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This Financial Advisor Thinks Bitcoin Could Be Headed for Mass Adoption

By Matthew Frankel, CFP® - Apr 8, 2021 at 7:03AM

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Bitcoin could eventually become a popular payment mechanism, but it won't get there overnight, according to this expert.

Tyrone Ross is the CEO of Onramp Invest, and several publications have named him one of the top financial advisors in the United States. He's also a big believer in Bitcoin's (BTC -1.73%) potential to transform the financial system as we know it. In this Fool Live interview, recorded on March 18, contributor Matt Frankel, CFP, asks Tyrone about Bitcoin's potential as a payment mechanism, why Bitcoin is such a volatile asset right now, when Bitcoin might reach mass adoption, and much more. 

Matt Frankel: For those who don't know, Tyrone is CEO of Onramp Invest. He was named in InvestmentNews' top 40 advisors under 40, which is a pretty big accomplishment. called him one of the top 10 advisors set to change the industry in 2019. That's a pretty impressive resume I just read. I gave the short version. Can you briefly explain what it is that you do? What is Onramp Invest? What do you do?

Tyrone Ross: I'm the CEO of Onramp Invest, which is a platform that is going to allow financial advisors to interact with Bitcoin for their clients the same way they would Apple right now. We're going to get into the portfolio management software and the financial planning software to allow them to model, plan, build, and give them access to qualified custodians.

Frankel: OK. I know a lot of the work you do, it's involving cryptocurrency as a mechanism for the unbanked and underbanked segment of the population. Do you view Bitcoin as a replacement for U.S. dollar, like a payment bank or a replacement for bank accounts, or a way to store wealth, or all of the above?

Ross: First, I've got to say that I'm no longer saying "unbanked" and "underbanked." That has become a trope. I say underserved. Yes, I think Bitcoin and other crypto networks are a boon to the underserved of what is allowing for access in those that have been shut out of the traditional financial system due to financial redlining, so yes.

To your second point, Bitcoin is all of those things. It's currency, it's money, it's all savings, technology, depending on where you are in the world and the lens  with which you look at it. But for me, growing up into a home that was underserved and having used the alternative financial system -- my parents, to this day, still use money orders. I came to Bitcoin because a friend sent it to me and I got it instantly, and I'm like, whoa, wait a minute. I don't have to wait three to six days for my money to settle? That's how I came to where I think the power of the Bitcoin, big "B," blockchain, is, as opposed to bitcoin, little "b," the coin, which is the price everyone is so over-concerned about.

Frankel: It definitely makes sense when you say "underserved," because it's not just people who don't have access to traditional banking services. It's people that, the traditional banking system doesn't necessarily serve them well.

Ross: Exactly.

Frankel: What you just said, three to six days for the check to clear.

Ross: Yeah.

Frankel: That's not even to mention international money transfers, how long, and cost how much money.

Ross: Absolutely -- $15 to receive a wire, to receive it; $30 to spend it. It's egregious.

Frankel: Bitcoin definitely cuts back on that. First of all, just to clarify, when you say cryptocurrency, do you focus on Bitcoin, or are there others? Because I just looked before we recorded this -- there are over 4,600 cryptocurrencies that exist. I know that some of them are really small. Let's call them very niche tokens. But do you think any other than Bitcoin, or is that what we're talking about here?

Ross: I think there are more. I think there's maybe 10, and there are probably two that I think are worth people paying most attention to right now, which is the Bitcoin blockchain and the Ethereum (ETH -1.93%) blockchain. Ether and Bitcoin. But there are some other projects out there that are notable, but the fact that there's 4,000 of them is a joke.

But for the purposes of this conversation, yeah, I think Bitcoin is the one with the biggest brand. It's the most Lindy. It's been around the longest. It's all in the news. That's the one that everyone talks and hears about. But I think what people should understand is, no matter how you feel about Bitcoin, I think that's where you should start. If you're like, I don't know, and you want to go to something else, that's fine. But you should at least start there because again, we always go back to the origin. You want to trace your roots back to the beginning. If you are into crypto networks whatsoever, then you've got to start at Bitcoin. Again, whether it's for you or not, that's a personal decision, but it's a good place to start for people to just get a feel for blockchains and things like that.

Frankel: Getting back to your financial advisory activities, I also saw in addition to all the recommendations you were given, that I already mentioned, you were named one of Investopedia's 100 top financial advisors. I was looking at that list before we were talking. There are some pretty good companies on there. I saw Josh Brown, who I see on CNBC every day.

Ross: Yeah.

Frankel: There was a Kiplinger's columnist that was in the top. You're in pretty good company there.

Ross: Yeah. I snuck on there.

Frankel: Well, I don't want to say you snuck on there, but there are over 100,000 financial advisors in the U.S.

Ross: Yeah.

Frankel: Technically, I'm a financial advisor. I'm a CFP. And I have a couple of people I advise. That puts you in the 0.1%, if I'm doing my math correctly there.

Ross: Yeah.

Frankel: How did you sneak on the list, as you put it?

Ross: For me, one of the things that I think is important is, as an advisor, you can do a lot of different things. You could work with veterinarians; you can work with horse jockeys; you can work with whoever you want, and you just got to find your lane. I'm a wirehouse baby. I came up through the wirehouse because I was in Merrill and I left Merrill, went independent, and when I went independent, I'm like, you know what, I'm going to find my voice. I'm going to leverage social media to talk about the things that I care about, which is being a voice for the voiceless and the underserved in this country. Then I had this passion for early-stage startups and crypto, so they all came together and it gave me my own unique lens and voice.

I think it also helped that, again, I'm an African American male. There's not too many of us. When you have a voice and you can speak to something and add value, it's very easy to stand out. I just leaned on what I cared about and shed the skin of I need to be this to fit in to get on these lists. And it's funny, when you try to get on the list, you don't; when you don't try, you get on the list. Take that for what it's worth.

Frankel: No, it makes sense. You said crypto is one of your big passions. What role can and should cryptocurrency play in a well-rounded investment portfolio? Even if I'm trying to use it for banking purposes at the moment, what role would it play?

Ross: I love how you asked it that way -- "can and should." What it can do, the asymmetric properties of it, and sharp ratios and diversified, all of those beautiful things that advisors care about -- it does have a place in the portfolio for that. The key is trying to find out, one, for a client, whether they should own it at all. If it helps them get closer to their goals. I'm not here to say that I think it does, but that's for an advisor to determine based on the risk profile of the clients.

Also, speaking of risks, how much risk can the client take? If a client comes in and says, "Yeah, tell me about this Dogecoin thing or Bitcoin." You're like, "Wait, Mr. and Mrs. Client, your risk profile is a 2. Dogecoin is a 22. Why are you asking?" Re-profile the client, and look at the sweet spot is somewhere between 2.5% to 5% of the portfolio. When you look at the improvement, and risk-adjusted returns, and things like that, it's hard to ignore it. It can be a great add to a portfolio.

Should it is a totally different conversation. Where someone is in age; what their goals are. If I'm looking to retire, am I adding Bitcoin that has 80% drawdowns to my portfolio? Probably not. If I'm 35 and I've come into my own and I have ample liquidity, and I see this as a store of value at some point, or digital gold, or whatever, a venture type bet, sure. I think it all depends on if it should versus what it can do.

Frankel: OK. I know you saw this news, because you tweeted about it today. Morgan Stanley just announced that it's launching funds to give clients access to Bitcoin. I assume you applaud this move, first of all.

Ross: Well, I don't know if I applaud it so much as it's shocking to me that the broker/dealers are moving faster than the RIAs. That's shocking. I do think it's good news because again, if you go back a couple of years, it was Morgan Stanley, and JPMorgan, and Goldman Sachs, and this was stupid and it was tulips or whatever. It's just validation in that sense. What I don't like is Bitcoin is supposed to be for everybody, but yet they're saying you got to be accredited and you got to have $2 million of assets at the firm or whatever.

But again, I get it, because most of the folks at Morgan Stanley are high net worth or whatever and folks that want to get at the cash that they can. This is just part of the financialization of Bitcoin, and I get it. I applaud it in the sense it is great for the space, because one of the things before you get mass adoption, you get mass acceptance. We need to get through mass acceptance. Then we'll get mass adoption, and I think when your Morgans of the world, and your BNY Mellons, and all of these names that people know, start to get involved, then you go, all right, we're reaching the mass acceptance stage.

Frankel: When do you think we're going to see mass adoption of Bitcoin as a payment mechanism? I know just in the past year or so, I know PayPal (PYPL 2.70%) announced that they're planning to roll out Bitcoin acceptance on all of their merchants. Do you see this as a way in the future thing? Do you see it as a few years? In other words, how long do you think the speculative period of Bitcoin lasts?

Ross: When crypto has its iPhone moment, and I think that's going to take a lot more of design folks, UX/UI, that are used to designing this beautiful experience for people, where it's just operating in the background and you don't know. When I'm using Bitcoin, and blockchain, and all these things and I don't even know, and it's just this beautiful experience. Then you get the Steve Jobs of crypto, who says, I'm going to make you want something that you didn't even know you needed, and you're like, "Man, I really need an iPhone." Then we're going to make sure every time we update it, you're going to go out and get it. But it's a beautiful experience.

I think once we get beautiful design and experience into crypto, it's going to cross over, because then you get away from public key, private key, losing this. What about this? How do I store it? Where do I put it? Once all that's gone and it's just in my phone, my Apple Wallet or whatever. You saw the news of Visa (V 3.13%) yesterday again, saying that with a credit card and everything else, making Visa simply to access a Bitcoin, easy to use on your phone, and be able to convert it to dollars. When we get there, it's game on.

And regulation plays a part in that too, because if you use a Bitcoin to buy things, every one of those transactions are taxable. We have to make sure that we get away from that as well. There's a long way to go here.

Frankel: One of the things I often say about new technology is if it's not easy, people aren't going to do it, no matter how good it is.

Ross: One hundred percent.

Frankel: In other words, you're saying when Bitcoin becomes as easier or easier to use than U.S. dollar, that's going to be the iPhone moment, I guess you would say.

Ross: One hundred percent, because that's what it is. It's cash. The ease of which I could just walk up to you and hand you $20 and walk away. That's not taxable. I can do the same thing with Bitcoin right now. But when everyone does that and it's just a matter of fact -- "I just sent you Bitcoin" -- you get it and there's nothing to it, then we'll be there. But we're not there yet.

Frankel: OK. When I talk to people about Bitcoin, one of the things they're most worried about, and it's something that Bitcoin bulls are really excited about, it's the volatility. Right now, as we're speaking, Bitcoin is worth nearly 10 times what it was a year ago.

Ross: Yeah.

Frankel: Being fair, that's not stable as a payment mechanism.

Ross: No.

Frankel: What do you say to investors, even with a high risk tolerance, who are worried about the volatility of Bitcoin?

Ross: I want to address what you said. The Bitcoin blockchain is a beautiful payment mechanism. The price isn't. So you've got to separate those two. I agree with you. It shouldn't be a payment mechanism. Now, there's something called Lightning that's being built, but you shouldn't be buying things with your Bitcoin anyway for exactly what I said. Every time you buy a coffee, that would be a taxable event, and there's other things to that. What I think is important here with the volatility is, yes, those of us that are crypto-hippies look at the volatility and say, "Oh, it's great," because we can stomach it and we know better. The average person goes, "It's down 80%." A lot of people can't stomach a 10% drop, 5% drop, 1% drop. This thing drops 80%? A lot of people don't want to take that ride on the roller coaster.

But the volatility, when you learn about Bitcoin, is a feature, not a bug, and it's one of those things where, when you look at it, it also is proof of how early we are still. It will smooth out.

Last month, the 30-day volatility had jumped higher than it had been, I think, for the previous seven years. Going back to 2013, the 30-day volatility jumped up 160-plus percent. My company did some research on that. It got picked up. The volatility has picked up. The correlation to risk assets. A year ago, when things went nuts, it went down with it, because the first thing you do is you sell risky assets. So we're still there.

But every day it gets stronger and grows, and it stays around and you get more institutional adoption, and there's the ability for large investors to move in size with best execution and best price discovery. Those things are important, and we're getting there. But for the time being, yeah, the volatility for those of us that can stomach it and know go, "Yes, It's on sale," but not everybody can do that. And that will change.

Frankel: The way you look at it is the more important thing would be Bitcoin moving from say, 10% adoption to 20% adoption than moving from $20,000 to $50,000?

Ross: Exactly. That's the key, and there's that volatility and adoption, too. Because think about it. Go back to 2017. It's all retail, and now all the institutions are like, "Look at these idiots." Now you've got the institutions coming in, and now all the retail that was in and stayed in, they're like, "Look at these idiots." The volatility of who comes in; the volatility of price; the volatility of price discovery.

I did a webinar with Digital Assets Research and FTSE Russell, and at any point that you can check the price of Bitcoin across some exchanges, it could be off by 2%. That's crazy. There's volatility in a lot of different things which are new, and the best example is this: I'm not a parent, but I have three nephews. You ever watch a child learn to walk? That is very volatile. "Oh, they're going to hit their head. Oh, they fell again." And you know what they do? They get up and they keep trying, and they fall.

But it's a very volatile thing. It's new. Anything new, or any 12-year-old -- Bitcoin is 12 -- 12-year-olds are volatile. I say this is in jest comparing a technology to a human being, but anything that's new is going to be volatile. It just is. And then it has to find its way, and I think that's what's happening in this space.

Frankel: It's fair to say as adoption keeps going, it will eventually stabilize. That could be 20 years from now, but it should eventually find some kind of equilibrium.

Ross: Yeah, it will. I think folks like myself, a long-dated call option on a store value, I think it will get there. I don't think it's there now, but you're betting that it'll become that in the future.

Frankel: That's right. I mean, it's important to note that U.S. dollars aren't completely stable. They fluctuate against other currencies all the time. So that's never going to go away entirely.

Let me pivot to regulation just for a second, if I may, because you mentioned that earlier. Regulation and taxes are obviously two different things, but they're two big concerns in the Bitcoin community. On the tax issue first, do you think the IRS is eventually going to recognize Bitcoin as a currency, meaning that every time you buy a soda with Bitcoin it's not going to be a taxable event?

Ross: Oh, man. That would be nice. But I don't know if we ever get there. Right now they look at it as property. I think it will remain that way for a while, but we'll see. Sunayna Tuteja, who was just at TD Ameritrade, who is now on the Federal Reserve, she's very smart, and capable, and we're all excited that she's there. Maybe she gets them closer to recognizing that it should be recognized as a currency. I don't know. We'll see, I think that's a ways off. But it'd be nice if it happened. I do think we'll get there at some point, but I think it's a ways off.

Frankel: Should regulation be embraced by the cryptocurrency community or feared? Because I mean, this headline I saw in India the other day when they were proposing to outlaw cryptocurrency, obviously, that should be feared. But I mean, just normal oversight of Bitcoin, should that be embraced as mainstreaming?

Ross: See, the decipher punks and the original libertarians, they're like, "No." But I think if you want mass adoption, you need it to be mass-accepted by regulatory authorities. The financialization of it and putting these boxes in place if you really want it there. Ben Hunt was talking about this on Twitter. He was like, "Look, guys. That's where it's at. You've got to embrace this. We're here. The financialization of it is here."

The beautiful thing about Bitcoin and being decentralized and self-sovereign, there's only so much regulation you can put around it. It's open-source. It's borderless. It's open, decentralized, all of these different things that allow those properties to remain inherent to it, which is why it's so elegant and beautiful. But I think they should embrace it. I think it's good for it, but to an extent. You don't want overregulation, and I think that's what most folks are worried about, the overregulation.

But I think some regulation is good, like that clarity, property, well, now it's currency. For the SEC and the CFTC to get together, for financial advisors to give them clarity on it's a security, it's not a security; you can say this, you can't say that. There's a lot of the regulatory compliance environment that needs to be clarified, but I think we'll get there eventually.

Frankel: What is the best way you advise your clients to actually get involved in Bitcoin? Is it to buy directly through an exchange? Is it to use a broker that offers Bitcoin? Is it to use one of those, like, the Bitcoin Trust that trades on the exchange? I saw a look when I said that one.

Ross: Buddy, I literally just got done doing a webinar with an advisor. It was an Investopedia webinar, actually, on this. And that came up about what advisors should be. If I'm an advisor, I'm doing this, and this is me personally, as an advisor I don't really actively practice. But I would not, personally right now, actively put my clients in anything. Me, personally, I can't speak for every advisor. There's nothing out there that I would go "All right, I would put my clients into that." If there was a way for me to get direct exposure for my clients at a qualified custodian which exists right now, I would do that. That's available, and again, there's some piping that needs to happen, which is why I have a job. That's what Onramp is trying to do.

Now, take the advisor out of it, and I'm just an individual. There's a myriad of wonderful places you can go. I'm a big fan of Cash App. Swan Bitcoin is another good one. I mean, there's Coinbase; there's Robinhood; there's a million choices for people. Again, I love Cash App with what they're doing for the underserved and how they are giving people access. But as an advisor, I would be very careful to vet things, especially based on the SEC risk alert that came out, which is custody, policies and procedures, valuation methodologies, being able to disclose fees, all of the price of these vehicles. If you could do all that due diligence, have at it.

But again, if I'm RIA or even with BD, they can't do it anyway, even with Morgan Stanley. Maybe you put them in this fund and you're free and clear. But I would make sure that there's qualified custody -- that there's KYC, AML, all that other stuff that I can track an archive and everything else. But me personally, I'm not using anything that's out there.

Frankel: There are really no good exchange trading platforms yet for Bitcoin. They should be coming soon.

Ross: Yeah, they're coming, and there are some exchange-traded funds now that are out there. Again, it's not my job to say whether they're good or bad, but I can give my personal opinion. When I did have clients that were doing this, they already owned it before they came to me, but I've never made a suggestion like, "Hey, you should go buy," because I knew what was out there. What advisors should and shouldn't do, and you shouldn't be making recommendations on stuff, like, if you tell a client, "All right, we're going to buy Apple at Fidelity," that's a very safe thing to say, and you tell a client, "Oh, we're going to buy Dogecoin and Binance." Probably shouldn't be doing that. Totally different conversation.

Frankel: Sure. I mean, I'm glad you mentioned that. One of the biggest hang-ups that a lot of people have is, "Oh, my Bitcoin is going to get hacked or stolen," or something to that effect. That was a big problem in the early days. Not so much a problem anymore. I mean, most of the revenue exchanges, they personally became insurance, the U.S.-based exchange. A lot of their Bitcoins are in cold storage, which means not stored on the internet, so you can't track. Do you see any big security risk with buying Bitcoin, as long as people buy it from a reputable place? I know you said Cash App is one of your favorites.

Ross: There's always a security risk, and the main risk is the person. I've gotten five -- count them, five -- in the last couple of days, folks that have lost their crypto because they didn't store passwords properly, because they didn't follow proper protocol of storing their own keys or their seed phrase, all these other things. But the majority of people who don't want to handle all that would go to a centralized authority like a Cash App or a Coinbase. You are there, but again, there's the risk of they can cut you off from it or something happens, so there's all types of risks. It's just which risk you want to take. I think if you want to take that self-custody security risk away, yeah, you go to one of those platforms and they can help you with that.

Frankel: I guess, in that way, the slowness of the traditional banking system is an asset. Because if someone hacks into my bank account and tries to wire some money, there's usually a period I can catch it. That's not necessarily the case with Bitcoin.

Ross: You hit "send" on that, and then it's gone, right? Then you're like, "Oh, my God, please send me the confirm. It went through."

Frankel: The exchanges themselves are safe, but make sure you save all your passwords and keys on that.

Ross: Again, Coinbase, Gemini. Gemini has a very robust security system. A lot of these exchanges know, and they do have insurance as well. Yeah, I think you are in safer hands there using a centralized custodian than doing it yourself.

Frankel: Just to clarify real quick, a lot of these that you mentioned -- Coinbase, Gemini, they cater to people who want to buy and hold Bitcoin as well as traders. They have pretty sophisticated trading platforms.

Ross: Yeah, they do. If you want to buy and hold or you want to trade your life away.

Frankel: I assume you're a buy-and-hold type of guy.

Ross: Buy and hold. I do not trade. I buy it, buy it, buy it, hold it, and I don't look at the price. Don't care about the price. I've never met a rich trader popping bottles in the club.

Frankel: I would definitely agree with that one. Buy and hold is definitely the way to go. I assume you would advise clients the same. Buy the coin; hold it; don't trade.

Ross: Sure. Again, depends on the client. I mean, I had clients that would trade in their brains out, but that's what they wanted to do with their own money. Again, it was held away from me. I couldn't see it, couldn't do anything with it, but they had their Bitcoin, which is away and safe and then they wanted to trade. All right. It's just like an advisor now. You don't think your clients have a little play account where they're trading GameStop? Of course they do. They just got their safe assets with you, and I think any advisor would be OK with that. But the advisor is like, "Don't bring that to me. Keep it over there." And you do it right in. I'm not going to give you any advice on that. That's on you.

Frankel: Since we are an all-around investment website, you mentioned, I think, the ideal Bitcoin -- you said the sweet spot is 2% to 2.5%, I think, if I'm quoting you correctly?

Ross: Yeah, somewhere between 2.5% to 5%. That's the sweet spot when you add it to a portfolio.

Frankel: So depending on risk tolerance, as you said?

Ross: Yeah.

Frankel: What are the other 95%, then? Your opinion as the advisor.

Ross: To 5%; that's the sweet spot there when you add it to a portfolio.

Frankel: So depending on risk tolerances, as you said?

Ross: Yeah.

Frankel: What are the other 95%, then? Your opinion as the advisor.

Ross: Again, that has a lot to do with the client's age and goal, things like that. I think right now, how do you not look at emerging markets? I think value has suffered, but growth stocks have done well. I'm still a fan of holding individual stocks. I think there's value in that, but again, it's tough.

But as far as a crypto portfolio, I think there's Bitcoin, and you can possibly look at adding in some Ethereum, if that makes some sense to you. Things are going on in Ethereum in blockchain and Ether, the actual token. The Ethereum blockchain and what's going on with DeFi allows you to get some yields, so that might make some sense if you have some stable coins there, USDC or whatever. Ether, the actual token, is a good hold as well for some people. But again, it's all a personal type of thing. But I think having a sleeve of Bitcoin and then depending on your goals, a nice mix of overseas -- everyone should own SPY; don't know why they don't. But it's a personal situation with goals and risks and age and everything else.

Frankel: We are just about out of time, but I wanted to give you the last word. If people want to find out more about what you're doing and give a website at whatever you would like to share or anything like that?

Ross: If you want to find out more about what I'm doing, please go to and help feed a hungry child. There is no reason why there is child poverty in this country, and I will not shut up and stop until every child is fed and they have the best chance at achieving financial success and freedom in the United Great States of America.

Frankel: You heard it. Thank you so much for joining us, Tyrone. That was a great interview.

Ross: Thank you so much for having me. I appreciate it.

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