For crypto to have its breakout moment into the mainstream, innovation needs to be turned toward UX. The many wallets, seed-phrases and platforms are a barrier, not a gateway, to onboarding the first billion users into crypto. 

Different points of entry to crypto are needed along with opportunities for inventors to discover digital assets in familiar environments. New York based investing platform Public is appealing to customers who want all their assets consolidated in one platform – stocks, bonds, ETFs, treasuries, crypto, and alternative assets. 

Cryptocurrency is a significant asset for a broad swath of investors on the platform, said Public’s Vice President of Operations and Regulatory Affairs, Prashant Yerramalli. The spot Bitcoin ETF has driven excitement and investors into the space. 

“One of the divides we’re seeing is that folks who want to take a long position on crypto or Bitcoin in particular have been buying Bitcoin directly,” Yerramalli said to me in a recent interview. “Whereas the people who want to trade the asset, speculate on the price or want to over time increase and decrease their position are finding the ETFs more attractive products.” 

Yerramalli, who previously served as chief of staff and counselor to Gary Gensler, the chairman of the Securities and Exchange Commission, said this is the start of some integration of crypto within a more traditional financial services framework. He believes legislation on stablecoins could provide the industry clarity on heavily-traded products. 

A stablecoin bill that becomes las “will be an indication of a successful effort by the crypto industry to shepherd something through and might put some wind at the back of the sails for other legislative efforts they’re working on,” he said. 

Yerramalli noted there’s been a steady stream of enforcement actions and regulatory initiatives that the crypto industry believes hinders crypto innovation, but he believes it comes from the experience regulators have had interacting with the financial markets. 

“Chair Gensler is coming from a place of what he thinks is best for the American investing public in the long run, and the hard-learned lessons from the financial crisis and crypto bankruptcies,” said Yerramalli. “He’s a guy who is actually very interested in crypto as a technology. He also sees it as a place where he views there to be a lot of non-compliance and ultimately thinks this is the right action to take.”

ConsenSys, one of the largest Ethereum developer studios, recently sued the SEC over what it said was regulatory overreach of the Ethereum ecosystem. It’s a widely shared view among U.S. companies in the crypto industry.

“Chair Gensler’s position is that most of what he sees in the crypto market falls under the current ambit of the securities laws, and consequently, you should comply,” he said. A call to the SEC for comment wasn’t immediately returned. 

“If Congress were to pass a stablecoin bill that required the SEC to do rulemaking, Gensler would do that,” Yerramalli stated. 

The crypto industry is conditioned to the pace of innovation, not the timeline of politics and professional Washington. Yerramalli stressed that things of scale take time and a roadmap will emerge with time.  

Greater transparency with investing 

Investing platforms have come under fire in recent years for the way they earn money while charging customers zero in commissions. During the Game Stop meme-stock frenzy, it came out that Robinhood was earning money through Payment for Order Flow (PFOF), where a brokerage is paid to send its customer orders to a sophisticated trading firm like Citadel Securities. Citadel wants that retail order flow because it knows that Robinhood’s customer demand is real and not an attempt by another sophisticated market participant to spoof or otherwise undercut Citadel’s position. 

Public eliminated PFOP as a practice and took a stand to not monetize customers and instead chose to implement an optional tipping feature. 

Brian Dixon, CEO of investment fund Off the Chain Capital, believes Public appeals to a younger demographic of retail investors who desire a dashboard that can display a diverse portfolio in one view. 

“The role of crypto in a portfolio will continue to grow over time and the Bitcoin ETF has already assisted with this,” Dixon said. “We are at the point where people need to get off 0 percent and consider a 3 – 5 percent allocation to digital assets at a minimum.” 

Blackrock’s Bitcoin ETF has attracted $17.2 billion in assets as of April 29, Dixon said. “It is believed that most of this is new capital entering the market for bitcoin exposure,” he said.  

Brokerages provide a lower barrier to entry to explore cryptocurrency, serving as easy on-ramps to acquire digital assets before moving into the exchanges. 

“Crypto is something we offer because our customers want it and they view having exposure to Bitcoin or Ethereum as valuable in constructing their portfolio,” Yerramalli concluded.