Name: Balancing The Ledger: Voyager Brings No-Fee Equities-Style Brokerage to Crypto
Uploaded: 2018-07-27
Duration: 8 min 51 s
Description: Voyager CEO Stephen Ehrlich, an E*Trade alumn, cofounded Voyager with Oscar Salazar, cofounder of Uber.

[ MUSIC ] Welcome to Balancing the Ledger where tech and finance intersect. I'm Jen [ UNKNOWN ]. and I'm Robert Hackett. And today we're joined by Stephen Ehrlich, the CEO of Voyager, a new commission- free brokerage that we'll talk about in a few minutes. Thank you so much for being here Stephen. Thank you for having me. I'm really excited to be here. So let's start with some news. Google has announced a new partnership with Digital Asset where they're going to be integrating blockchain technology into Google Cloud Services. What do you think they opportunity is for them here? Don't know exactly what their strategy is, but I do believe that by entering that space it lends more credibility to the space. And I think more and more people have interest and therefore drive more interest in cryptocurrency as well. It's very clear that somebody's cloud providers are banking on blockchains to get the more customers, Microsoft, Oracle, Amazon they both come out sort of blockchain offerings. There has also been a big rally this week in the cryptocurrency market with the bitcoin price above 8, 000 as the highest of its been for the first time in months You've entered the cryptocurrency space. Tell us a little bit about Voyager and what you're doing. We're really excited by this opportunity. We came together, the group of founders, about a year ago, and saw an opportunity to deliver to customers a user experience that has a bunch of news, research, information in addition to the ability of executing 15 cryptocurrencies. But at the same time, it's not just the user experience. Is what we're building on the backyard which is the best execution capability for customers who are connected to a ten exchanges and three recorded provider not changing everyday increasing. So we can actually go to the market find the customer the best execution possible on each trade we define that execution as Price, speed, liquidity and reliability and therefore we can give the customer something that they're accustomed to see in their traditional trading world, We're excited by that. We think it's a great opportunity for customers to access the markets across the globe without opening an account with every different exchange. They can open one with us And access the global markets. Explain a little bit how you are going to make off this when there's no fees. Yeah, we are a no- fee provider. We think that's really important. We're trying to bring value to the customers. But because of our algorithm that we've built across multiple exchanges, and we're always adding exchanges every single day, And the liquidity providers. We think that we could find the customer the best execution, beating the average of the prices at that point in time and making a small spread on that order every single time. Our algorithm, we've spending a lot of time building it and across the multiple exchanges give us Just that opportunity. Do you see a lot of price variation across these opportunities? I know you connect both to those in the US and abroad. We do, we absolutely do. We see in comparison to the equity markets where there's a National Best Bid and Offer or NBBO. There is nothing in the cryptomarket about this. So we see a cross market 100 % of the time in the crypto market. So that allows us to go find The best price at speed, liquidity, reliability across the exchanges. And therefore bring that value back to the customers. We're seeing that cross- market 100 % of the times. Equity market it almost never happens. Explain a little bit about what cross- market means. Yeah. A cross- market means that the prices that are posted on the exchanges, usually in an equity market you buy at one price. Let's say the price Variance from Microsoft and I'm not using any indicative price, but it's $ 50 and $ 50. 01, so there's always a little spread. In the crypto market those prices could be all over the place. You might be able to buy it on one exchange at $ 100 and sell it at another at $ 101, so it's always different, the prices are never the same. Every market has different prices and different spreads on their market which means that they are crossed. Yeah. And this also means that you'll be able to offer any of the Crypto Currencies that are offered by those exchanges that you connect to? Yeah. We're in position to tell launch with 15 currencies. We'll look to expand that rather rapidly. Our requirements for taking on the coin Regulatory execution and security. Those are the three major components we look at as to whether or not we could actually have a coin on our app, and therefore trade on one of the existing markets. You're not just working with retail customers, but also, some of these Wall Street institutions. What is the demand there? What are you planning to offer? We think it's a tremendous opportunity on the institutional side, because we've heard from customers that Are from potential institutional customers that they need somebody to help them navigate these waters. And what do I mean by that? That they need somebody to help them get the custodians in place, banking in place, any of those components that they traditional have used through a prime broker. We're developing an open architecture system for institutions connected to multiple custodians Multiple banks and obviously the multiple execution venues, so therefore we're bringing a value proposition not only to retail but to the institutional customer, so they can access the markets. And again, that's a way they're used to accessing the equities and options in futures markets. How about your co- founders? How did you meet one of the Uber co- founders, who's the Chief Technology Officer there, he's one of your co- founders here. How did you guys all get together and create this new idea? We came together about 9 months ago, maybe a year ago. Oscar Salazar who is our technology advisor, not per sa our CTO, but our advisor. Oscar, Gasparci de Dreuzy who runs a few companies, and Phillip Etan, the four of us got together We have a common friend, and we got together through that common friend. Then, we started looking at opportunities in the cryptospace, and the first thing we notice was on the user interface and what we could deliver to the customer as a value proposition to the customer, then on the execution. But we kind of met through a mutual friend, then we decided this was major opportunity to bring value back to the customers. Tell us about your own background, I mean you're working at E * Trade in a bunch of brokerage firms, how does that compare to what you're seeing right now in the [ UNKNOWN ] Markets? My background is I spent many years at E * Trade, built my own broker deal called Light Speed, you know that capital market, that's the knowledge that we have and the entire team has spent a lot of time in financial service and financial technology That background has allowed us to figure out how to use the markets and send the executions and fill the algorithm to effectively manage the system. I've been in the brokerage world for almost 20 years and I think that experience on customer experience, service, which I think is a very important component of this. Coupled with the execution is very, very important to. And my background in that has helped bring a great app to the market. And you mentioned this a little bit earlier, but you have no interest in creating an exchange? You really wanna maintain that brokerage position, is that right? Can you explain a little bit more about that? Cuz of some of the competitors out there, like Claimbase, you know they have an exchange. Circle has bought an exchange. and they also deal as sort of brokers. We are strickly going to be a broker that's our mind set that we want to bring value to the customers and we think by doing that, we emulate the equities markets by what we're doing. The equities and options markets and we think the exchange is a nice model but we think by bringing the brokerage model to the cripto markets, we're bringing that value again to the customers. To us it's all about How do we bring a value proposition to the customers? And by finding in [ UNKNOWN ] coupled with service, we think that's a great value proposition for the customers. Do you have any price predictions for Bitcoin or outlook in the market in general? Up, that's what we want. We're obviously bullish. In the crypto space. That's why we entered the business. We think there's opportunity. We want to get more customers used to this asset and get them comfortable with trading this asset, and I think the more people we get comfortable and educate them, there's just tremendous upside in a lot of the cryptocurrencies. I've got to ask, I love the name Voyager, it's got a very Star Trek vibe to it. [ LAUGH ] Where did that come from, what's its significance? You know, it was just something that we were bouncing names around and then one of my cofounders, Gaspard, I was on a plane to Minnesota and he texted me. Obviously I had the Wifi on the plane and he texted me what do you think of Voyager and it just hit. It's just something that stuck between our whole founding team. We love the name. It's who we are. It's our personality. It's, we're exploring this whole new asset class. And we want to bring everybody along with the ride with us and have them join, be voyagers, because I think we're seeing something that's transforming You know, the investing world, and we want people to join us for that ride because we're going to give you the best product we can to help you navigate those waters or navigate the moon. Thank you so much for being here. I think that's all we have time for today, but I really appreciate it. Thank you very much. I appreciate it. I'm Jen Wieczner. And I'm Robert Hackett. Come to fortune. com for more Balancing The Ledger. See you next time. [ MUSIC ]

Voyager CEO Stephen Ehrlich, an E*Trade alumn, cofounded Voyager with Oscar Salazar, cofounder of Uber.

Balancing The Ledger: Voyager Brings No-Fee Equities-Style Brokerage to Crypto

Finance

Voyager CEO Stephen Ehrlich, an E*Trade alumn, guests on this week's episode.