Robinhood's CEO on the Plan to Tokenize Everything

SPEAKER_2 (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

Joe Weisenthal (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:23)

And I'm Tracy Alloway.

Joe Weisenthal (0:25)

Tracy, here's something that has surprised me.

Tracy Alloway (0:26)

Okay.

Joe Weisenthal (0:27)

So it's 2025

Tracy Alloway (0:29)

I would have thought, you know, Are you surprised it's 2025?

Joe Weisenthal (0:32)

I'm surprised we made it this long. I'm surprised it's 2025

Tracy Alloway (0:35)

Fair, that's fair.

Joe Weisenthal (0:36)

I'm surprised, you know, and I think back to 2021, and like the crypto boom of that era, and the stock, the SPAC mania, and all that stuff, that craziness. Like, I sort of thought to some extent that would have been a little bit more flash in the pan, because, you know, like 99, 2000, a couple years later, like people were not talking about.com stocks, like two years later. And because I'm, like, I thought it was going to be a repeat of that. All of this retail obsession with options, and call options, and speculation, et cetera. I thought that would be a thing, you know, short phenomenon. A bunch of people lose their money in 2022 and 2023, when some of that stuff busts, and then they lose interest, and they go on to other things, and sort of forget about trading for a while. But I don't think, that was an incorrect assumption on my part.

Tracy Alloway (1:24)

I think people discovered that they really enjoy losing money.

Joe Weisenthal (1:28)

It is, yes.

Tracy Alloway (1:30)

Well, okay, genuinely, what I would say is, this all started in the pandemic, right? To some extent. But I think crypto opened the door to this idea that you can have a number on a screen and just bet whether it's going to go up or down. Like basically a synthetic number almost, right? It's just this token. And then what happened during the pandemic is everyone was really bored. Game stop became a thing. Everyone kind of discovered that momentum was maybe more fun to play than boring stuff like value. And I was, you know, it did honestly feel like a cultural shift when it came to the way people were thinking about trading. And I'm not, I guess I'm not as surprised that it's continued to this day. And if anything, the sort of tokenization of the stock market, people playing options, people playing crypto has become bigger than ever.

Joe Weisenthal (2:23)

It's just this cultural shift. It's also like everything has a price now, which I think is very important. Today, like we're constantly looking at prices for politics right now. We're constantly looking for prices related to geopolitical events on sites like the Kelshe or Polymarket, etc. It has expanded so much, so there's crypto, there's options trading, etc. We're drenched in a culture of there's a price on something, there's a thing that's going on, you can trade it. I now think it's going to be with us forever because it clearly was not just a one-year sort of Zerp era, everyone bored at home phenomenon.

Tracy Alloway (3:01)

Well, it's not just that you could trade it, you can trade it really easily. You can just open up your phone, some things you can trade 24 hours a day and just make or lose money as you choose.

Joe Weisenthal (3:12)

I love making or losing money as I choose. Anyway, one of the companies that we really associate with this boom in retail participation that era, and that of course is Robinhood, the company that was famous for being the first to introduce free stock trading, just kind of mind-blowing and lots of people use it. For many people, it was their introduction to trading options and stocks, particularly during the pandemic associated with the meme stock era, which kind of still exists. Anyway, we have the perfect guest. Go on, what were you going to say?

Tracy Alloway (3:44)

I was going to say, Robinhood, in my mind, definitely caught the wave of this cultural shift at exactly the right time, but it's also in my mind, an ode to the importance of user interface.

Joe Weisenthal (3:56)

Yes.

Tracy Alloway (3:56)

Like genuinely, the app is just more interesting, more fun, I guess some people would say, more easy to use than a lot of other things. This sounds like an ad, I don't mean it to be, but I remember, for instance, when you used to make trades on Robinhood, and you would get a little confetti animation every time you did it. Can you imagine TD Ameritrade or Schwab or something doing something like that?