or we markup X and anywhere from, you know, 3 to 18%, depending on the platform and the medium in which you’re buying that Bitcoin. And then we sell direct to consumer in a non-custodial way, which creates the fastest and safest way to buy Bitcoin. So, notice, I didn’t say cheapest, but the fastest and safest way. And so, we’re definitely serving a niche of the market and right now developing ways to serve more of the market to become, you know, to compete a bit better on the pricing. But I think that ultimately security and speed of accessing Bitcoin is the most important thing in a volatile market that is Bitcoin and cryptocurrency,
Julian Klymochko: Now, a couple of notions. You mentioned the topic of security and safety. Now, one thing that Bitcoin Well is big on is the custody aspect. So, we look at many competing business models where they be exchanges. And we’ve seen a number of outright disasters on the exchange side, whether it’s Mt. Gox and some of the other exchanges that have been hacked and lost a ton of their customers Bitcoins. I wanted you to talk about what your thoughts on custody and specifically why you think it’s bad for our customers if they’re not holding their own coins?
Adam O’Brien: Yeah, I’m like personally, I feel probably, actually the most convicted to tell the world that they don’t need to send their Bitcoin anywhere else. They should be holding Bitcoin themselves. And Bitcoin allows you to do that, unlike any other financial asset in the world. Custody, we have been quite comfortable giving away the custody of our finances because it made things more convenient. If you had a bunch of goals, like you’re not going to carry around bricks of gold in a backpack to go sell it.
Julian Klymochko: Oh, you never know.
Adam O’Brien: And what are you going to do? Are you going store your gold like under your pillow? Like, bricks of gold are just hard to store. Same with silver coins and same with, you know, high value paintings. Like we’re just very used to giving away financial assets because of the convenience factor, but Bitcoin goes away with all that because it becomes very, very easy and very simple and very secure to hold the Bitcoin yourself.
And so, when you look at like a graph and you have accessibility on one side, and then you have security on the other side, the closer you get to accessibility, the further away from security you get, and the further towards security you get, the further away from accessibility that you get. You think about, like you lock your doors at night. Well, if you put a key on the front step in plain sight, that lock does absolutely nothing, but that’s also the most accessible way for you to get into your house, you’ll never lose your keys again. If you had a million keys scattered around the entire city, you would never ever be without a key, you would always have access to your house. It would just be horribly insecure. And so, when you’re thinking about, should I hold this myself, or should I give this to someone else?
I think that people in society, we have to get out of the mindset of, ah, hands up. I can’t do it myself. And we have to get into the mindset of what am I risking here? What do I care if someone else has my coins? What am I trusting them to do that I don’t trust myself to do? And often the answer is not much. Holding Bitcoin, like learning how to get set up and hold Bitcoin. And like a hardware wallet is like 15 minutes, you know, by way of like video tutorial or, you know, if you want to really do it, like not to shamelessly promote, but like you talk to someone at Bitcoin Well, and like, we set you up with a wallet in a non-custodial fashion that is yours and that you control and that your self-custody, there’s just no excuse for wanting to give your money to someone else. Especially when the risks involve like seizure from governments. How about just, you know, a honeypot scenario where, you know, if I know that custodians are billions of dollars’ worth of Bitcoin, I’m going to try and attack those honeypots. And if that money disappears, I don’t care who insures it. I don’t care what company is behind it. Insurance companies don’t make money by paying out claims, and so when there’s massive claims that are coming up for insurance companies, there’s going to be long drawn-out legal battles. And whether you like it or not, the money’s going to be gone. And so, the risk is just so significant to having a custody hold your Bitcoin that it just baffles my mind that we, as a society even consider that.
Michael Kesslering: Yeah, and I mean, in terms of owning your own keys and protecting them, that’s an important part of the educational aspect of owning Bitcoin that I think it does a lot of good to understand that process. It makes you understand fundamentally how the blockchain works and how Bitcoin in and of itself works. And it just really, as you had mentioned before, really understanding what you’re owning, I think it’s important in any situation and especially in cryptocurrencies, but moving back to Bitcoin Well. You have a lot of exciting growth opportunities moving forward in this ever-growing space. What are some of the organic growth verticals that are really exciting to you today within Bitcoin Well?
Adam O’Brien: Yeah, I think it’s creating that ecosystem of products. So, like we have the ability to, you know, we have this on-ramp in the Bitcoin ATM’s and we have this off ramp in like our bill payment services. But what we kind of want is creating that middle-ground ecosystem were giving the customer or giving our client the ability to interact with their Bitcoin in the same way that they interact with their money today, like with in a non-custodial fashion. So, like in a perfect world, the entire world would have all of the same convenience that we currently have with our existing monetary system. Like you pick up your phone, you hold like, you know, it’s like, there’s the Scotia Bank app. You open it, you like send money, you pay your bills, you like savings, then open a new account, whatever, it’s all super, super simple. You should have those same luxuries, but with Bitcoin and then taking it one step further, you should be able to use Bitcoin as the backend layer for virtually any global monetary remittance without even knowing you’re using Bitcoin. And once you have the on and the off ramps solve, that middle section just becomes incredibly easy. So now we’re kind of focused on building out that middle section.
Julian Klymochko: So, speaking of that growth, one key aspect of growing Bitcoin Well into a substantial player is the recent going public transaction. So, congratulations on that. I know it wasn’t easy to accomplish.
Adam O’Brien: No, not at all.
Julian Klymochko: But what some of the main goals in being a public company and does a consolidation strategy play into that?
Adam O’Brien: Yeah, big time. You know, I think that, so our business and our business model, we have a very traditional business model in a very unconventional business, which makes it ironically the most confusing thing to understand. As it sets where like a vending machine company, we buy products, we mark them up and we sell them. It’s like super, super simple. If you replace Bitcoin with chocolate bars, everyone on planet earth understands the business model, but you throw in Bitcoin. And because of all of the drama surrounding the industry, most notably because of custodians.
Julian Klymochko: Yeah.
Adam O’Brien: It just becomes incredibly complex and scary for everyone. And so going public kind of gives us the credibility that we need to play in those big markets and give investors the comfort that, hey, like we went through five rounds of due diligence with five different third parties to get this transaction done. We are the world’s first publicly traded Bitcoin ATM company. And I’ve had multiple people along the way tell me, this is the most obscene transaction they’ve ever seen, the length of time, the diligence required. I’ve just heard time and time again, how we’re getting put through the absolute ringer which was like super frustrating in the moment. But now that it’s done, it gives me great pride in knowing that our company did it. And in knowing that we can be a platform that gives investors the sound mind of, you know, this has been vetted five times over by like auditors and the TMX Group and brokers.
Julian Klymochko: Lawyers too.
Adam O’Brien: Lawyers, lawyers, and lawyers, and lawyers and accountants. And that we now have this, like this product and this company that has been vetted, you know, through so much scrutiny. And so, I think that that level of credibility is something that you literally can’t buy that, you can’t perform that. It quite literally requires a level of due diligence that is unprecedented to the public markets. And that’s kind of the main goal is to give us that credibility, to be able to go out and raise funds and give investors the confidence that we are, who we say we are, we’re doing what we’re saying, we’re doing, and we’re excited to be there.
Michael Kesslering: Now, that’s an absolutely great mindset to have for going public and specific to you, Adam, how do you think your role is going to change now moving into a public company CEO?
Adam O’Brien: Yeah, great question. It’s funny, you know, kind of having that revelation, like for the last few months of like, you know, what it means to be a public market CEO as compared to a business owner, does that the difference, right? Difference wise, I was a business owner working for myself and now I am, you know, I’m like the steward of public money and it’s my job to get the highest return on that public money as possible. And so, the mindset shifts, the pressure builds. The role becomes more important. I’m not just feeding my family here. I’m feeding hundreds, thousands, tens of thousands of families, and that excites me. I think that like specifically where my focus goes, I like did this exercise earlier last week of like arranging my time and where my time went six months ago is going to be different where my time goes in six months as my role transitions, and as the company grows too. You look at like eight years ago, I was the guy that installed the machines and the guy that, you know, put the ads on Twitter and Google and the guy that counted the cash and did the books at the end of the night.
And now I don’t do any of that stuff because we’ve hired people that are just like a lot better at doing that stuff than I am. But you know, part of the process was building the team has been filling the roles that I do so that I can kind of continue to think about and look at what does the world need. You know, we will be the most successful when I am able to travel and look at the world and look at the gaps in the existing financial system and have the ability to change that. And so that’s kind of where I need to get to, and my role is going to change a thousand times between now and then. And so, I’m excited. I’m so excited to be there.
Julian Klymochko: And the Bitcoin industry is just has massive growth potential because it’s still so new and what we’ve seen over the past year. So, a number of companies going public, whether they be exchanges, Bitcoin miners, and other. Now public entities in the ecosystem. So, from an investor’s standpoint, what separates and puts Bitcoin Well apart from some of these other competitors or crypto companies that are publicly traded in the market, or even versus just owning straight Bitcoin as an investment?
Adam O’Brien: Yeah, great question. Owning Bitcoin is obviously a phenomenal place to park cash. I think that, you know, you’ll have a hard time convincing me otherwise. Where we differ, I think is that we’re a transactions focused company. And so, we make money and you know, we’ve shown that our processes have the ability, as long as there are customers using the machines, as long as customers want to buy or sell Bitcoin, we’re going to be able to post profits and that’s kind of something that I think is unique to our business. Whereas, you know, a miner has one job and it’s getting as much Bitcoin as possible. So, if the price of Bitcoin tanks, it’s not good for miners.
Julian Klymochko: Right.
Adam O’Brien: We’ve talked about how exchanges, you know, they get distracted by the custody that they have to hold. In Canada right now, there’s a massive war with custodian exchanges and the securities commission. So, all of those exchanges are going to have to register as securities dealers, which is going to be a huge distraction from the core business of making Bitcoin as easy as possible to sell. And so, I think that we have an advantage in being non-custodial, sticking those non-custodial roots, sticking to our sound money first principles. We have no distractions there. We know exactly what has to happen. It’s a matter of just now building it out, building that ecosystem and allowing our customer to access sound money as easy as possible, and then use it as they see fit.
Julian Klymochko: Okay, great. So, Bitcoin Well trading is under symbol BTCW on the TSX Venture Exchange. And if investors want to learn more, they can go to bitcoinwell.com. So, Adam, I want to thank you for coming on the show today. Talking about being a Bitcoin OG, and the tremendous company that you built. Super excited to be involved, and I’m sure our listeners are going to enjoy your story.
Adam O’Brien: Yeah, thanks, man. I appreciate you having me. And I’m looking forward to many more conversations.
Julian Klymochko: Yeah, definitely. All right. Well, wish you the best of luck and obviously we’ll be following the story closely and participating as well. So, thank you and have a great day.
Adam O’Brien: Amazing. Thank you.
Julian Klymochko: All right. Bye everybody.
Thanks for tuning in to the Absolute Return Podcast. This episode was brought to you by Accelerate Financial Technologies. Accelerate, because performance matters. Find out more at www.AccelerateShares.com. The views expressed in this podcast to the personal views of the participants and do not reflect the views of Accelerate. No aspect of this podcast constitutes investment legal or tax advice. Opinions expressed in this podcast should not be viewed as a recommendation or solicitation of an offer to buy or sell any securities or investment strategies. The information and opinions in this podcast are based on current market conditions and may fluctuate and change in the future. No representation or warranty expressed or implied is made on behalf of Accelerate as to the accuracy or completeness of the information contained in this podcast. Accelerate does not accept any liability for any direct indirect or consequential loss or damage suffered by any person as a result relying on all or any part of this podcast and any liability is expressly disclaimed.