WEBVTT - SEC Approves Bitcoin ETFs, Huawei To Limit Lobbying in US

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<v Speaker 1>Good morning.

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<v Speaker 2>I'm Brian Curtis and I'm Doug Chrisner. Here are the

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<v Speaker 2>stories we're following today.

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<v Speaker 3>The Securities and Exchange Commission approved exchange traded funds that

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<v Speaker 3>invest directly in bitcoin. The agency authorized eleven funds to

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<v Speaker 3>begin trading on Thursday now. The approvals also mark a

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<v Speaker 3>rare capitulation by the SEC following opposition that lasted for

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<v Speaker 3>more than a decade.

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<v Speaker 1>We've got reaction from RC CEO Kathy Wood.

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<v Speaker 4>We think that longer term, which is our focus of course,

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<v Speaker 4>you know, with institutions really getting the green light now

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<v Speaker 4>with an SEC approval, we think that even going to

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<v Speaker 4>zero point one or zero point five percent of a

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<v Speaker 4>portfolio for institutions is going to be a price moving event.

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<v Speaker 3>And that's CEO Kathy Wood. The decision today comes one

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<v Speaker 3>day after a false post on the SEC's X account

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<v Speaker 3>claimed that the agency had already approved the ETFs. The

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<v Speaker 3>regulators subsequently said the account had been compromised, causing the

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<v Speaker 3>price of bitcoin too fluctuate wildly, and the SEC said

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<v Speaker 3>the FBI is investigating that breach. At the moment, bitcoin

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<v Speaker 3>is trading up over forty seven thousand, so a three

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<v Speaker 3>percent move here in the wake of the approval, forty

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<v Speaker 3>seven thousand, three hundred and sixteen.

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<v Speaker 2>Well Alaska Air Group is grounding all flights of its

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<v Speaker 2>Boeing seven thirty seven Max nine aircraft over the next

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<v Speaker 2>three days, and this decision means between one hundred and

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<v Speaker 2>ten to one hundred and fifty daily flights will be canceled.

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<v Speaker 2>You'll remember last Friday that an Alaskan air seven thirty

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<v Speaker 2>seven Max nine lost part of its fuselage shortly after takeoff.

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<v Speaker 2>Now that move to suspend the flights will now give

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<v Speaker 2>USAFE to regulators time to inspect all aircraft and prepare

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<v Speaker 2>them for a return to service once standards have been issued. Meantime,

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<v Speaker 2>today the head of Boeing, that is CEO David Calhoun.

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<v Speaker 2>He was on CNBC saying the company is worked looking

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<v Speaker 2>to prevent future accidents.

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<v Speaker 5>Now we're in a moment where we have nobody at risk,

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<v Speaker 5>and our job is to understand literally everything that has happened,

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<v Speaker 5>everything that surrounds that particular fuselage, plug and fix it

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<v Speaker 5>and make sure it can never happen again.

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<v Speaker 2>David Calhoun, the CEO of Boeing. Boeing shares finished up

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<v Speaker 2>nearly one percent in New York Trading meantime shares in

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<v Speaker 2>Alaska Air We're down nearly one percent today, right, you.

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<v Speaker 1>Know, Doug, This story has case study all over at

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<v Speaker 1>a place like Harvard Business School. It'll be really interesting

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<v Speaker 1>to see how that works out. Well.

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<v Speaker 3>Amazon is laying off hundreds of workers at its Prime

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<v Speaker 3>Video and Studios business. Bloombergs Matt Day says he's not

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<v Speaker 3>surprised given the state of the industry.

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<v Speaker 6>Just a ton of pain right now in the streaming services,

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<v Speaker 6>and folks kind of reassessing, you know, how many bodies

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<v Speaker 6>are going to need for the demand for just the

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<v Speaker 6>ton of streamingable content out there. Amazon's studio's boss, Mike

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<v Speaker 6>Hopkins mentioned they like discontinue some things over the course

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<v Speaker 6>these if they didn't specify what exactly those were, but

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<v Speaker 6>really just the latest in what looks like cuts you know,

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<v Speaker 6>all over the place at Amazon that they petered out.

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<v Speaker 6>It's not, you know, tens of thousands of people the

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<v Speaker 6>way it was a year ago, but it seems to

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<v Speaker 6>be ongoing.

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<v Speaker 3>That's Bloomberg's Matt Day reporting. We also reported on Tuesday

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<v Speaker 3>that the company's Twitch live streaming service was preparing to

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<v Speaker 3>announce cuts to about thirty five percent of its staff.

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<v Speaker 3>That equates to about five hundred workers. Shares of Amazon

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<v Speaker 3>closed up one point six percent.

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<v Speaker 2>New York Fed President John Williams was saying today monetary

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<v Speaker 2>policy is now tight enough to guide inflation back to

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<v Speaker 2>the Fed's target, that being two percent. Even so, mister

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<v Speaker 2>Williams suggested the Fed does need to see a little

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<v Speaker 2>bit more in the way of evidence of cooling inflation

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<v Speaker 2>before cutting infrast rates.

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<v Speaker 7>I'll expect that we will need to maintain a restricted

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<v Speaker 7>stance of policy for some time to folly achieve our goals,

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<v Speaker 7>and it will only be appropriate to dial back the

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<v Speaker 7>degree of policy restraint when we're confident that inflation is

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<v Speaker 7>moving towards toward two percent on a sustained base.

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<v Speaker 2>See is John Williams the head of the New York

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<v Speaker 2>Fed now Tomorrow A key piece of economic news eight

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<v Speaker 2>thirty am. Wall Street time is when we get the

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<v Speaker 2>December reading on consumer prices. Brian Well.

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<v Speaker 3>The Bank of Korea is likely to stand pad on

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<v Speaker 3>interest rates today. Bloomberg's Bonnie Au has more.

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<v Speaker 8>The BOK will probably push back against any expectations that

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<v Speaker 8>might join the FED in signaling a pivot Governor Chiang

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<v Speaker 8>Yong has won against prematurely relaxing the fight against inflation.

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<v Speaker 8>All twelve economists surveyed by Bloomberg expect the Biok to

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<v Speaker 8>keep its benchmark rate at three point five percent. If

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<v Speaker 8>the Bok holds, it will mark a full year that

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<v Speaker 8>authorities have kept the RDS steady. Economists expect only about

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<v Speaker 8>two cuts by the end of twenty twenty four. In

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<v Speaker 8>Hong Kong, I'm Bonnie al Bloomberg Radio.

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<v Speaker 2>Quawai Technologies has wound down its in house lobbying operations

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<v Speaker 2>in the US. That story from Bloomberg's Joan Wong in

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<v Speaker 2>Hong Kong.

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<v Speaker 9>While is last two registered lobbyists left in recent months.

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<v Speaker 9>The lobbyist's recent departures follow an exodus of staff from

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<v Speaker 9>Huawei's US operations that marks a quiet and to Huawei's

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<v Speaker 9>costly decade long effort to maintain a presence in the

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<v Speaker 9>North American market. Federal filing showed the company had spent

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<v Speaker 9>more than thirteen million dollars lobbying in the past ten years.

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<v Speaker 9>The firm reached its peak by supplying small mobile forms

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<v Speaker 9>across the US even as major carriers shun did but

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<v Speaker 9>rising tensions with Beijing. Eventually all but banded in Hong

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<v Speaker 9>Kong joined Wang Bloomberg Radio.

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<v Speaker 3>Meantime, China's credit market looks to be improving. We had

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<v Speaker 3>a couple of property developers yesterday and also a large

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<v Speaker 3>car dealer announced that they would make payments on maturing debt.

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<v Speaker 3>One was China Wang Ka, the other one was long

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<v Speaker 3>Fore Group, and they said that they would they would

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<v Speaker 3>make these payments in the course of the next month

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<v Speaker 3>or so. And also China Grand Automotive pledged to pay

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<v Speaker 3>a dollar note that matures sometime this month. So that

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<v Speaker 3>scene is good news and we'll offer a bit of

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<v Speaker 3>relief to investors. Now it's time for global news. Well,

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<v Speaker 3>another candidate buying for the Republican nomination for president has

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<v Speaker 3>dropped out.

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<v Speaker 1>Dan Schwarzman with that story in New York.

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<v Speaker 10>Dan Hey, Brian As, Nikki Heley, and Rod DeSantis gets

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<v Speaker 10>set to debate tonight in des Moines, Iowa. Former New

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<v Speaker 10>Jersey Governor Chris Christy announces he is dropping out of

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<v Speaker 10>the Republican presidential primary race. Christy had faced increased pressure

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<v Speaker 10>in recent days to drop out to help boost Haley

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<v Speaker 10>in New Hampshire, where she has focused her campaign resources.

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<v Speaker 10>The former governor was a long shot to win, leaving

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<v Speaker 10>the race with under four percent.

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<v Speaker 1>Of support in the polls.

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<v Speaker 10>Christy had at one time been a Trump ally, leading

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<v Speaker 10>the former president's transition team, but he had fallen out

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<v Speaker 10>with Trump. Back in twenty twenty, Christy had strong words

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<v Speaker 10>regarding Trump.

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<v Speaker 11>No one would tell the truth about his divisiveness. Is

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<v Speaker 11>stoking of anger for his own benefit in putting himself

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<v Speaker 11>before the people of this country.

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<v Speaker 10>Christy was speaking at a town hall in New Hampshire.

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<v Speaker 10>Donald Trump has been blocked for making a statement during

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<v Speaker 10>closing arguments in his three hundred and seventy million dollars

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<v Speaker 10>A civil trial judge overseeing the case, Arthur Angerin, told

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<v Speaker 10>Trump's legal team he won't be allowed to speak, citing

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<v Speaker 10>the former president's refusal to agree to standard court rules

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<v Speaker 10>about what he can say. Trump is accused of inflating

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<v Speaker 10>the value of his assets on financial documents for more

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<v Speaker 10>than a decade in an effort to get better loan terms.

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<v Speaker 10>Trump's lawyers and the judge have repeatedly clashed during the

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<v Speaker 10>almost eleven week trial, as Trump's team has frequently accused

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<v Speaker 10>the judge of bias against their clients. The USN allies

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<v Speaker 10>weighing options to retaliate against Iranian back the m Andy

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<v Speaker 10>based Hoothy rebels, who continue to attack commercial vessels transitting

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<v Speaker 10>through the Red Sea. The militants launched their largest drone

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<v Speaker 10>and missile attacks on ships earlier today, with US and

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<v Speaker 10>British warships and planes shooting down eighteen drones in three

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<v Speaker 10>anti ship missiles. So far, the US and its coaliship

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<v Speaker 10>partners have failed to slow the attacks, leading to shipping

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<v Speaker 10>companies refusing to send vessels through the area. California Governor

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<v Speaker 10>Gavin Newsom has proposed spending cuts during the next fiscal

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<v Speaker 10>year to tackle a thirty seven point nine billion dollar

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<v Speaker 10>deficit due to inflation and lower tax revenue from wealthy earners.

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<v Speaker 10>The gap is actually much smaller than was originally projected

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<v Speaker 10>by the state's nonpartisan Legislative Analyst's Office, which back in

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<v Speaker 10>December peg the deficit at around sixty eight billion. Newsom's

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<v Speaker 10>plan to close the deficit include drawing thirteen point one

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<v Speaker 10>billion dollars from the state's reserves, as well as cutting

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<v Speaker 10>eight point five billion from areas such as climate change initiatives, housing,

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<v Speaker 10>and scholarship programs while also freeze in spending across government agencies.

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<v Speaker 10>Jaw dropping news coming out of sports album Ahead. Football

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<v Speaker 10>coach Nick Saban will be retiring seventeen years, six national

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<v Speaker 10>titles and after that first year, sixteen straight seasons of

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<v Speaker 10>ten or more wins per season, Considered by many the

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<v Speaker 10>greatest coach in the history of college football. Global news

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<v Speaker 10>twenty four hours a day and whenever you want it

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<v Speaker 10>with Bloomberg News.

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<v Speaker 11>Now.

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<v Speaker 10>I'm Dan Schwartzman, and this is Bloomberg.

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<v Speaker 1>Well, this is Bloomberg day Break.

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<v Speaker 3>Asian Paul Allen joins us now from Sydney, and our

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<v Speaker 3>guest is Douglas Borthwick, CEO at Blue Canary Capital, to

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<v Speaker 3>take a closer.

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<v Speaker 1>Look at these Bitcoin ETF approvals.

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<v Speaker 3>So, Douglas, you've probably heard me say this, but I

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<v Speaker 3>want to get your view on it. Do you actually

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<v Speaker 3>see this as capitulation by the SEC or is it

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<v Speaker 3>just the result of a lengthy regulatory process?

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<v Speaker 12>Well, I think it's a bit of both. I mean,

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<v Speaker 12>let's be honest, Gary Gensler had to be pulled over

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<v Speaker 12>this finish line. And he didn't get pulled over by

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<v Speaker 12>the market. He got pulled over, really by a lawsuit

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<v Speaker 12>that was filed by Greyscale, but they didn't want to

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<v Speaker 12>do it. They was very much against it, but finally

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<v Speaker 12>capitulated today and actually voted for it along with Hester Pierce.

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<v Speaker 12>So I think that it's something that they were kicking

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<v Speaker 12>and screaming, but they ran out of excuses for why

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<v Speaker 12>they couldn't do it, because the SEC's job isn't to

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<v Speaker 12>decide what people can invest in, rather is to make

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<v Speaker 12>sure people invest in something that they're protected, and I

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<v Speaker 12>think that they ran out of excuses.

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<v Speaker 13>Yeah, the SEC was pretty clear though that, you know,

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<v Speaker 13>while it's okay with these ETFs, it doesn't endorse bitcoin.

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<v Speaker 13>We're in a situation now, we've got an ETA of

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<v Speaker 13>trading what is an unpredictable ethereal acid are. There's still

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<v Speaker 13>some risks hooked up to this. Does the SEC right

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<v Speaker 13>to be cautious?

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<v Speaker 12>Well, there's risks associated with absolutely every security that exists.

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<v Speaker 12>Right There's there's no company that goes out there. The

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<v Speaker 12>SEC says there's no risk here. There's absolutely two way risk.

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<v Speaker 12>But what this means is is that there's risk, but

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<v Speaker 12>it's well documented in the prospectuses, so people understand what

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<v Speaker 12>they're getting into But now this goes mainstream, and you know,

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<v Speaker 12>you had a quote from Kathy Wood earlier. The reality

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<v Speaker 12>is that as people start adding this as a diversification

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<v Speaker 12>to their portfolio, and who wouldn't given you've seen the

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<v Speaker 12>returns that have happened in bitcoin over the past what

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<v Speaker 12>fifteen years, people are going to get involved and they're

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<v Speaker 12>going to put you a little bit of this in

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<v Speaker 12>their portfolio. And whether it's er point one percent, five percent,

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<v Speaker 12>ten percent, all of this is going to start adding

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<v Speaker 12>up considerably and banks are going to turn around and say,

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<v Speaker 12>you know what, crypto isn't bad, Bitcoin is good because

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<v Speaker 12>banks have now figured out how to make money on

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<v Speaker 12>this asset with their customer base.

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<v Speaker 3>Well, and apparently it wasn't all discounted this approval, because

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<v Speaker 3>you have seen a bounce this morning. Now it's three

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<v Speaker 3>and a quarter percenters so to forty seven four fifty.

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<v Speaker 3>Do you think that this approval process, that this will

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<v Speaker 3>serve as a major milestone for bitcoin and for other

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<v Speaker 3>cryptos as well.

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<v Speaker 11>Well.

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<v Speaker 12>It's a major milestone for bitcoin. I mean, there's a

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<v Speaker 12>lot of crypto out there that's garbage. A theorum I

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<v Speaker 12>think is probably going to be the next etf that

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<v Speaker 12>we're all going to start focusing on. But for bitcoin,

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<v Speaker 12>this is absolutely a milestone. I think it's it's I

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<v Speaker 12>hesitate to say, but a floor in that now you've

0:11:41.600 --> 0:11:43.960
<v Speaker 12>got the ability for people to be able to buy

0:11:44.040 --> 0:11:47.079
<v Speaker 12>bitcoin without all of the hassle of a wallets or

0:11:47.240 --> 0:11:50.000
<v Speaker 12>trying to understand what self custody is and all of

0:11:50.040 --> 0:11:53.320
<v Speaker 12>these different technology terms that no one understands except for

0:11:53.320 --> 0:11:56.560
<v Speaker 12>folks within the crypto industry, and so being able to

0:11:56.600 --> 0:11:59.720
<v Speaker 12>just buy it simply going onto a website, being able

0:11:59.760 --> 0:12:02.000
<v Speaker 12>to buy in your four oh one K in your IRA,

0:12:02.679 --> 0:12:05.960
<v Speaker 12>having your financial advisor being able to allocate this to

0:12:06.000 --> 0:12:09.480
<v Speaker 12>your portfolio changes the game in such a large way.

0:12:09.720 --> 0:12:12.080
<v Speaker 12>And it is a limited asset. There are not that

0:12:12.200 --> 0:12:15.000
<v Speaker 12>many coins left out there. The majority of people that

0:12:15.120 --> 0:12:17.800
<v Speaker 12>hold bitcoin want to hold it for a very long time,

0:12:18.840 --> 0:12:21.760
<v Speaker 12>and so I think that it has a great opportunity

0:12:21.800 --> 0:12:25.719
<v Speaker 12>here for it to really get a lot more well,

0:12:25.800 --> 0:12:28.319
<v Speaker 12>not just a verification of portfolios, but also for people

0:12:28.360 --> 0:12:31.080
<v Speaker 12>to actually start thinking about bitcoin is something that they

0:12:31.120 --> 0:12:32.520
<v Speaker 12>can associate themselves with.

0:12:32.880 --> 0:12:35.440
<v Speaker 13>So when trading gets going, what sort of interest are

0:12:35.480 --> 0:12:39.720
<v Speaker 13>you anticipating from buyers, particularly some of these retail buyers

0:12:39.760 --> 0:12:40.599
<v Speaker 13>that you're talking.

0:12:40.320 --> 0:12:44.400
<v Speaker 12>About, Well, I think the retail buyers, the retail folks

0:12:44.440 --> 0:12:47.000
<v Speaker 12>have already been buying it themselves on a coinbase or

0:12:47.040 --> 0:12:49.760
<v Speaker 12>something like that. It's the institutions that haven't been buying it.

0:12:49.840 --> 0:12:52.120
<v Speaker 12>And I think it's the institutional interest that's going to

0:12:52.160 --> 0:12:55.080
<v Speaker 12>be very, very interesting. And so, you know, you can

0:12:55.120 --> 0:12:58.000
<v Speaker 12>get lots of you know, young guys buying two hundred

0:12:58.040 --> 0:12:59.920
<v Speaker 12>dollars worth, but that doesn't really move the needle.

0:13:00.160 --> 0:13:00.959
<v Speaker 1>Moves the needle is.

0:13:00.880 --> 0:13:04.000
<v Speaker 12>When you buy two billion dollars worth and black Rocks

0:13:04.080 --> 0:13:06.000
<v Speaker 12>been you know, there's been reports that black Rocks as

0:13:06.000 --> 0:13:08.800
<v Speaker 12>are two billion dollars of interest already in their ETF.

0:13:09.320 --> 0:13:12.679
<v Speaker 12>That's a tremendous amount of interest. And that's only one

0:13:12.760 --> 0:13:14.840
<v Speaker 12>of the eleven ETFs that are that are out there,

0:13:15.040 --> 0:13:18.520
<v Speaker 12>and this is only day one. We've got years and

0:13:18.679 --> 0:13:21.079
<v Speaker 12>years of interest of buying interest coming into this.

0:13:21.679 --> 0:13:27.520
<v Speaker 3>So if eleven funds approved, how do they differentiate themselves

0:13:27.520 --> 0:13:28.120
<v Speaker 3>from others?

0:13:28.400 --> 0:13:30.280
<v Speaker 12>Well, I think it's very hard, and I think that

0:13:30.840 --> 0:13:33.200
<v Speaker 12>a lot of them right now are differentiating themselves based

0:13:33.280 --> 0:13:36.360
<v Speaker 12>upon fees. Right, So one's at point four to nine,

0:13:36.400 --> 0:13:39.559
<v Speaker 12>ones at point five percent. Gray scale continues spirit, you know,

0:13:39.679 --> 0:13:43.840
<v Speaker 12>above one percent. I think that so feed differentiation is important,

0:13:43.880 --> 0:13:45.720
<v Speaker 12>but I think a lot of folks generally will just

0:13:45.840 --> 0:13:47.640
<v Speaker 12>deal with what they can deal with or what their

0:13:47.640 --> 0:13:52.640
<v Speaker 12>financial advisor allocates them towards. And so while fees are important,

0:13:52.640 --> 0:13:54.800
<v Speaker 12>there's still these fees are still a lot less than

0:13:54.840 --> 0:13:58.080
<v Speaker 12>if they were buying bitcoin on an exchange or if

0:13:58.080 --> 0:14:01.560
<v Speaker 12>they were buying bitcoin through Great Scale as it was

0:14:01.720 --> 0:14:03.240
<v Speaker 12>previously when it was a trust company.

0:14:04.240 --> 0:14:07.000
<v Speaker 1>So presumably this is bad for Coinbase, right.

0:14:07.160 --> 0:14:09.560
<v Speaker 12>Well, you've got to wonder, you know, I think that

0:14:09.000 --> 0:14:13.720
<v Speaker 12>there if Coinbase has diehard crypt bitcoin fans that want

0:14:13.720 --> 0:14:16.720
<v Speaker 12>to self custody, well that's one thing. But certainly there's

0:14:16.720 --> 0:14:18.600
<v Speaker 12>going to be a lot of retail that maybe wanted

0:14:18.640 --> 0:14:21.760
<v Speaker 12>access to bitcoin on Coinbase and now decide, you know what,

0:14:21.800 --> 0:14:23.760
<v Speaker 12>I'll just do it through an ETF. But that's also

0:14:23.800 --> 0:14:26.440
<v Speaker 12>good news for Coinbase because Coinbase is involved in many

0:14:26.480 --> 0:14:27.800
<v Speaker 12>of the ETFs that are right there.

0:14:28.200 --> 0:14:30.840
<v Speaker 3>Yeah, yeah, it could be that on one side, but

0:14:31.000 --> 0:14:32.200
<v Speaker 3>very good on the other side.

0:14:32.640 --> 0:14:34.120
<v Speaker 1>Douglas, thanks very much for joining us.

0:14:34.160 --> 0:14:38.440
<v Speaker 3>Douglas Borthwick, CEO at Luke Canary Capital. This is Bloomberg

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