Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: a lot of virus headlines to get to on this
Speaker 1: Friday afternoon. Visor shots halting severe illness but still allowing
Speaker 1: infection in Israel, Fiser also supplying the US with millions
Speaker 1: of shots for young kids, and then l A's fully
Speaker 1: vaccinated people. They are making up one in five infections
Speaker 1: right now. And I do want to get an update
Speaker 1: to the global tracker that we follow here at Bloomberg,
Speaker 1: cases topping one point five million and death succeeding four
Speaker 1: point one million. At the same time, more than three
Speaker 1: seven billion doses of the vaccine have been administered. We
Speaker 1: should note that many of those vaccine doses do require
Speaker 1: two shots to have someone considered fully vaccinated. Well, let's
Speaker 1: get to all that and more with Dr Ian LUs Beder,
Speaker 1: clinical Professor of Medicine at n y u's Lango and
Speaker 1: Medical Center. He joins us now on the phone from
Speaker 1: Long Island. Dr LUs Beder, how are you good? Good?
Speaker 1: Thank you Tim. Happy Friday. Yeah, Happy Friday. It's good
Speaker 1: to talk to you. Um. I want to talk a
Speaker 1: little bit about what we learned from Israel earlier today.
Speaker 1: Fiser's COVID nineteen vaccine provided a strong shield against hospitalization
Speaker 1: and more severe diseases in cases caused by the contagious
Speaker 1: deltavrean in Israel in recent weeks, even though it was
Speaker 1: just thirty nine percent effective in preventing infections. That's according
Speaker 1: to the country's health ministry. What do you what do
Speaker 1: you make of that third nine percent figure? So I
Speaker 1: think we're seeing UH Orwinian behavior in action than UH
Speaker 1: more aggressive viral escape or these breakthrough infections. The good
Speaker 1: news is that the antibodies that are produced by the
Speaker 1: vaccines still seem to provide some good protection in reducing
Speaker 1: hospitalizations in depths. Unfortunately, is becoming less effective over time
Speaker 1: for acquiring the delta infection, and there are a number
Speaker 1: of articles. There's a recent article in Nature from July
Speaker 1: of one that does show the delta variant is less
Speaker 1: resistant to not only monoclonal antibodies, but also to endogenous
Speaker 1: antibodies from vaccines. So, you know, unfortunately the delta variant
Speaker 1: spike has changed enough that it is escaping in part
Speaker 1: the antibodies that we've produced from the vaccine. And hopefully
Speaker 1: it really is a race. It's a race between getting
Speaker 1: enough people vaccinated versus the spread of the delta. And
Speaker 1: at this point it looks like Delta's women. What does
Speaker 1: that look like if Delta wins, not just if it's win,
Speaker 1: but if Delta wins, well, I think it really will
Speaker 1: mean uh more widespread infections and widespread deaths. You know,
Speaker 1: in the United States, you have to sort of compare
Speaker 1: a country to country because they're not all similar. For example,
Speaker 1: Mexico is seeing a big outbreak. Um they're only about vaccinated,
Speaker 1: where over fifty percent vaccinated. India is a little over
Speaker 1: ten percent with a much bigger population. So the substrate
Speaker 1: a number of people who can get sick with Delta
Speaker 1: or any other variant for that matter, is much greater
Speaker 1: in certain countries, but in the United States, I think
Speaker 1: what that means at this point is that we're probably
Speaker 1: looking at another hundred million people at this point who
Speaker 1: have not been vaccinated or may slowly get vaccinated, probably
Speaker 1: acquiring DELTA, and that will probably mean, by my guestimate,
Speaker 1: another one hundred or maybe two hundred thousand deaths, which
Speaker 1: will bring us to the you know, seven to eight
Speaker 1: hundred thousand deaths, which is unfortunate that but that's those
Speaker 1: are the numbers are the way the numbers are looking
Speaker 1: at this time. Well, speaking of numbers, I do want
Speaker 1: to make sure to include these numbers for Viser's vaccine.
Speaker 1: We did mention that it was just thirty effective in
Speaker 1: preventing infections. UH. That's according to the Health Ministry and Israel. UH.
Speaker 1: The Health Ministry also saying that it provided protection against
Speaker 1: hospitalization against severe illness for an unspecified number of people.
Speaker 1: Those people were studied between June and July seventeenth. That's
Speaker 1: according to report They came out Thursday from the Health Ministry.
Speaker 1: So that's that's pretty good news. Because it still is
Speaker 1: very effective in providing against hospitalization and severe illness, right,
Speaker 1: I agree completely. Look, the uh the vaccine over time
Speaker 1: is becoming a little less effective in preventing the acquisition
Speaker 1: of of COVID, but it certainly seems to be pretty
Speaker 1: effective in in preventing severe disease hospitalization, and which is
Speaker 1: really what we want. Unfortunately, Delta has relatively mild symptoms,
Speaker 1: running nose, headache, really common cold symptoms. Some people may
Speaker 1: not even know it. Obviously, if you've had two vaccines
Speaker 1: and you're coughing a lot or short of breath, get retested,
Speaker 1: get a swab, and if you have COVID present on
Speaker 1: the PCR nasal swab, contact your doctor. We do have
Speaker 1: some treatments like monoclone land of bodies which can still
Speaker 1: be effective. They're a little less effective, but this also
Speaker 1: highlights where we do need to look for better treatments.
Speaker 1: Whether and you know, people talk about a variety of
Speaker 1: things that really or very early studies, whether it's hybermettin
Speaker 1: or other anti viral drugs. Mark is working on an
Speaker 1: anti viral you know. Unfortunately, by the time studies come around,
Speaker 1: we will have a lot more infections but fortunately we're
Speaker 1: not seeing uh, greater deaths. It doesn't seem to be
Speaker 1: a more lethal strain, which is good. Yeah, it's good
Speaker 1: to get a little bit of good news in here.
Speaker 1: I do want to get your thoughts on just in
Speaker 1: the last minute that we have, and then we're gonna
Speaker 1: come back to you. Dr Lusbader, los Angeles County's top
Speaker 1: health officials, saying that fully vaccinated people made up one
Speaker 1: in five COVID nineteen infections in June and warned that
Speaker 1: the figure may rise in July with a higher level
Speaker 1: of community transmission. Does this mean that even if we're vaccinated,
Speaker 1: we should be wearing masks? That's a good question, you know,
Speaker 1: Masks or questionably effective. Certainly the N ninety five masks
Speaker 1: are are much more effective. Masks tend to protect other people.
Speaker 1: When you wear a mask, you have COVID, you're coughing,
Speaker 1: it contains those secretions. The virus can really get around
Speaker 1: all normal surgical masks and kind of these barrier masks.
Speaker 1: You know, I think it's something if you have an
Speaker 1: underlying disease or if you're worried, definitely wear a mask.
Speaker 1: There's no harm to that. How beneficial that will be
Speaker 1: is unclear. Well, let's get right back to the latest
Speaker 1: on the virus with Dr Ea must Beader, clinical professor
Speaker 1: of Medicine at n y US Lango and Medical Center.
Speaker 1: He joins us on the phone from Long Island. Dr Lusbader,
Speaker 1: here we are It's July. We are in the thick
Speaker 1: of summer travel season. I traveled for work last week
Speaker 1: over the weekend, and then this week. Airports were absolutely packed.
Speaker 1: There was not an open seat on any of the
Speaker 1: flights that I took. This is happening at a time
Speaker 1: where we are seeing hotspots emerged, not just here in
Speaker 1: the United States among unvaccinated, but in other parts of
Speaker 1: the world too. You mentioned Mexico when we were talking
Speaker 1: earlier today, an article on the Bloomberg by our own
Speaker 1: Andrean Varro writing that COVID's exploding in Camcoon Los Cabos
Speaker 1: as a new wave has hit Mexico and Kancun, for example,
Speaker 1: cases have stored to a point where the hard Rock
Speaker 1: Hotel has set aside two floors for guests with symptoms,
Speaker 1: and some hotels are saying they're offering discounts for those
Speaker 1: who are in quarantine until they're no longer contagious. It
Speaker 1: raises the question should people, even if they're vaccinated, be
Speaker 1: traveling right now? You know that I think has to
Speaker 1: be a very individual decision based on your underlying health
Speaker 1: and when you got the vaccine. We are periodically checking
Speaker 1: antibody levels and most hey and said, I've just randomly
Speaker 1: checked if they're traveling and concerned. Some countries require antibody proof.
Speaker 1: Most antibodies are high, very high from spike protein. But
Speaker 1: now we're seeing that that alone doesn't really fully protect you. Um.
Speaker 1: I think it's going to be very hard to get
Speaker 1: the genie back in the bottle. You know, we're really
Speaker 1: only vaccinating globally a very small percent. It is likely
Speaker 1: this is just going to continue to spread because it's
Speaker 1: so highly contagious and uh fortunately not more lethal, but
Speaker 1: totally you will have an increased number of deaths. Um.
Speaker 1: I think people have to be careful to go to
Speaker 1: hot spots like Mexico or only people are vaccinated and
Speaker 1: they're having outbreaks. You know, I would think twice about
Speaker 1: putting myself in that environment if I could avoid it,
Speaker 1: or uh to be very careful and distance and try
Speaker 1: and get an N ninety masks. Did you say that
Speaker 1: you were able to test for antibody levels ahead of
Speaker 1: people going to hot spots. Yeah. I don't want to
Speaker 1: encourage everyone running to their doctors saying please send antibody levels,
Speaker 1: but just randomly in some patients because when they do travel,
Speaker 1: they're they're required to not only show proof of vaccination,
Speaker 1: but actually antibodies, and so randomly. When I've checked people
Speaker 1: for spike protein, they're very, very high, which is good.
Speaker 1: In other words, it shows the vaccines are working. You know,
Speaker 1: when there's a debate as to vaccinating younger and younger kids.
Speaker 1: There are pros and cons to that, obviously, But the problem,
Speaker 1: unfortunately is even if you have high antibodies, that doesn't
Speaker 1: seem to prevent the escape. In other words, that delta
Speaker 1: you may get that infection. It does seem to be
Speaker 1: partially controlled, but it doesn't guarantee that you will not
Speaker 1: get that adulta infection for sure. Dr LUs Vader, I
Speaker 1: just wonder, and this is a question that we've we've
Speaker 1: talked about before, with the delta variants spreading so rapidly
Speaker 1: among unvaccinated populations here in the United States. Outside of
Speaker 1: the United States, do we get to a point where
Speaker 1: we think about being on the other side of this
Speaker 1: vaccine are the other side of the pandemic. Rather, is
Speaker 1: just a question of how quickly people can get infected
Speaker 1: and either recover or not recover, And that's how the
Speaker 1: virus dies out right, That's how the that's how the
Speaker 1: pandemic spread. It took three years. Uh large percent of
Speaker 1: it was about a ten percent death rate. We fortunately
Speaker 1: are are much lower than that, somewhere, you know, one
Speaker 1: percent or below, but that varies from country to country.
Speaker 1: There are some countries that have a very high percent,
Speaker 1: whether or not that student poor hospital facilities or underlying
Speaker 1: medical illness is obesity diabetes. Brazil, for example, is a
Speaker 1: very high percent death rate. But yeah, what you're saying is,
Speaker 1: unless we can get vaccines distributed, we're really looking at
Speaker 1: eight billion people. So we're in that, you know, the
Speaker 1: global population getting infected, and most will do well and recover.
Speaker 1: The problem is we're seeing um post covid or long
Speaker 1: hole symptoms. So even though most people do well, their
Speaker 1: COVID leaves a mark. There's some brain issues, the brain
Speaker 1: fog and long hole symptoms. So if you can avoid it,
Speaker 1: it would be good, which is an argument for vaccinating
Speaker 1: young kids. We vaccinated you know, young kids for hepatitis B,
Speaker 1: but in kindergarten, long before they're going to have any
Speaker 1: exposure or possible exposure. So it's something to think about.
Speaker 1: We need, you know, good safety data. But uh, we're
Speaker 1: playing catch up at this point. The virus is really
Speaker 1: outrunning us, and all we can do is try and yeah,
Speaker 1: block and tackle as best as convey. It's too bad
Speaker 1: because a few weeks ago, I don't think we would
Speaker 1: have been having the same conversation. Dr Iain LUs Bader,
Speaker 1: thank you so much for taking the time as you do.
Speaker 1: On Friday's clinical professor of Medicine at n y U
Speaker 1: Lango's Medical Center, he joins us on the phone from
Speaker 1: Long Island. This is Bloomberg Business Week with Carol Masser
Speaker 1: and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well.
Speaker 1: The new issue of Bloomberg Business Week is out on
Speaker 1: newsstands now. All of the articles are also available online.
Speaker 1: Joining me now is Joel Webber, editor at Bloomberg Business Week.
Speaker 1: He's with me in the Bloomberg Interactive Broker Studio. Joel,
Speaker 1: I got my hands on the new issue. The cover
Speaker 1: story the Border, the builder, the Border, and the thirty
Speaker 1: million dollar boondoggle Tommy Fisher. We went through his story yesterday.
Speaker 1: How did you choose it for the cover. We had
Speaker 1: this amazing photo shoot and you know, you get to
Speaker 1: see his wall and it is not ugly, it is striking.
Speaker 1: And we also photographed the very end of it, which
Speaker 1: speaks to the project because he built uh only he's
Speaker 1: only built three miles of it. Uh. It looks highly
Speaker 1: secure because of that. You can just walk around the
Speaker 1: end of it if you mean to. Um. But I
Speaker 1: once up, we kind of saw all the artwork, um,
Speaker 1: and have this great untold story of this guy who
Speaker 1: was bolded up to drop thirty million dollars building a wall.
Speaker 1: I was like, that's an untold story that I want
Speaker 1: on the cover this week. I gotta tell you too.
Speaker 1: Just scrolling through Twitter yesterday and today, this story has
Speaker 1: absolutely taken on wildfire. It totally gone viral. Yeah, why
Speaker 1: do you think that is? I mean, what is that
Speaker 1: not the secret sauce? Because I think that that's kind
Speaker 1: of impossible to answer. But this story seems to kind
Speaker 1: of touch every little list when we think about what
Speaker 1: makes a story work. Well, the I think the backdrop
Speaker 1: to the story is that keep in mind, we have
Speaker 1: a crisis on the southern American border right now, right so,
Speaker 1: and I think wherever your politics are on on immigration, UM,
Speaker 1: on the wall itself, UM, there are elements of the
Speaker 1: story we're going to resonate with you. UM. And I
Speaker 1: think we we told it kind of a bigger story
Speaker 1: UM about the business guy sort of at the center
Speaker 1: of this particular wall, and it's you know, it's really
Speaker 1: we don't go into the the immigration one, we're another.
Speaker 1: So I think it ends up resonating with a lot
Speaker 1: of different odds is because of that, and at the
Speaker 1: at the very center of it is this you know,
Speaker 1: businessman who made a choice to put thirty million dollars
Speaker 1: into a project that he has not made that money
Speaker 1: back on yet. One part of the story that I
Speaker 1: found absolutely fascinating was the idea that the state of
Speaker 1: Texas could actually be the one potentially to continue this
Speaker 1: wall project now that President Trump is no longer in office.
Speaker 1: We have no real intelligence behind that, but Governor Abbott
Speaker 1: has indicated that he is interested in building a wall.
Speaker 1: If you're a Texan and someone's already solved the problem
Speaker 1: for you like Tommy Fisher could have could could have done.
Speaker 1: I think that puts him sort of at the at
Speaker 1: the front of the list, right. Uh, what Tommy Fisher
Speaker 1: accomplished his was the bigger was the bigger thing here,
Speaker 1: which was that he built a wall on private land.
Speaker 1: This is a private project, right, It's not federal land,
Speaker 1: which is what has allowed the wall a wall to
Speaker 1: exist elsewhere on the board. Um, the fact that Texas
Speaker 1: is all privately held along the Rio Grand that's a
Speaker 1: huge problem if you're going to do any sort of
Speaker 1: building like this, and why uh you know, it's sort
Speaker 1: of an unlikely success story for for him, although again
Speaker 1: I will mention that he's still million dollars. Yeah, he's
Speaker 1: still he'll still waiting to get paid. Well, let's move
Speaker 1: a little further west to West Texas. That was the
Speaker 1: site Tuesday of Jeff Bezos taking off from near Van Horne, Texas.
Speaker 1: You were there, I was there. That's how I know
Speaker 1: with miss geography so well. I did a lot of
Speaker 1: driving in West Texas. And by the way, did you
Speaker 1: know that eighty miles an hour? I think I mean advisable.
Speaker 1: I think you can go as fast as you want
Speaker 1: in this teeny little Nissan that I'm hoping I could
Speaker 1: barely make it to eighty miles an hour, but I
Speaker 1: nonetheless was able to Ashley Vance had a great piece
Speaker 1: and has a great piece and the current issue of
Speaker 1: the magazine arguing that the future of space is much
Speaker 1: bigger than just Bezos, Brandson or Musk. It was a
Speaker 1: great read to to really dig into ahead of my
Speaker 1: visit there. Yeah, so actually wrote this story. Um, he
Speaker 1: knows a lot about space and sort of the space economy,
Speaker 1: and what his ultimate takeaway I think in this story
Speaker 1: was like, you know, it's for all the billionaires in space.
Speaker 1: All of a sudden, that is just a very small
Speaker 1: amount of the bigger space story. The space economy, in
Speaker 1: part helped by SPACs, actually has really caught fire. We're
Speaker 1: talking like what the economy of the future is really
Speaker 1: going to be powered by this? And I think, you
Speaker 1: know what Musk, the Musk angle here is. You know, obviously,
Speaker 1: um he's in the rocket business, but starlink and the
Speaker 1: internet potential is also on a lot of people's minds. Now,
Speaker 1: as as as that becomes potentially a really viable way
Speaker 1: to get cheap broadband to places that haven't had it yet.
Speaker 1: Um but he also found this kid, And this is
Speaker 1: what I love about what's happened with space. He found
Speaker 1: a kid who's basically just been able to use satellites
Speaker 1: that have amazing imaging capabilities. And and this kid who's
Speaker 1: like just graduating college was the one who found what
Speaker 1: ends up being, um you know, nuclear a nuclears, a
Speaker 1: new nuclear site in China that here too, four was
Speaker 1: previously unknown. Um so actually goes a lot of different places.
Speaker 1: But it's like, forget about the billionaires. There's a lot
Speaker 1: of other really interesting things happening in space. I think
Speaker 1: it's such an important point, and I think it's a
Speaker 1: really good way to think about billionaires going to space,
Speaker 1: because they've said that space torment tourism is just a
Speaker 1: small part of this. And if we were to think
Speaker 1: back to sixty years ago when Alan Shepard was the
Speaker 1: first American to go into space, we didn't know there
Speaker 1: was going to be such thing as an Internet. We
Speaker 1: didn't know that there could be satellites who could deploy
Speaker 1: that Elon Musk could deploy and get Internet to millions
Speaker 1: of people who don't actually have Internet. So I think
Speaker 1: that the opportunities here are ones that we don't even
Speaker 1: know about, and it's potentially the breakthroughs are just going
Speaker 1: to be coming with increasing speed. So the cost of
Speaker 1: getting up there, uh, still beyond my budget, but the
Speaker 1: the other effects that will come out of this stuff
Speaker 1: is going to be I think it's for the next
Speaker 1: five to ten years is gonna be really fascinating space
Speaker 1: to watch. I see what you did there, um, Joel,
Speaker 1: I do want to get to a couple more stories. Uh,
Speaker 1: this one by Kelly Gilblam product placement finds new relevance
Speaker 1: and add free streaming. I think this is really interesting
Speaker 1: story because the part of the reason, and Kelly goes
Speaker 1: into this in the story. You know, because of the
Speaker 1: rivalry and the shake out between Apple and Facebook, there
Speaker 1: is this sort of new dawn that I think everyone's
Speaker 1: trying to figure out what it's gonna look like. How
Speaker 1: are advertisers going to spend that money when suddenly you
Speaker 1: can't Facebook maybe doesn't track them as well now that
Speaker 1: users have the ability to opt out with iPhones and whatnot.
Speaker 1: So Kelly had this great little insight which was like,
Speaker 1: product placement has already been boom me and it's because
Speaker 1: people are getting out of Obviously the linear version of
Speaker 1: this on traditional shows and the streaming era makes it
Speaker 1: way more competitive because there's so much more opportunity and
Speaker 1: you can also digitally change the product part is unbelievable.
Speaker 1: The image that you have here like a green screen,
Speaker 1: take your pick? What what your brand here? Right? Well
Speaker 1: thereos free lay you name. It could be Ruffles next week,
Speaker 1: That's what I mean. When can they change it based
Speaker 1: on who's watching? Yeah, I think it's tied to how
Speaker 1: much money you're willing to spend, maybe the length of
Speaker 1: the contract, but you know, I think the takeaway here
Speaker 1: is um is that we don't know how big this
Speaker 1: could get. But even a retro space like products, it
Speaker 1: could be on fire. Again. Well, it's a fantastic issue
Speaker 1: full of great stories. Joe Weber, Editor Bloomberg Business Week,
Speaker 1: with me in the Bloomberg in Active Broker Studio. Check
Speaker 1: out the new issue of Bloomberg Business Week online and
Speaker 1: on news stands. Now, this is Bloomberg. You're listening to
Speaker 1: Bloomberg b This Week with Carol Master and Bloomberg Quick Takes.
Speaker 1: Tim Stinovic on Bloomberg Radio's Well Happy Friday, Everybody, tim
Speaker 1: Stenavig live in the Interactive Broker's studio in New York.
Speaker 1: Carol Master is off today. The price of bitcoin right
Speaker 1: now pretty much flat, trading at just over one and
Speaker 1: fifty dollars, still down more than fifty from its high
Speaker 1: of nearly sixty five thousand dollars back in April. Well,
Speaker 1: let's get into all things bitcoin, cryptocurrency, decentralized finance a
Speaker 1: k a d FI and more with Michael Son and Shine,
Speaker 1: the CEO of Gray Scale Investments. It's the world's largest
Speaker 1: digital currency asset manager. Michael, it's so great to chat
Speaker 1: with you. How you doing on this Friday afternoon. I
Speaker 1: am doing excellent. Thank you so much for having me
Speaker 1: excited to chat with you. Well, I'm excited as well.
Speaker 1: I want to start with the big picture here, just
Speaker 1: the price of bitcoin. I think still when people think cryptocurrency,
Speaker 1: bitcoin is the number one thing that comes to mind,
Speaker 1: and you can't help but think about that more than
Speaker 1: fifty to client that we have seen in recent months
Speaker 1: struggling to get back to anywhere close to where it
Speaker 1: was back in April. Well, what do you make of
Speaker 1: the volatility that we've seen and sort of the struggle
Speaker 1: for it to get higher. I think investors are used
Speaker 1: to this kind of volatility UM in the digital currency
Speaker 1: asset class as a whole um that certainly includes bitcoin UM.
Speaker 1: It has been a very interesting market. I think we've
Speaker 1: seen a couple of UM exchanges UM have some leverage
Speaker 1: come out of them, which we generally think is something
Speaker 1: that's healthy for the overall ecosystem. But when we do
Speaker 1: see pullbacks and prices like this, which is not a
Speaker 1: new phenomenon within crypto, we tend to see these kinds
Speaker 1: of corrections see the asset class form a stronger base
Speaker 1: to only eventually go on to take out higher highs
Speaker 1: over time. And so when investors do think the pullbacks,
Speaker 1: they will often use them opportunistically to add to their
Speaker 1: positions and be able to form you know, a larger
Speaker 1: position in digital assets like bitcoin and others. What about
Speaker 1: the next positive catalyst for for bitcoin? I I can
Speaker 1: clearly remember the biggest negative catalysts that we recently heard about,
Speaker 1: and I think it's fair to say that Elon Musk
Speaker 1: expressing concerns a few months ago over the environmental cost
Speaker 1: associated with cryptocurrencies and and bitcoin, but that came after
Speaker 1: he said that Tesla would accept bitcoin is payment for
Speaker 1: Testlas cars, and that seems like a really big positive catalyst.
Speaker 1: What are you thinking is the next actual positive catalyst
Speaker 1: for for bitcoin. We heard comments from Jack Dorsey yesterday
Speaker 1: about Twitter's future and bitcoin. They didn't seem to help
Speaker 1: bitcoins price much. I think you're going to continue to
Speaker 1: see more announcements of both bitcoin and the cryptoastic class
Speaker 1: as a whole continuing to being folded into the traditional
Speaker 1: financial services space. So even just yesterday you saw banks
Speaker 1: like JP Morgan announcing that they were going to give
Speaker 1: their clients the ability to invest in cryptocurrency funds, including
Speaker 1: you know, great scale products. And I think that in
Speaker 1: the near term you're going to con and new to
Speaker 1: see wins for the asset class overall, whether some of
Speaker 1: those announcements do come from banks like JP Morgan and others,
Speaker 1: or you're continuing to see companies like Twitter and Square
Speaker 1: and Tesla and micro Strategy, you know, continuing to see
Speaker 1: bitcoin and other assets move onto corporate balance sheets, and
Speaker 1: now even seeing nation states looking at adopting bitcoin as
Speaker 1: legal tender. These are the types of winds that I
Speaker 1: think helped to not only you know, solidify the role
Speaker 1: that crypto has with an investment community, but also really
Speaker 1: begins to shift perception. So exciting stuff from our point
Speaker 1: of view. Now that JP Morgan has made this announcement, who,
Speaker 1: in your opinion, do you think is the next bank
Speaker 1: to do something similar. Well, I think you're certainly going
Speaker 1: to see that. And you know, it's already been the
Speaker 1: case that gray scale products have been available to be
Speaker 1: bought and sold through many of the online brokerage firms,
Speaker 1: but now moving into some of the wire houses like
Speaker 1: JP Morgan, would not surprise us to see some of
Speaker 1: the other wire houses and bulge bracted banks begin to
Speaker 1: follow suit. We kind of seen a similar trend amongst
Speaker 1: many of them as they built out, either they're blockching
Speaker 1: working groups or even just made direct investments into digital
Speaker 1: asset related businesses so they can continue to not only
Speaker 1: learn about the asset class, but also demonstrate had just
Speaker 1: how fervently they're responding to investors preferences and and uh
Speaker 1: wanting to get exposure to the A class. So when
Speaker 1: you're Michael speaking with these banks and getting an idea
Speaker 1: for what they want in the services that that they
Speaker 1: want to be able to provide their clients. JP Morgan Chase,
Speaker 1: for example, their wealth management clients are going to be
Speaker 1: allowed to invest in a selection of crypto funds, including
Speaker 1: gray Skill, Bitcoin Trust from you guys among others as well. Um,
Speaker 1: what are the what are the they trying to provide
Speaker 1: their clients with? Like, what are the clients coming to
Speaker 1: them and saying that they need That's that's causing a
Speaker 1: bank like JPMorgan to come to you and say, we
Speaker 1: want our clients to get exposure to this. Well, as
Speaker 1: an investor today, there is a general appreciation that cryptocurrency
Speaker 1: as an asset class is not going to go a way.
Speaker 1: It's something that is here to stay and investors want
Speaker 1: access to it now. The reason that JP Morgan and
Speaker 1: other banks have to make these policies or amend these
Speaker 1: policies is because they don't offer the ability for their
Speaker 1: investors to get access to bitcoin or other digital assets
Speaker 1: directly through their platforms. Their platforms are typically providing services
Speaker 1: that allow them to access lending and credit and buying
Speaker 1: stocks and bonds and ets, but not yet crypto, and
Speaker 1: so their clients are typically doing that type of business
Speaker 1: away from the banks themselves. So if JP Morgan and
Speaker 1: others continue to open themselves up to having the ability
Speaker 1: for their clients to access cryptocurrency funds like gray Scale
Speaker 1: on their platform, but then they continue to have a
Speaker 1: more holistic picture of their clients investible assets, and not
Speaker 1: only that but also demonstrates to their clients that they're
Speaker 1: really listening to their preferences. What is the role that
Speaker 1: that you believe that bitcoin plays and a traditional portfolio
Speaker 1: right now? Well, I think it depends on the kind
Speaker 1: of investor that you are. Um. I'd say the first is,
Speaker 1: you know, many investors look at bitcoin as a digital
Speaker 1: gold or a digital store of value. So they look
Speaker 1: at it as an asset that kind of maybe help,
Speaker 1: you know, curb inflation pressures that their portfolio may experience.
Speaker 1: So whereas investors maybe when to gold their bonds or
Speaker 1: other flights to safety, um, now they also have bitcoin
Speaker 1: as an option in their portfolios. I think other investors
Speaker 1: may look at it as a technology investment more akin
Speaker 1: to maybe payment for some of the technology investments that
Speaker 1: they may have in their portfolio. And then I think
Speaker 1: other investors may look at bitcoin um not only either
Speaker 1: as a payment mechanism, and so it maybe is something
Speaker 1: that you know, is more akin to remittance than some
Speaker 1: of the money transfer mechanisms that may be out there,
Speaker 1: and for some investors it's just an entirely new asset
Speaker 1: in their portfolios, and where they make room for it
Speaker 1: will vary depending on how they're allocated. I want to
Speaker 1: get right back to Michael Sonenshein, chief executive officer at
Speaker 1: Gray Scale, joining us some phone from New York City. Michael,
Speaker 1: I want to get further into Gray Scales products and
Speaker 1: talk a little bit about GPTC and others. GBTC is
Speaker 1: the ticker for Gray Scales Bitcoin Trust. Uh, it's still
Speaker 1: trading at a discount to bitcoin. The idea here is
Speaker 1: that it does give investors exposure to bitcoin, but it's
Speaker 1: trading at a significant discount to the cryptocurrency right now.
Speaker 1: What's it going to take to to get those things
Speaker 1: on par Well, that's that's exactly right. So Great Scale
Speaker 1: Bitcoin Trust ticker GBTC is solely impassively invested in bitcoin UM,
Speaker 1: the product trade you know as the world largest digital
Speaker 1: currency UM investment vehicle were the largest bitcoin funds hundreds
Speaker 1: of millions of dollars a day in notional trading volumes,
Speaker 1: and what we have seen over the last few months
Speaker 1: is the product trading at a discount to navs. And
Speaker 1: so what we've seen is many investors, particular smart money
Speaker 1: and institutions, stepping into the product and buying shares of
Speaker 1: g BTC at a discount because is that actually allows
Speaker 1: them to own or control and have exposure to more
Speaker 1: bitcoin buying shares of GBTC at a discount than it
Speaker 1: would if they take that same amount of capital and
Speaker 1: bought bitcoin in the super market. So you're arguing that
Speaker 1: that it's been a good thing for at least investors
Speaker 1: who have recently bought into it, because they're essentially if
Speaker 1: they were to buy today, get get a ten point
Speaker 1: three discount on the price of bitcoin. It has definitely
Speaker 1: been an interesting opportunity for investors who are looking for
Speaker 1: bitcoin exposure in the form of a security in a
Speaker 1: brokerage account, retirement account, you name it. Over time, we
Speaker 1: do believe that the product will converge its price back
Speaker 1: towards its net asset value, or perhaps maybe even reverts
Speaker 1: to trading at a premium. But ultimately we are a
Speaker 1: hundred percent converting this product into an e t F
Speaker 1: when the sec is ready to make that kind of
Speaker 1: an approval, in which case the arbitrage mechanism is built
Speaker 1: in there to move the products back towards net asset
Speaker 1: value every day. When when do you think the SEC
Speaker 1: will allow that? Well, I think the timeline around it
Speaker 1: is really tough to speculate on. I think the SEC
Speaker 1: is very encouraged and engaged with you know, participants like
Speaker 1: Gray Scale and others, but they're really looking to see
Speaker 1: the market lead to a point of maturation that's just
Speaker 1: not there yet, and looking for things like, you know,
Speaker 1: more regulation around the spot exchanges, surveillance sharing agreements between
Speaker 1: the exchanges are really larger, significantly regulated market. So over
Speaker 1: time we'll get there, but when that will be is
Speaker 1: tough to speculate on. What has interests been like in
Speaker 1: some of the other products as cryptocurrency prices have been falling,
Speaker 1: Gray Scales Ethereum Trust, for example, it's been very robust.
Speaker 1: I think if you had asked me that question a
Speaker 1: couple of years ago, I'd tell you that investors were
Speaker 1: really only interested in bitcoin or interested in the ethereum
Speaker 1: you know. Today, Great Scale maintains a family of fifteen
Speaker 1: different investment products, and that's really been built out in
Speaker 1: response to rising investor demand for access to either other
Speaker 1: digital assets or even certain subsets or themes within the
Speaker 1: digital currency universe. So back to the idea of regulatory
Speaker 1: approval for bitcoin e t F. So what's a realist
Speaker 1: I know you don't want to make a prediction as
Speaker 1: far as the timeline goes, but what's a realistic way
Speaker 1: for investors to think about the actually getting exposure to
Speaker 1: bitcoin in any t F? Is it months as eight years? Well,
Speaker 1: I'd focus less on timelines and focus more on the opportunity.
Speaker 1: I think that certainly products like g BTC and their
Speaker 1: success and liquidity and how widely traded and utilized they are,
Speaker 1: is really the empirical data that investors need to recognize
Speaker 1: that today investors are accessing bitcoin every single day through
Speaker 1: products like g BTC, and they're in fact not waiting
Speaker 1: for an EPF to come along, which certainly begs the question, well,
Speaker 1: then why do you guys even care about an e
Speaker 1: t S And the answer is that we do believe
Speaker 1: in et F will broaden us as to a wider
Speaker 1: audience of investors, and ECPs have been a very popular
Speaker 1: way for investors to access all kinds of investment opportunities.
Speaker 1: So um, moral of the story is investors certainly aren't waiting,
Speaker 1: but we also know in e t F will brought
Speaker 1: in access even further. And Michael, what kind of flows
Speaker 1: are you you seeing right now, notably versus six months
Speaker 1: ago versus a year ago. Well, I think flows continue
Speaker 1: to be really robust. Um. When we look at the
Speaker 1: ways in which investors have been wanting to deploy capital,
Speaker 1: they again really do often look at these pullbacks and
Speaker 1: prices at as opportunistic time to add to their positions.
Speaker 1: I'd say we're also seeing an increased appetite amongst our
Speaker 1: investors to diversify that they don't want to just have
Speaker 1: bitcoin or just have a theorium exposure, but they're now
Speaker 1: looking at other areas to have exposure to things like
Speaker 1: you know, Defy we just launched the Great Scale D
Speaker 1: five fund, or looking at you know, protocols like file
Speaker 1: a coin and others that are really showing the other
Speaker 1: use cases for digital assets. Just in the fifteen seconds
Speaker 1: we have left. What are you thinking in terms of
Speaker 1: product pipeline, Well, I'll tell you that we're not done
Speaker 1: the fifteen products gray Scale has today or all products
Speaker 1: we're proud of and are excited to bring to our
Speaker 1: investors um but certainly as market growth, our product lineup
Speaker 1: will grow with it. Well, there you have at Michael Sonensheine,
Speaker 1: chief executive Officer at Gray Scale, joining us on the
Speaker 1: phone from New York City. Thanks for listening to Bloomberg
Speaker 1: Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg
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