My One Month Review of Bank With LVL (The Revolutionary New Crypto App)
One of the few benefits of the great quarantine is spending quality time with my family in Denver. While here, I have been trying to convince them, especially my father, that Bitcoin has a superior monetary policy to the dollar due to its deflationary nature and lack of central control. I felt like I was Anthony Popliono trying to explain crypto to Mr. Wonderful on Squawk Box. But after a few conversations, I was able to transmit the revolutionary tendencies of Bitcoin to him, which lead to him wanting to purchase a small amount of Bitcoin. Let me keep a long story short; trying to buy bitcoin on someone else behalf is nearly impossible for many reasons.
For tech-savvy millennials, it is simple to download Coinbase or Gemini to get set up with a crypto exchange and wallet. But, buying bitcoin is not a one size fits all process, and when onboarding folks from the legacy financial system to the crypto ecosystem, there are not many good options. Thankfully, LVL, a new player in the fintech, is attempting to fill the gap. Before I go into the details I want to make it explicitly clear that I am in no way incentivized to write this review and I have no relationship with them.
What is LVL
According to their website LVL is on a mission to build a better financial institution by offering a subscription product that includes an FDIC insured checking account, free crypto trading, and premium customer support. I will explore each one of these offerings, but from a high level, I think LVL’s products are spot on. Finally, there is a financial institution that offers an FDIC checking account and crypto services in the same application. Anyone who has tried to buy crypto knows that its a hassle that can take days. LVL makes this process instant and straightforward by allowing its members to purchase crypto and manage fiat currency in the same application. For me, the days of initiating ACH transfers and waiting for exchanges to fund my wallet are over.
Can a Subscription Financial Institution Work?
LVL is a monthly 9 dollar fee that quickly pays for itself. The subscription fee gets pulled from your FDIC insured checking account or your crypto wallet. It is my understanding that the 9 dollar fee is the only revenue source for LVL. I have used the service for about a month, and I have no problem paying for it. The reality is that if you are buying crypto each month, the fee pays for itself many times over. Unlike Robinhood and other services, LVL does not engage in market making or have transaction fees. Instead, they have a feature called autopilot. Their members can act as the market maker for other members by using their assets as liquidity, allowing them to earn money on the spread.
Killer Customer Service:
My favorite aspect of LVL is the word class customer support. When you sign up, you are assigned a personal banker that you chat with inside the app. One of the worst parts of large financial institutions is their abysmal customer service. Between outrageous hold times and having to get transferred between departments, the opportunity cost of your time is too valuable for sub-optimal customer support. Instead of spending 10 minutes on hold, I pop Christopher, my banker, a message, and I get a push notification when he responds.
LVL should allow its members to trade in the public market
LVL is a new product and just launched. I would love to see their roadmap expand to allow for market trading. If LVL adds equity trading, they will make a compelling argument for non crypto savvy millennials to bank with them. As I discussed in my last piece, we know that crypto is important for millennials, even if they don’t understand how it works. Many folks use crypto as a short strategy by owning something like the Grayscale Bitcoin trust or a small amount of crypto in Coinbase. From my experience, LVL offers a substantially better financial experience than its competitors, so adding public market trading will allow them to deliver a KO blow to other institutions.
LVL is different from Cash and Robinhood
When I first learned about LVL, on the Pomp podcast, I thought it was similar to Square’s Cash App and Robinhood. But the more I use LVL, the less I believe that. On the crypto side, LVL is issuing real crypto, not fake IOUs like Robinhood and Square. In layman’s terms, Robinhood and Square put restrictions on how you use and liquidize your bitcoin.
But the real shocker is that neither Robinhood nor Squares legacy banking services is FDIC insured. If Square or Robinhood is hacked or goes under, the FDIC is not mandated to cut you a check. Square has put in a bank charter application with the FDIC, but it is unlikely that they will be FDIC insured until 2021 or 2022.
My Concluding Thoughts:
LVL is awesome. It is as simple as that. What they are doing is revolutionary, and I think others in the space should be worried. My only critique with LVL is that they hold your crypto keys. From what I understand, two of three keys are required to initiate a crypto transition. Note that these keys are stored in three different places:
- Set 1: Stored with LVL
- Set 2: Stored with Bitgo (a crypto infrastructure company)
- Set 3: Stored in a secure vault in an unknown location
This makes me a little uneasy, so I prefer my crypto keys to stay in my physical ledger wallet. For most crypto maximalists, this is something we are unwilling to budge on. I hope that LVL will allow its members to hold at least one set of keys someday. That said, LVL is the real deal. Please go check them out. And if you want ten dollars of free Bitcoin use my invite code: 1peb5jthq
Have a question or want to chat. Send me an email: crypto@dlh-ventures.com
