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Lolli CEO on bitcoin shopping trends, outlook

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Yahoo Finance’s Julie Hyman, Brian Sozzi, Myles Udland, and Dan Roberts speak with Lolli CEO Alex Adelman about bitcoin’s rally.

Video Transcript

MYLES UDLAND: The market rally, we have, of course, talked about what's been going on in the crypto space. Price of Bitcoin today is trading back above 19,000. Let's talk a bit about what we're seeing in the shopping space and how crypto is impacting some maybe more normal habits that all of us have. For more on all of that, we're joined now by Alex Adelman. He's the CEO at Lolli, which is a web browser plugin, if I'm describing this correctly Alex, that allows you to get Bitcoin rewards, essentially.

I'd love for you to maybe just break down that concept for us and talk through some of the trends you guys saw through Black Friday and through really the holiday shopping weekend that we saw a couple of weeks back.

ALEX ADELMAN: Yeah, and first off, thanks for having me. So yeah, so we're Lolli. We've created the easiest way for many people to get into Bitcoin through shopping as opposed to investing. We have over 1,000 different retailers on the platform. And some of the trends that we saw, a lot of them were due to COVID as just a dramatic increase in online shopping. We saw across the health sector, fitness sector a lot of holiday shopping. Places like Sam's Club did very well over the last month.

But yeah, it's been wild. I think sort of we have this convergence of things. We have COVID. We have the Fed printing all this money that's leading into all this interest in Bitcoin as a store of value, as a savings technology. And I think people are looking for tools like Lolli to use during this holiday shopping season.

DAN ROBERTS: Alex, Dan Roberts here. Now, obviously the amount that you guys have given out in Bitcoin rewards, the value has certainly increased in the last year thanks to the price of Bitcoin going up. You know if someone gets x fraction of Bitcoin as a shopping reward, it's worth more this year and right now than it was a year ago. And you guys are still a new-ish company.

What I'd ask is whether you're hearing from your retail partners that they're seeing a behavior of shopping increased from those customers who care about Bitcoin and who use Lolli? That is people are being driven to actually spend more at these retailers right now because they want to get the Bitcoin shopping rewards?

ALEX ADELMAN: Exactly. And our users are what I think a lot of merchants will call like a savvy shopper, you know somebody who's like looking for the best deal. And when they're sort of looking for the best deal, they're looking at do they use cash back, do they use coupons, or now do they use Bitcoin back when they shop? And so what we've seen is that over the last 2 and 1/2 years since we launched, Bitcoin has four or five xed from that time period.

And so our original rewards that are averaging around like 7% are now North of like 20%, 25% back. And so clearly our users are very happy because their rewards are four to five x what they would have gotten if they had gotten points or cash back.

DAN ROBERTS: And Alex, let's Zoom out a little bit. We're talking about this big Bitcoin rally we've seen in 2020. What we hear from most of our guest's is it's very much driven by institutions. It's Wall Street names, it's firms that are buying in, they're putting a percentage of their portfolios into digital assets, into Bitcoin. And so obviously that makes it sound like it's very much not the retail investor, the regular, the average person.

Whereas in 2017, you really had an effect where because of all the media and the headlines you sort of had regular people, newbies-- oh, what's this Bitcoin thing-- buying-in, talking, about it around the Thanksgiving table. So where do your customers come in? Because your customers very much are the retail investor, probably young people, young people who online shop. Do you think that it's being overstated how much this current rally is institutional-driven?

ALEX ADELMAN: Yeah, great question. From our vantage point it is retail that is adopting it in the masses. I think that it's difficult to quantify or to see that because it's such small amounts relative to, you know, billionaires like Michael Sailor, buying hundreds of millions of dollars of Bitcoin. And we're not at that scale yet.

But the way we look at it is investing is for like a very small percentage of the population. Whereas everybody shops. So we're going to see like sort of a slower or smaller scale to start, but way more people are getting into Bitcoin now. It's just difficult to quantify because you don't have these whales that are buying hundreds of millions of Bitcoin at a time. They're earning $5 back here and there when they shop as they normally would.

MYLES UDLAND: So Alex, do you think that using Bitcoin as like the way you use cash, right, as a real medium of exchange, is that part of your bull case for Bitcoin? Or is this idea with Lolli basically like, well, it's adjacent to how we spend dollars. And it can create those dollars and turn them into Bitcoin efficiently, I guess. But do you see a world where I'm using my Bitcoin wallet to buy stuff?

Because I don't really feel like that's something people are too excited about right now. I think right now it's as an asset is where a lot of the interest is.

ALEX ADELMAN: Absolutely. So our bull case over time will be Bitcoin as a medium of exchange. And in some parts of the world, it is a better medium of exchange than their local currency. Right now in most major markets, the US included, is people don't really want to spend their Bitcoin. Bitcoin is the greatest savings technology ever created. It's been the best performing asset over the last decade.

Nobody wants to spend their Bitcoin. And so we look at right now this sort of this next phase of adoption happening with stablecoins. And stablecoin being a digital currency that is pegged to your native local currency. And so this next phase will be people spending stablecoins and we believe earning Bitcoin. So think of Bitcoin as your savings account and your digital dollar or your stablecoin as your spending account over the next five years.

MYLES UDLAND: All right, interesting stuff. Alex Adelman is the CEO of Lolli. Thanks so much for joining the program today. Yahoo Finance's Dan Roberts, thanks for stopping by as well.