Swan's Cory Klippsten: our goal is zero bitcoin held in custody

Ashton Addison: What is Swan Bitcoin, and what is the main focus of the business?▶ 00:21

Cory Klippsten: Our goal is to be your bitcoin wingman and serve all your bitcoin needs. That starts with buying bitcoin as easily and seamlessly as possible, with super low fees. You can make one-time small or large buys, or set up automatic recurring purchase plans, which is dollar-cost averaging, or DCA. We're also expanding into other areas. We have a private client services division and an advisor services team that handle more complicated situations for businesses, trusts and IRA rollovers, and the different ways people want to buy through entities. We also have a very large international business, serving places where there's no good local exchange or broker and we're the best option. We're launching the Swan app with a self-custodial Lightning wallet built in, and a non-KYC interface in the same app. The overarching goal behind everything we do is to be the most trusted name in bitcoin.

Ashton: There are plenty of places to buy bitcoin now. How does Swan differentiate itself?▶ 02:25

Cory: Being bitcoin-only is a big part of it. We get a ton of referrals from crypto fund managers, which seems counterintuitive. But they know how the sausage is made, and they understand the information asymmetry you need to win in non-bitcoin crypto. When it comes to their friends and family, they send them to Swan because they know we'll keep them on the straight and narrow and buy the one asset in the space that is doing exactly what it's supposed to do and has since inception. It has the left end of the possible distribution completely chopped off. It's hard to imagine a scenario in which bitcoin isn't worth a lot more in purchasing power in the future.

Ashton: Are you seeing growth in both institutional and retail customers?▶ 03:51

Cory: People have very fuzzy definitions of institutional. What we'd call institutional, meaning banks and funds, where the decision maker is an agent for other people's money, is not our target at all. Swan focuses on the principal, the person buying for themselves or someone much closer to the buyer. That means family offices and small and medium-sized businesses, and we're the only company giving them the white-glove service you'd expect from Goldman Sachs or Morgan Stanley private client services. On the retail side, it's about a beautiful product, low fees, transparency, education and community. We invest more in education and content than any company in the bitcoin space, probably by an order of magnitude, and a lot of the top authors and podcasters are on staff. When people go past putting one or two percent of their portfolio into crypto and start to understand bitcoin, the conversation gets much deeper. They need to trust they're getting good advice and not BS. That gives them the confidence to put ten, twenty, fifty or even eighty percent of their net worth into bitcoin. Crypto traders don't have conviction about what they buy, which is why they trade instead of hold. As people gain conviction about bitcoin they buy a lot more, and if you're the partner who helps them on that path, it can be very profitable.

Ashton: Which generations are key to the next phase of adoption, younger buyers or older ones?▶ 11:24

Cory: It's a bit of both. You want the number of people to go up, and you want value to move into the bitcoin protocol and be stored there. That wealth is concentrated with the older generations, boomers and upper Gen X. But the number of people matters too, and millennials and Gen Z's smaller stacks can add up to a lot. These generations also have parents and kids. A zoomer might fall in love with Swan and tell their rich auntie, and then she's buying millions of dollars from us. And in the U.S., boomers are set to hand off 30 trillion dollars of inheritance to millennials over the next decade. Right now that's in non-yield-bearing bonds, commercial real estate with no tenants, gold bars and so on. The propensity for the newly rich trust-fund millennial to put more of that into bitcoin is very high.

Ashton: Swan's team runs a daily Twitter Spaces show. How big is it?▶ 07:16

Cory: It's called Cafe Bitcoin, and it's the main daily discussion about bitcoin in social audio, on both Clubhouse and Twitter. Most days it's over a thousand people concurrent, and four or five thousand will dial in during the space. Then it becomes a podcast and gets a few thousand more listens. It's a good place to get your morning fill of bitcoin, catch up on the news and learn some amazing stuff.

Ashton: Where should someone go to learn more, especially if they're new to bitcoin?▶ 14:17

Cory: Follow us on Twitter at Swan Bitcoin. If you've been messing around with crypto for a while but have never gone down the rabbit hole, the best book I've found is Inventing Bitcoin. It's about a two-and-a-half-hour investment to read or listen to. It's recommended over and over, especially by people who travel the world and bring paperbacks with them. We give it away for free now, so you can grab an e-book or audiobook at swanbitcoin.com/freebook and give it to whoever you want. Spread the love and orange-pill the world.

Ashton: The Swan card isn't for spending bitcoin, is it? You spend fiat and earn bitcoin rewards?▶ 08:23

Cory: Right, it's a sats-back credit card. Hopefully you have fiat inflows to pay off the bill however you want. Bitcoiners tend to hold their nose and use BlockFi, even though they don't like the company, so it makes sense for a bitcoin company to offer this instead. BlockFi, Gemini, SoFi and Venmo are among six or seven sats-back rewards cards out there right now, and not one comes from a bitcoin company. The message is coming from the wrong group of people, so we're excited to launch ours.

Ashton: Governments are freezing accounts tied to bitcoin on exchanges. How does Swan approach self-custody?▶ 08:47

Cory: We've always been set up for people to take self-custody, and we educate about it constantly. Our KPI for custody is zero bitcoin under custody. About 70 percent of people take their coins off the platform. Custody with us is free and withdrawals are free, either automatic or manual. We're not trying to hold on to people's coins. We don't want them. We also built an xpub tool, the first of its kind. An xpub can create a thousand or more addresses tied to the same wallet, and nobody had figured out how to use one trustlessly. Normally if you give an exchange your xpub, it also knows all your addresses. Last year we figured out a way for you to enter the xpub into a tool that trustlessly and provably extracts the first thousand addresses and sends them to us for withdrawals, without us ever seeing the xpub. We're always looking to push the envelope on privacy and help people use bitcoin the right way.