US asset manager WisdomTree hopes its forthcoming consumer-facing crypto wallet will offer an approachable experience for less tech-savvy users intimidated by the current crop.
The smartphone-based wallet, known as WisdomTree Prime, was announced in January and will have a limited US launch this summer before a full roll-out across America next year, Jason Guthrie, Wisdomtree’s European head of digital asset product and head of digital assets.
WisdomTree Prime represents a first foray into direct-to-consumer finance for a firm that’s currently best known for offering exchange traded funds (ETFs) through third parties. That’ll put Wisdomtree on a course to competing with crypto startups including MetaMask and Strike, neobanks such as Chime and traditional consumer banks like JPMorgan Chase and Citigroup.
“Two hundred million people use crypto today. These are the early adopters,” Guthrie said. “I really care not about the 200 million that are in but the next 2 billion that come on — and how we help them connect to, and use, and benefit from this space.”
Guthrie sees blockchain technology as a great tool to reduce the frictions and costs resulting from the myriad middlemen involved in financial transactions. Still, he says the end-user experience of most crypto wallets is far too complicated for the average person at the moment.
WisdomTree — which manages about $75 billion — sees an opening in the market between self-custody crypto wallets, which require a certain technical ability to operate, and the centralized accounts offered by crypto exchanges like Binance and FTX.
“There's a big gap in terms of what's out there at the moment that enables people to come into this space,” Guthrie said. Self-custody wallets like Ledger are “fine if you're really into the technology and you're an early adopter or you're very computer savvy or literate. But that's not really a viable user experience for mainstream.”
Guthrie has huge ambitions for WisdomTree Prime, seeing it as an app that can “sit at the center of somebody's financial life.”
Users will be able to deposit their paychecks, connect a debit card for day-to-day spending, invest in a selection of tokenized assets – and, over time, integrate with innovations happening in decentralized finance (DeFi).
At least initially, all assets in the wallet will be WisdomTree’s tokenized versions. So users’ dollars will be stored as WisdomTree tokenized dollars and any investments — such as bitcoin — will also be WisdomTree’s tokenized version.
Guthrie said the app’s initial offering should include versions of the dollar, US government bonds, gold, bitcoin and ether. He hopes to eventually add extra investing choices, such as tokenized stock market indexes.
WisdomTree, which has separately been seeking to launch a spot bitcoin ETF in the US, has some tools to compete in the cutthroat market for crypto wallets. For one, it has years of experience adapting investments so they can trade on other venues, including converting gold into a gold ETF. It also has a brand that’s familiar to more maintream investors.
The app’s pitch is to allow users all the functionality of traditional banking and investment — getting your salary paid, transferring money to friends, saving for retirement — while discarding the decades-old technology of the traditional financial system.
“We can make this experience manageable, feel like what they've got, but be attached and natively built on this new set of technology,” Guthrie said.
No Matt Damon
While WisdomTree will ramp up marketing as next year’s full launch approaches, it’s not planning to splurge on the types of eye-catching stunts employed by some consumer-focused crypto brands.
“If you've got a very good product that has a compelling value proposition you can attract clients without naming a stadium or hiring Matt Damon,” Guthrie said.
Still, he sees the public nature of blockchains as a potential challenge to their wider adoption in consumer finance. Because transactions happen in full view, some users might be concerned about acquaintances learning their wallet address — although crypto mixing tools might help avoid this.
As Guthrie puts it, “I want to send you 10 bucks to pay for beers last night. I don't necessarily need you to be able to then go and see my whole bank account.”
Overall though, Guthrie is bullish on the potential for crypto to disrupt financial services.
“I don't think financial services had its ‘internet moment,’” he concludes. “People fill out forms online, but they're nominally the same as what they did in-branch 20 years ago. The experience and the business model is fundamentally the same. And I think that is ripe for disruption."