🎙Yoni Assia on the Rise of Active Trading in a Blockchain-Based World and Building a 27M-User App

Yoni Assia is the founder and CEO of eToro, one of the most successful crypto and stock buying apps with over 27 million users in more than 100 countries. Originally founded in 2007, it was one of the pioneering companies to incorporate crypto as early as ...

Yoni Assia is the founder and CEO of eToro, one of the most successful crypto and stock buying apps with over 27 million users in more than 100 countries. Originally founded in 2007, it was one of the pioneering companies to incorporate crypto as early as 2013. Yoni speaks about what led to being so early and where the idea for Etoro stemmed from. He also dives into the importance of the user experience in creating a mainstream crypto trading app, and how including a social aspect to the product early on helped in accelerating growth.

We talked about the next phase for eToro and the role NFTs and DeFi will play in the platform, as he looks to integrate both. Yoni is convinced finance will become increasingly digital, and believes eToro’s role is to help investors diversify their holdings. He sees a change in investment attitudes as the younger generation is interested in taking a more active role with their assets, and trading is becoming a more social experience. Finally, we talk about some of the lessons he has learned about entrepreneurship and taking big risks.

Podcast audio and video was edited by Daniel Flynn and Gary Leuci. Transcript was edited by Samuel Haig.

🎙Listen to the interview in this week’s podcast episode here:


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👀 Only paid subscribers have access to the full interview transcript below.


Cami Russo:I am so excited to have Yoni Assia here on The Defiant Podcast. Yoni, it's great to have you here, welcome!

Yoni Assia: Thank you very much, it's great to be here.

CR: Yoni Is the founder and the CEO of eToro. If you don't know it, you should. It's one of the most successful crypto and stock buying apps in the world with I think more than 13 million users in over a hundred countries. Is this the most updated number?

YA: 27 million registered users in over a hundred countries was the last.

CR: Okay, so even more than I had — 27 million, that's crazy! I'd love to get the details on how you built eToro to become what it is today. But let's start at the beginning, I'd love to also learn about your background, your story, and what led you to start eToro.

YA: Sure. So I actually started my passion for both the internet and capital markets when I was very young. I think I did my first trade when I was about 13. I'm the oldest of Generation Y, now celebrating 41 years old. But when I was a teenager, this was really the beginning of the internet and I was super excited about being able to connect with everyone around the world and these were sort of theologies that inspired me and I've always been passionate about.

When we started eToro, I started eToro together with my older brother who comes from an industrial design background, a product background. He always used to sort of make fun of me that I have an accountant fetish — they sit in front of multiple charts with spreadsheets and with newspapers around the computer. We started eToro with a vision of ‘how can we hack the user experience to bring in millions of people into capital markets?’ That's really the passion of how we started eToro, with a vision of opening the global markets for everyone to trade and invest in a simple and transparent way. This was very early on, this was the beginning of social networking, so we started adding more and more layers of social networking into the eToro platform. We started eToro 15 years ago and I was about 26, and since then, sort of everything evolved to become what it is today — the largest social investment network where people can actually both trade stocks and crypto within a social network, and they can share their performance with each other and copy the most successful investors on the platform.

CR: Very cool! Okay, so unpacking that a little bit — you started eToro as a way to get people to invest in stocks easily and this was back in one year 2007?

YA: We started eToro in 2007.

CR: Okay, and initially was it basically a place to buy stocks without the social component, like following investors and so on that it now has?

eToro’s origins

YA: We started by simplifying access to capital markets to various markets like currencies, commodities, and indices. We wanted to resimplify the experience of being able to easily open an account, easily fund an account, and easily make a trade. What we then realized [when] starting to add social features is that people also needed help figuring out what to do. So it's not only about simplifying access to the markets, it's simplifying decision making, or the help in the decision support system that people need, and we chose social features. Basically, the ability to see what other people are doing, to have the ability to talk to other people, and then eventually to be able to automatically copy people.

So when you see someone who is a successful investor, you can actually say ‘I want to copy this person with $1,000’ [and] it copies his entire portfolio into your thousand dollars, and every time you trade he trades, it trades in your account at the same time the same proportion [and] the same price. So it gradually became not only a place to easily trade, but also to easily connect with other people to learn about capital markets and to copy the most successful investors.

CR: Around when did you add this social component?

YA: We added [it] early on. The beginning of the social components was really early on, like 2008 - 2009 we added the chat feature and the profile feature. But then, in 2010, we created what we call the “open book” where you could actually see the trades of other people and see their performance. And then, in 2011, we added the ability of “copy trader,” which enables you to automatically copy other people.

CR: I see. Okay, so in 2007 you started. The first step was simplifying investment — can you also break that down a little bit? In what ways were you trying to simplify investment?

YA: So first of all… I think this still is the case for a lot of people in a lot of countries, [that] people are very much afraid of making decisions in capital markets and investing — it used to [be that way] when we started eToro… You could only fund accounts with a wire… and again that relates to later on our fascination with Blockchain… which, if you were outside the U.S., it might take you even a week or two weeks just to open an account. So really, the first initiation is ‘how do we simplify the process of onboarding’, and the second one is realizing that the user experience, the flow of how people sort of make their first trade, that's very important to gain experience. It also led us to build the demo platform, which interestingly enough is still unique today. If you think of trading platforms, we are one of the very few that actually have a simulator. So any person who opens an account gets $100,000 of virtual money [and] you can experience the platform for free without risk.

CR: So okay, so you simplify their process of funding the account. So instead of doing a wire, did you do it using another method?

YA: Yeah. People still can open an account with eToro in some places with as low as $10 [and] they can do it with a credit card or Paypal. So everything is streamlined, today you download [an] app because then there weren't apps, but you download apps, you open an account, the entire KYC and everything is automated. You can fund an account with as low as $10, and then buy a fraction of Bitcoin for $10, or a fraction of Google or Tesla for $10. So all of these bits in the process make it efficient from the moment that you potentially see an ad or read an article about an asset to where you onboard and actually open the trade. Simplifying that process was a big part and still [is] a big part of our journey on how to make it as simple as possible for a person to [go] from a non-investor to an investor.

CR: Got it. When you were doing your trades when you were 13, how were you doing this? You're from Israel, right? Were you doing this in Tel Aviv, like investing in Israeli stocks? How exactly were you doing it?

YA: So I started with Israeli stocks. Luckily my father was also a CEO and founder of a Nasdaq-listed company and he taught me a lot about the market. He was sort of my mentor in capital markets and he actually opened for me an account [with] a bank under my name. Now I have it for my kids, for my 11-year-old also the same, [although] he hasn't started trading yet. Basically, I started trading from that account, it started with Israeli stocks but moved into Nasdaq-listed stocks relatively fast. I started looking at Intel and AMD, which are still interesting stocks, and then moved also to OTC trades [and] to options. As you go through the rabbit hole of trading, you always go through the steps of plain vanilla, and then you get excited about things that are sort of higher risk and higher reward.

CR: Your experience reminds me of my brother. So my brother was always super interested in markets and trading, and he was trading stocks when he was very young as well. We’re from Chile, I think my dad also helped him as well, but I remember him being frustrated about not being able to buy Facebook from his account in Chile. So is that something that eToro also helped with?

YA: Yes, the majority of eToro's investors were outside the U.S. and it was people who wanted to trade U.S. capital markets. When… a lot of people… think about the world of crypto, they talk about this open financial system, the global aspect of crypto. But there's still a lot of innovation to be done to also open up the existing capital markets for most people still around the world today to just trade Tesla stock.

If you want to open a portfolio of Tesla, Facebook, Google, [or] Microsoft, most banks will charge you… $10 to $30 per trade, and they won't enable you to do fractional shares. So a lot of the things that in crypto are native, the global nature of crypto…, the fractional part of crypto — to be able to buy a fraction of Bitcoin or ETH — is still not the standard in a lot of places, even for U.S. stocks. Gradually, it's becoming more flattened, so platforms like eToro and others are democratizing finance, enabling more people to access capital markets as a whole. We also offer people to trade in European stocks [and] in Asian stocks. But again, this is a process because, historically, capital markets were very local for retail investors, a hyper-local market. Most people used to trade from their local banks in their local currency, local stocks, [and] local financial advisors, and I think these newer generations… just have a global mindset. That's also why we operate all around the world with customers from a hundred different countries, because we try to cater to what this generation needs [with] a global mindset, not for just a specific country.

CR: In the case of let's call it traditional capital markets, like stocks, what eToro is doing is being the intermediary so that stocks can trade a little bit more like crypto — in this global, fractional way that everyone can access. [How] does it work? EToro sets up accounts in a global market so that it is able to do those trades for its customers? Is that kind of how it works?

YA: When you open an account in eToro you can fund it with a credit card, or debit card, or PayPal. You open an account, you fund money in your account, and then you can trade basically a variety of markets from commission-free stock trading, fractional stock trading in U.S. stocks, European stocks, Asian stocks, [and] crypto trading across 60 different crypto asset, also commodities like gold and oil, [and] ETFs [and] traditional currencies. So we're trying to take the most interesting assets in the world, the most global and liquid assets in the world, and make it accessible to all the people in eToro.

CR: Got it. At which point did you start to add crypto? I understand that you did this pretty early on, what drew you to add crypto so early?

eToro embraces crypto

YA: So during 2008, during the financial crisis, which was very interesting as a fintech entrepreneur because suddenly we saw all the systems blackout, and that's from somebody coming from a computer science background. It showed me how broken the system is because suddenly the banks were closed. You couldn't trade, the markets were closed, everything froze, and that led me to start writing about the concept that is called “The Good Dollar”... — universal basic income on the blockchain… which we launched later on. But when I started writing about The Good Dollar.

What I wrote is there's a need for a transparent money system which is open 24/7, and a need for a currency for the internet. Then I shared it with a lot of my friends and with my brother, and then when Bitcoin started back in 2010, people started sending me ‘hey, look there's this something that looks like this currency of the internet… and I just immediately fell in love [with] the technology when we started mining a bit. We started buying crypto very early on for $5 per Bitcoin, and when I started using Bitcoin we used to talk to people at Bitcointalk.org which still exists, where Satoshi originally I think published the white paper of Bitcoin Then we started talking to people and actually paying them with Bitcoin, and when I started using Bitcoin it was the same feeling when I started using the internet — when I made my first trades in the stock market I felt this is a technology that can connect everybody around the world and that eventually this technology can change the entire world of financial services to be one open financial system that is open 24/7 for everyone around the world and doesn't shut down suddenly when there's a financial crisis.

So we were very excited and passionate about Bitcoin. We started writing about the tokenization of Bitcoin very early on, we actually built a decentralized exchange on Bitcoin with atomic swaps of tokenized assets we called “colored coins” back in 2012. Then we added Bitcoin trading at the end of 2013 to the platform. We were one of the first regulated financial institutions because we're regulated as capital markets providers. We also had to explain to the regulators what we were doing, and we really had to work with regulators and explain to them why we wanted our customers to buy Bitcoin and this was just before Mt. Gox collapsed, which wasn't great timing. But I think we were very early on to learn how to custody and how to explain to regulators what we do with crypto. Then, later on, it enabled us to also be very early on in the crypto rally… We were close… to Vitalik… because of the colored coins and tokenization… whitepaper… he wrote with us [and] then when we looked at Ethereum. We managed to add Ethereum… to the platform… early on in 2017… when it was trading at about $4… and from there the rest became history. Crypto became the most popular asset [on] eToro for a long period of time.

Discussing crypto with regulators in 2013

CR: That's so interesting. Can you tell me how it was to convince regulators back in 2013 to add crypto. I mean, people are still having issues explaining to regulators what crypto is and why it's important to include and so on, but back in 2013 I can't imagine what that was like.

YA: It was a difficult process. We tried to basically explain that you were able to own assets. So if you have a financial services provider, you should be able to enable them to buy you assets that are not necessarily regulated assets… Because we were already offering to trade their foreign stocks, currencies, commodities like gold and oil, then we tried to explain that this is another foreign asset that we can keep on our books and that we can enable our users to eventually trade it. But again, it was a process of really explaining how we custody the assets, how we save them, etc., and it still is a process.

I think now it's constantly changing, I call it ‘from Bitcoin to the metaverse. We moved from explaining Bitcoin to explaining other cryptocurrencies like Ethereum, to explaining blockchain and ICOs, and then suddenly Defi protocols that generate yield and staking, to now NFTs, and it'll just keep on moving. I think this world is moving so fast and it's really hard for regulators to keep up with that innovation and… build that framework where they can protect customer interests alongside enabling customers to enjoy that huge innovation that we're seeing in financial services.

CR: So were you speaking with Israeli regulators about this? Is that your counterpart when you need to add new financial assets?

YA: It was mostly European regulators, then later on U.K. regulators. So eToro today is regulated in Europe, in the U.K., Australia, in the U.S., and setting up also now in Singapore and the United Arab Emirates, so it's always a global discussion with multiple regulators.

CR: Oh, so you need to talk with regulators in each country that you're operating, not just where you're based?

YA: Yeah, exactly.

CR: Oh my god, I don't envy that, it sounds like a pain. And right now, what does your crypto offering look like? How many tokens do you offer? Do you offer something else besides trading tokens?

YA: So first, we offer the global markets alongside crypto assets. Today, we support about 60 different crypto assets. We have this process of doing due diligence on crypto assets before adding them to the platform, and we continuously add more and more crypto assets. So we try to cover I would say the top 60, going to the top 100 to top 200. We also offer a wallet so people can trade crypto assets alongside stocks. So you can buy Tesla, Facebook, and Google alongside Bitcoin, Ethereum, and Ape Token, and then you can also withdraw it to your wallet. You can move your Bitcoin and Ether to your wallet and move it to your hardware wallet — that came later on because we started with a trading platform.

Then we created what's called the eToro Money Platform, which enables you to basically move assets from the trading platform into a custodial multi-blockchain multisig wallet. Today, that product also offers a visa debit card which is connected to your crypto wallet. We continuously add more and more features on the crypto side, so we just launched our Delta Portfolio Tracker which enables you to track all of your crypto assets on your hardware wallets [and] on your exchanges — so you can actually connect about a 100 different exchanges to Delta today. And you can actually track also your Ethereum NFTs and explore about 45,000 collections of NFTs, So we're constantly evolving with the market. In Delta, you can actually explore I think about 15,000 different crypto assets. So we're constantly evolving and adding more assets as we see what's interesting for our users.

Converging CeFi and DeFi

CR: So you can move your crypto assets to a wallet, and this is a custodial wallet. Are users able to move their assets to a non-custodial wallet or is it always in the eToro system?

YA: They can move it to their custodial wallet, then from their custodial wallet they can move it to their own non-custodial wallet. So people are able to take it off to their hardware wallets if they want as well. Today, we are thinking about how to integrate the eToro experience better from a transition from CeFi to DeFi. We're very excited about what we're seeing in web3 and in DeFi, but there is a bridge that still needs to be built… I trade on DeFi quite a bit and I’m very excited about smart contracts in that space. But how you converge between customers who are working in a regulated environment and used to work with custodial assets to a non-custodial environment, that's something that we're looking at right now and figuring out the right path for our users.

CR: That's so Interesting. What are your initial thoughts with integrating DeFi? Coinbase tried to do [by] offering lending using something like Compound in the backend. What kind of things are you exploring?

YA: So the first steps for us [was] we started offering staking on some assets on the eToro platform, which included globally Tezos, Cardano, and Eth 2.0, and we started that from a custodial point of view. So we said ‘okay, we custody the assets, we'll do it’. Then gradually, what we've noticed is that this entire process of DeFi is moving so fast [that] it's hard to do it from a custodial perspective.

We looked at NFTs as our first sort of entrance into the DeFi space. So in my view… for a lot of people… NFTs are their first step into the non-custodial space... It's the first time a lot of my friends suddenly had to buy crypto and bought Ethereum-based NFTs and started using marketplaces. I think NFTs create a bridge between quote-unquote ‘normal people’ and DeFi because, until very recently, I think only extremely sophisticated users used DeFi. It doesn't mean it's extremely sophisticated, it doesn't necessarily mean that they're phds. I think sometimes ‘super sophisticated’ could be just a very smart 16-year-old or 21-year-old who's figuring that out and is a crypto-native.

But I think gradually [that is] what's happening right now, which is why we are excited about the NFT space — you see a lot of people who weren't into crypto. I found myself explaining numerous times to non-crypto people why [they] should invest in Bitcoin…, what Ethereum and smart contracts [are], why should you invest in Ethereum. Then, as you go through the various crypto assets, you lose most ‘normal people' because they're like ‘okay, I get crypto, maybe I get smart contracts, [but] I don't get the crypto asset number 30 and why I should be interested in it unless again I'm a trader, unless I'm speculating on something’. Token economics are probably more complicated than investing in stocks.

I think NFTs enabled people to see something that's more tangible. It's nonfungible, but for normal people, it's suddenly tangible. I hold this image, I see this image, I hold this digital art. Suddenly… we’re seeing people are coming from music, to celebrities, to sports, to people from really all the areas of culture, suddenly are going into the crypto space and exploring it. And I think for us at Etoro, where we always thought about simplifying finance and [creating] simpler access to capital markets and to crypto markets, suddenly this means there's interested people that want simple access to DeFi, with NFTs, I think, being the first mass-market asset class for crypto.

CR: So how are you enabling this? Are you offering NFTs directly on eToro and then facilitating that transition to a non-custodial wallet?

YA: So, right now… two weeks ago… we just launched… the Delta Portfolio Tracker, which enables you to connect your non-custodial wallet… through [more than] 30 [wallet] providers, so you can actually connect into Delta your non-custodial wallets so you can track your NFTs. We started with Ethereum, but the purpose is really to be able to explore all of your assets across all blockchains in one place. And not only web3 assets, but web2.0 assets as well. So you can connect your eToro wallet, you can connect your eToro account, you can create other accounts like your Coinbase and Robinhood, your Binance account, [and] you can aggregate all the assets into one place. Then we started supporting 45,000 collections so we can actually track data around 45,000 collections of NFTs — see their prices [and] see their activity. The next step is now we're connecting to marketplaces, so you'll be able to connect your eToro account into your Delta account to access various marketplaces for NFTs.

CR: Okay, so people will be able to use their eToro account to buy NFTs directly?

YA: We're looking at this similar to how we looked at tutorial money… You move money from your eToro account, you bought Ethereum on your tutorial account, and you want to move it into your eToro money account. We want to facilitate funding your non-custodial wallet so you can actually access NFTs as well.

CR: Got it? Okay, so eToro can start to become kind of like an onramp?

YA: So [eToro] is an on-ramp. It's an onramp into capital markets [and] into crypto markets. Today, our thinking of how we bridge that on-ramp into DeFi [is] specifically to start with NFTs. But we understand that eventually it's becoming more than NFTs.

All existing assets will become digitized and migrate on-chain

CR:That's super interesting. I think, broadly, that's a really important role that CeFi or fintech can have in DeFi, in Web3, and non-custodial applications — becoming that bridge for people to more easily go from their credit card or their fiat into transacting and using Web3 applications. Do you agree? Do you see that as maybe eToro's role in DeFi?

YA: I think eToro's role is bigger than that because our view is that eventually people need to manage their investments in a more holistic way, and when you think about investing, diversification is the most important part of investing.

I think what we see in the crypto world, sometimes this is an unpopular opinion in crypto, but people are way overweight on crypto and sometimes when people are in DeFi, they're way overweight in DeFi. If your entire wealth is in ERC-20 tokens, you should think about diversifying a bit of your wealth. And that's because on a long-term horizon, I don't think traditional capital markets are going to disappear and people need to understand how to manage their investments on a long-term horizon across multiple asset classes [as] interest rates are going higher.

Stocks, potentially even bonds, although they haven't been favorable recently, EFTs, crypto —the core crypto assets, Bitcoin is digital gold and Ethereum is digital oil. and of course DeFi, which enables you access to newer types of assets, or NFTs, [which] is digital art. Our view is that our role is to help people manage their investments and become successful investors across multiple assets so they can understand how to manage their entire wealth.

Eventually, I think that convergence between Web 2.0 and Web3 [happens], but it's all a question of ‘how fast is this transition going to happen’? In my view, we're looking at the next maybe 10 to 20 years where most assets in the world become digital because you can't even think about what it means not to be digital… So I don't think in 20 years we're going to have a lot of analog assets. We're going to have central bank digital currencies, we're probably going to have government bonds, we're gonna have most stock markets move into a transition of 24/7 blockchain-based assets. We're gonna have a variety of digital art, and obviously crypto assets as they exist today, but this is a long transition, and it's always easier with new assets to do transformational technology than with existing assets.

Within that process,... I'm meeting more and more people who are crypto-native, [whose] first investments were crypto. They just want to do non-custodial on-chain transactions, and they're basically telling us we don't want to do anything that's not on-chain. The question is how do you transfer traditional assets, maybe even gold, oil, and the stock markets on-chain to give that holistic experience? And how does that process look, going from CeFi into DeFi, because I think eventually most assets in the world are going to be digital assets. You can say DeFi is the world of digital assets, but some of the centralized entities are still going to have a role, and some of the centralized assets.. Apple shares are centralized by definition. Those are shares of Apple. How will those eventually get digitized for a digital-native and crypto-native generation?

CR: That is so interesting! Do you think that will be the default among the younger generation? That more and more people will become crypto-native and want to do everything on-chain? Or for decades to come do you think it will still be a minority?

YA: Yes I think it will become the majority… People used to say there's traditional finance and fintech, and fintech runs 10 times faster than traditional finance. I think what we're seeing in the DeFi space is running 100 times faster than traditional finance, and I think… when you have industries that run simply faster, they eventually eat the old industry. And so I do think we're looking at an inevitable transition where most assets in the world become digital assets, blockchain-based assets. But there were a lot of open questions around KYC, around regulation, around permissioned versus permissionless blockchains. In this transition from traditional finance to decentralized finance, I think a lot of those questions haven't been answered yet.

CR: Yeah, I agree that it seems inevitable that there will be the transition. So you're saying you believe your role, or eToro's Role in this, will be to provide diversification and allow people to add all sorts of assets to their portfolios. I see that you have different alternatives, like you offer ETFs, you offer smart portfolios — like thematic investing, you offer this social investment component where you can follow other investors. I'm wondering which model have you seen gain the most traction or be most popular? I know that in traditional finance, ETF and passive investment… has overtaken active investment… in the past few years. Those sorts of index funds are really popular in TradFi. But in DeFi, to me, it's kind of curious that there are some tokenized index products but they haven't gained so much traction, so I'm just curious to hear your experience on that front?

Shifting dynamics of generational wealth

YA: I think it's interesting because again we're looking at two very big transformations which are both transformations of wealth. So we're looking at crypto markets moving potentially from $2 trillion to $200 trillion, which is really on the back-end, assets becoming digital. And from the other end, we're seeing a generational transformation of wealth moving from older generations to younger generations. That's sort of by default also from our generation growing older and amassing wealth.

I think younger generations are leading what we consider today… the rise of retail investors, which is people want[ing] to be more involved in the decision making. They want to choose their stocks, they want to choose their cryptocurrencies, they want to participate in meme-stocks and meme-coins because they want to ape in and because they believe in something. They want to be involved in ESG-related companies, and understand the scoring of ESG companies to invest in what they believe in. I think younger generations are so connected to the internet and to the wealth of information that they don't feel they need to just give someone else their money and forget about it.

I think ETFs, funds in general, were more of a Generation X product, and now when we think of Generation Y and Generation Z, they are becoming more active, they are becoming more social about it. They talk about what's happening in the markets, and this explosion of I think now hundreds of millions of users suddenly are participating in trading and investing that didn't exist before. Historically, when you think about how many people in Chile traded the stock markets or the global markets, it was very few. You needed to be wealthy… You didn't have a lot of people to talk about it [with], now you can talk about it with millions of people around the world at any given moment. People can find new assets to trade and I think the fact that people can talk about the markets on social media, whether it's social media like platforms like eToro, or Reddit, or Twitter, the fact that this conversation is becoming a global wide-scale conversation [means] the barriers to entry are getting lower.

It's funny, I was explaining to my son about Bitcoin and then he looked at the price of Bitcoin and then he told me ‘it's too expensive, but I heard about Dogecoin that's much cheaper’. So I think the fact that the entry point is getting significantly lower expands significantly the target audience, and when the target audience grows, the social interactions [grow too]. If you grow this entire market and this entire conversation, then many more are actually talking about the market. So I do think that what we're seeing now is a trend of the rise of retail investors, and the move from passive to active.

CR: Is that risky though because it's kind of been proven that it's extremely hard to beat the market? Like investing in just like the S&P500 In the long run turns out to be a lot more profitable than trying to do stock picking, so I wonder whether this all makes sense.

YA: I think taking risk by investing in anything means taking risk. But you can ask yourself another question: does it make sense to buy Bitcoin? It's taking risk. Does it make sense to buy Ethereum? It's taking risk. But it's probably the right decision. If you look at the last five years, then probably it still is for the next five years. I think it's all about understanding how to take risk.

You asked me as we started that you'll want to talk about entrepreneurs and what they need to learn in order to build a business, and it's all about taking risk because no risk, no reward. You need to understand the risks, you need to analyze the risks. I'm a very big believer that across time, if you learn how to invest in growth assets — which by definition are risk assets, whether it's tech stocks, whether it's sometimes undervalued stocks, whether it's crypto assets, whether it's ICOs…., [whether]it's NFTs, it's always about taking risk and understanding how to manage that risk.

And I think we're seeing retail investors saying we want to take that risk and we're willing to take that risk and understand it because we're looking for that reward as well. We're looking for those upsized returns, and I think that it makes sense to enable people as long as they understand what are the risks they're taking to participate in it. I think, gradually, it also teaches a lot of people about volatility… Some people ask us ‘how do your users handle the market correction because some stocks went down by 50%?’ And I tell them they already learned from crypto how to handle volatility. If you think about memes in crypto like ‘HODL’, [it] actually means something that Warren Buffett has been saying for the last 50 years — you believe in something, you invest in something, invest in the long-term, HODL it

I think… the statistics that the average portfolio manager or the average stock picker does less than the index [is] in my view a bit of a misleading statistic because you're talking about the average person making less than the average. So if you take fees, errors, etc., that's almost by definition the issue. It’s not that I don't think that it makes sense to invest in ETFs, I think it's a good investment just to invest in EFTs of Nasdaq and the S&P, but I think if you want to form a view of the markets, if you think that you want to be overallocated into crypto, or tech stocks because you believe in that technology, if you believe in renewable energy and you want to buy stocks of solar energy companies, I think it makes sense for you to make those decisions with your money. You worked hard to get that money, you should have the ability to make the decisions where you want to invest in.

The importance of risk management

CR: So to you, the right way to do it is like ‘okay, take a view, you don't have to be market neutral... but do it in a diversified way so you don't have everything in one sector?

YA: Yeah, I think in investing the concept of diversification is very important because… you don't want to put all your eggs in one basket because if something happens you basically don't have access to capital to reallocate. So I invest in value-stocks like Coca-Cola and Mcdonald's, and the blue-chip value stocks. I invest in tech stocks. I am heavily overweighted into the crypto markets as well, and in crypto I'm more into the large cap cryptos versus the small ones. But I invest across the entire crypto market. Then when you have a correction like we're seeing now where tech stocks are getting a hit, or tech stocks that are not profitable are even taking a bigger hit, then you can take some money out of your value portfolio and reallocate because that's where the opportunity is.

Right now, crypto is taking a hit and Bitcoin suddenly is back at $40,000 — because I have money elsewhere I can reallocate back into crypto, and basically that's how you adjust returns over time, and that's also how you make sure you're not stuck [at] minus 50%, especially in high risk assets… That’s called modern portfolio theory, but it's a relatively old theory which is if you look at several high risk, high reward [assets] — let's say double-digit returns, a 20% risk or reward element — but they're uncorrelated, and you construct a portfolio of assets which have high risk, high reward, you actually lower the risk of the portfolio. So your portfolio risk is actually lower, the volatility of your portfolio is going to be lower, while keeping the potential upside reward of the portfolio. That's the concept of risk management and risk diversification in a nutshell.

CR: Nice… In the last section of the interview… I'd love to… move to your founder story and how you've been able to build this company over 15 years into something that's so successful and used by millions and millions of people worldwide. I think every founder dreams of having the reach that eToro has, so I'd love to get your nuggets of wisdom. If you go back to the early years of eToro, what do you think was the catalyst, when did you start to see that ‘hockey stick’ growth when you had the first kind of massive wave of users come onto the platform? What do you think triggered that for you?

The importance of adapting and evolving

YA: I think we had to constantly adapt eToro. I think maybe one of my biggest lessons is from one end be very persistent on your long-term vision. I still believe there's a huge upside because hundreds of millions of people are going to want to make their own investment decisions. They're going to need tools to help them manage their investments over time, and these new generations need better tools that banks and traditional financial systems simply don't provide, so I think our vision to go 10 times from where we are today.

Over the next ten years is a huge opportunity and it's the same as I believed in when we just started eToro when the markets were much much less proven. But we always believe that there's a huge opportunity in making trading and investing simpler and in opening the global markets for everyone to trade and invest in a simple and transparent way.

And on the other hand, we had to sort of pivot around what's happening in the markets. We started eToro as a desktop app. We had a very big sort of hard decision to let go of the desktop app to move to a flash-based system. We had to make a big decision eventually to move from flash into a web-based angular-based system, to move to a mobile-first approach where we said people in 2015 will move to mobile… Today, more than 90% of our users are on mobile.

We started with one asset class, we then added crypto. We made a bet on crypto and that bet actually failed because of Mt. Gox. So we spent a lot of money and effort adding Bitcoin, and then nobody used Bitcoin, no one. For three years, from 2013 to 2017, nobody traded Bitcoin. We had done all that work, we did so much preparation for Bitcoin. But then, when Mt. Gox happened, Bitcoin went from $1,200 to $200, and no one cared anymore about Bitcoin for three-plus years. But we still believed in it and we kept on investing in it and then when [the 2017] crypto rally started, we started adding more and more crypto assets. Then we launched commission-free stock trading globally, right before commission-free stock trading really took off in most places around the world. It's still expensive to trade U.S. stocks. We offer it for our customers from 100 different countries.

So again, each of these innovations, you need to have sort of a very long-term horizon to keep on investing in what you believe in, but also look at where the markets are going and being able to navigate. Right now, we don't have any business in DeFi, but I understand the importance of DeFi on a long-term horizon. So we're making our first steps into DeFi where I think NFTs are just a great way to bring non-crypto people into this new asset class, into DeFi, into non-custodial wallets, into NFTs. So it's constantly trying to look at where the market is and adapting your long-term vision into what's happening in the markets now on various horizons — what you have to do right now, what needs to be done in the next three years, and where you want to eventually be in the next five to 10 years.

CR: That's so insightful. Have a long-term conviction, but also the flexibility to adapt to shorter-term industry or market-wide fluctuations. I 100% agree. And then to wrap up, I'd love to ask you, Yoni, what makes you defiant?

YA: What makes me defiant? I think understanding that the world is changing all the time, and that people constantly think of the status quo. We have a shirt for The Good Dollar, it says “defy the status quo.” I think people very easily think that what is today is what's going to be tomorrow, and I think I understand very well that the status quo constantly changes and you need to look into the future [to] understand how tomorrow looks, and aspire to be relevant where tomorrow is and not where the status quo is.

CR:I love it. I think that's a great message to end with, and a great message to all of our listeners. Yoni, what a pleasure. Thank you so much for joining me!

YA: Thank you very much!