WEBVTT - SEC Bitcoin Hoax, China's AirDrop Hack

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<v Speaker 1>Good morning.

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

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

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<v Speaker 1>Well, some saber rattling from China on Taiwan. We get

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<v Speaker 1>more from Dan Schwartzman in New York.

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<v Speaker 3>Dan Yeah Brian, China's ambassador to the US, Chifeng, says

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<v Speaker 3>the country has no room to compromise when it comes

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<v Speaker 3>to Taiwan's independence. She was speaking at the Carter Center

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<v Speaker 3>in Atlanta. The ambassador's comments come as Taiwan is set

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<v Speaker 3>to vote for president on January thirteenth. One of the candidates,

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<v Speaker 3>Taiwan's Vice President, Lai Ching Tay, has angered Beijing by

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<v Speaker 3>describing himself as quote pragmatic worker for Taiwanese independence. A

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<v Speaker 3>three judge appeals court panel expressed skepticism of Donald Trump's

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<v Speaker 3>claims that he is immune from prosecution as a former

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<v Speaker 3>president looks to avoid a criminal trial over his attempt

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<v Speaker 3>to overturn the twenty twenty election. Trump is trying to

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<v Speaker 3>reverse a December first ruling by US District Judge Tanya Chutkin,

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<v Speaker 3>who rejected Trump's immunity defense, saying it seems he was

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<v Speaker 3>seeking the power of a monarch. Bloomberg's Eric Larsen breaks

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<v Speaker 3>down one judge's hypothetical oppose to Trump attorney John Sarr.

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<v Speaker 4>What if a president ordered the killing of a political

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<v Speaker 4>rival with Seal Team six, you know, does nothing happen

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<v Speaker 4>to this president? And Trump's argument, or that he's lawyer pressed,

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<v Speaker 4>is that if the president is impeached for that conduct,

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<v Speaker 4>then potentially that opens up the potential for a criminal case.

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<v Speaker 4>But if there's no impeachment, then you know, nothing happens,

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<v Speaker 4>And the judges seemed pretty skeptical of that argument.

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<v Speaker 3>That's Bloomberg's Eric Larson. Walter Reed Medical Center has released

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<v Speaker 3>a statement saying that Defense Secretary Lloyd Austin was diagnosed

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<v Speaker 3>with prostate cancer in early December. Austin underwent a minimally

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<v Speaker 3>invasive surgical procedure which resulted in some complications, including nause

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<v Speaker 3>and severe pain in his abnominal area as well as

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<v Speaker 3>in his hip and leg, and the evaluation revealed that

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<v Speaker 3>Austin was suffering from a urinary tract infection as well

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<v Speaker 3>as abdominal fluids collecting, which impaired the small intestine's ability

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<v Speaker 3>to function. The hospital those says they anticipate the Secretary

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<v Speaker 3>will make a full recovery. National Security ca Ouncil spokesman

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<v Speaker 3>John Kirby says even President Biden didn't know why Austin

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<v Speaker 3>was hospitalized till earlier today.

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<v Speaker 5>He was not informed until last Friday that Secretary of

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<v Speaker 5>Austin was in the hospital. He was not informed until

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<v Speaker 5>this morning.

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<v Speaker 1>That the root cause of that hospitalization was prostate cancer.

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<v Speaker 3>Kirby, speaking at a briefing earlier today. Storms, high winds

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<v Speaker 3>and tornado warnings hitting parts of the South today, with

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<v Speaker 3>roofs blown off homes and campers flipped over in Florida.

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<v Speaker 3>In the Midwest, some cities were hit with more than

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<v Speaker 3>a foot of snow, stranding some drivers on highways. Areas

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<v Speaker 3>across Kansas, Nebraska and South Dakota, Iowa, and Minnesota seeing

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<v Speaker 3>snow accumulations as high as fifteen inches. More than two

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<v Speaker 3>hundred thousand customers were without power in Alabama, Georgia and

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<v Speaker 3>in Florida. That's according to Thepowerodage dot US website. Global

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<v Speaker 3>News twenty four hours a day and whenever you want

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<v Speaker 3>it with Bloomberg News.

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<v Speaker 6>Now.

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<v Speaker 3>I'm Dan Schwartzman, and this is.

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<v Speaker 1>Bloomberg all right, Thanks very much, Dan five and a

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<v Speaker 1>half minutes asked the hour, This is Bloomberg Daybreak Asia.

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<v Speaker 1>We take a look now at some of the top

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<v Speaker 1>business stories of the hour.

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<v Speaker 3>While the US.

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<v Speaker 1>Securities and Exchange Commission says it has not granted approval

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<v Speaker 1>of Spot Bitcoin exchange traded funds, that's despite a post

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<v Speaker 1>saying it had been approved on X that appeared to

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<v Speaker 1>be from the regulator's official account. The post included a

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<v Speaker 1>comment purporting to be from SEC chair Gary Gensler. Gensler

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<v Speaker 1>himself said on X that the SEC's account had been compromised.

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<v Speaker 1>About a dozen companies have applied to list ETFs backed

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<v Speaker 1>by bitcoin in the United States, and the SEC has

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<v Speaker 1>until January tenth to take action on at least one

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<v Speaker 1>of those applications. Now Bloomberg Shanali Bossack tells us what

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<v Speaker 1>comes next for the SEC.

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<v Speaker 4>They could always punt right. They could always push it

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<v Speaker 4>as they have before.

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<v Speaker 5>They could also deny application.

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<v Speaker 4>They could ask for more information as we've seen last

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<v Speaker 4>minute amendments to the filings just this morning.

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<v Speaker 1>That's Shanali boss Suk. The price of bitcoin did spike, well,

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<v Speaker 1>it did increase, let's say, and it's still a little

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<v Speaker 1>bit higher now. Right now forty six eighty three per coin.

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<v Speaker 2>We turn next to the latest on the Boeing seven

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<v Speaker 2>thirty seven Max Air safety officials are probing last week's

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<v Speaker 2>blowout of a door plug on a Max nine model,

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<v Speaker 2>and now their attention is focused squarely on four unaccounted bolts.

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<v Speaker 2>These bolts, you see, were meant to secure the door

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<v Speaker 2>plug it suddenly broke loose on that Alaska Airlines flight

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<v Speaker 2>last Friday. Inspections were subsequently ordered by the FAA, and

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<v Speaker 2>now we learn that both Alaska Air and United Airlines

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<v Speaker 2>have discovered more loose bolts. The National Transportation Safety Board

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<v Speaker 2>said it would consider broadening the probe into other Max models. Now,

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<v Speaker 2>despite the news on this crisis, it's interesting that Boeing

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<v Speaker 2>ended all of last year twenty twenty three with its

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<v Speaker 2>largest ever monthly sales gain for the seven thirty seven Max.

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<v Speaker 1>Ran Well Blackrock, we'll dismiss about six hundred employees, roughly

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<v Speaker 1>three percent of its global workforce. It comes as the

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<v Speaker 1>company seeks to reallocate resources. We get more from Bloomberg's Charlie.

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<v Speaker 6>Pellett, CEO Larry Fink, and President Bob Kapito said in

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<v Speaker 6>a memo to staff quote, we see our industry changing

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<v Speaker 6>faster than at any time since the founding of Blackrock.

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<v Speaker 6>The executive say ETFs have become the preferred vehicle for

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<v Speaker 6>both index and active investment strategies, that the firm is

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<v Speaker 6>growing across the globe, including in Europe and Asia. The

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<v Speaker 6>world's largest asset manager says it still expects to have

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<v Speaker 6>a larger staff by the end of the year, even

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<v Speaker 6>with the cuts, as it expands certain parts of the business.

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<v Speaker 6>In New York, Charlie Pellett Bloomberg Radio, we.

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<v Speaker 2>Are told Amazon's live streaming site Twitch is poised to

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<v Speaker 2>cut thirty five percent of its staff. That would equate

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<v Speaker 2>to around five hundred workers. These cuts could be announced,

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<v Speaker 2>we are told as soon as Wednesday. We are hearing

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<v Speaker 2>there are increased concern over the company's turning a profit

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<v Speaker 2>since Twitch has increased its focus on advertising in recent years.

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<v Speaker 1>Right well, Qualcomm says that it's pushed into automotive chips

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<v Speaker 1>is on course to beat sales projections. A chip maker

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<v Speaker 1>said that it will have about four billion dollars of

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<v Speaker 1>sales from its auto unit by twenty twenty six. Qualcom's

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<v Speaker 1>entrance into the automotive space will also decrease its reliance

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<v Speaker 1>on mobile phone electronics, and the CEO, Cristiano Amone, told

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<v Speaker 1>us that the car industry is going digital. So if

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<v Speaker 1>you're going to go buy a car today, you have

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<v Speaker 1>a fully immersive digital clck bit.

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<v Speaker 5>You didn't have that before. That's enabled by Snapdragon. Right

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<v Speaker 5>now you have those beautiful screens that are immersiving.

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<v Speaker 1>They bring you a lot of information about the car,

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<v Speaker 1>the road.

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<v Speaker 3>On top of that, it have safety and we have

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<v Speaker 3>a vision that assisted driving needs to be in every car.

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<v Speaker 1>That's Qualcom CEO Cristiano Amone, speaking from the Consumer Electronics

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<v Speaker 1>Show in Las Vegas. Qualcom is now selling more chips

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<v Speaker 1>for handling, driving, and entertainment functions in vehicles, along with

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<v Speaker 1>processors for personal computers and headsets. The hope is to

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<v Speaker 1>maintain growth as the smartphone market matures.

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<v Speaker 2>China says it has hacked into Apple's air dropped feature

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<v Speaker 2>and as a result, message centers can be identified. We

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<v Speaker 2>have more from Bloomberg zivon men in Hong Kong.

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<v Speaker 7>A Beijing institute has developed a technique to crack an

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<v Speaker 7>iPhone's encrypted device log. The log identifies numbers and emails

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<v Speaker 7>of senders who share air drop content. The method would

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<v Speaker 7>help authorities eradicate information China deems unhealthy. Activists around the

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<v Speaker 7>world have employed the air drop feature to spread their

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<v Speaker 7>messages Beijing's judicial bureaus as police have identified multiple people

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<v Speaker 7>via the hack. Developments add uncertainty to Apple's operations in China.

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<v Speaker 7>The company already faces severe constraints on content, including on

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<v Speaker 7>Apple TV and books. In Hong Kong, I'm Von Mann

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<v Speaker 7>Bloomberg Radio.

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<v Speaker 1>This is Bloomberg Daybreak Asia. I'm Brian Curtisy in Hong

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<v Speaker 1>Kong with Paul Allen in Sydney, and our guest is

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<v Speaker 1>Eric balchunis Bloomberg Intelligence senior ETF analyst. To take a

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<v Speaker 1>closer look at what happened today from the SEC. I

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<v Speaker 1>don't want to be splitting hairs with something, but we

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<v Speaker 1>said in our lead that the SEC has not yet

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<v Speaker 1>approved blah blah blah, And actually Gary Gensler said in

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<v Speaker 1>his statement that the SEC has not approved. So again,

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<v Speaker 1>that might be getting a little bit too technical there,

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<v Speaker 1>but many people think it will happen. Was this possibly something, Eric,

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<v Speaker 1>that was just a prepared statement that somehow made its

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<v Speaker 1>way in.

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<v Speaker 5>Yeah, Look, I'm processing this all just like you, I

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<v Speaker 5>was expecting a tweet like this to come out exactly

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<v Speaker 5>twenty four hours from when it did. We all intel

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<v Speaker 5>points to approval four to five pm Eastern time tomorrow,

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<v Speaker 5>with both the nineteen befour's in the s ones getting

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<v Speaker 5>approved and then issuers launching Thursday business day, and they'd

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<v Speaker 5>be up in trading. So I was sort of ready

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<v Speaker 5>they just go have dinner and have a chill night

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<v Speaker 5>before tomorrow's madness. But the madness came early, and it

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<v Speaker 5>sounds like it was hacked, but the timing was weird.

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<v Speaker 5>It almost seems like a scheduled tweet that they put

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<v Speaker 5>the wrong dat in. But let's just trust the SEC

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<v Speaker 5>it was hacked. This isn't the first time there's been Well, you.

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<v Speaker 1>Said compromised, right, Compromise is a little bit broader term.

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<v Speaker 5>Yeah, that's true. That's true. Look, who knows. I mean,

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<v Speaker 5>at some point we'll get the truth over time. You

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<v Speaker 5>notice when people put out tweets sometimes they always say

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<v Speaker 5>hacked and or compromised, But you know, half the time

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<v Speaker 5>they weren't. They're just embarrassed. Who knows. All I know

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<v Speaker 5>is that tomorrow is important because it's the deadline for

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<v Speaker 5>the ARC filing. They have to either approve or deny,

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<v Speaker 5>so if they do nothing, it gets approved. But all

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<v Speaker 5>signs and all our intel points to approval. So my

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<v Speaker 5>guess is we'll see this tweet or something come out

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<v Speaker 5>tomorrow after they formally approve doing the more formal way

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<v Speaker 5>on the website. But I've been covering this now. I've

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<v Speaker 5>been in a sort of one foot in the crypto

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<v Speaker 5>world for like six months now, and I've gotten used

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<v Speaker 5>to these crazy happenings and shenanigans, so this is just

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<v Speaker 5>like sort of another day in the roller coaster known

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<v Speaker 5>as the crypto world. So I shake it off. I'm

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<v Speaker 5>looking at tomorrow. I still think we're going to see

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<v Speaker 5>approval and launches and we'll look back and sort of

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<v Speaker 5>laugh at this in a couple of days.

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<v Speaker 8>Yeah, to your point, Eric, when this happened, I overheard

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<v Speaker 8>somebody in the office here in Sydney sort of laugh

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<v Speaker 8>and say this is the most bitcoin thing ever. The

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<v Speaker 8>language though, was very sec like. And as you say,

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<v Speaker 8>this isn't the first head fake, is it. What other

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<v Speaker 8>sort of misleading moments have we experienced?

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<v Speaker 2>Oh?

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<v Speaker 5>Man, I mean the big one was coin Telegraph put

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<v Speaker 5>out that I shares had been approved like I don't

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<v Speaker 5>know two months ago, and the price of bitcoin went

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<v Speaker 5>up five to ten percent instantly, and then black Rock

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<v Speaker 5>denied it. Then somebody went into the Delaware legal site

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<v Speaker 5>for registering names and registered eye shares XRP ETF and

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<v Speaker 5>even put the guy's name, and it looked just like

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<v Speaker 5>a registration like the way they registered bitcoin and ether ETFs.

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<v Speaker 5>So people thought, oh, Black Rocks playing a file for

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<v Speaker 5>an XRP ETF that turned out to be false. The

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<v Speaker 5>price of XRP went up and down instantly, and so

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<v Speaker 5>this is I know, the SEC isn't up to that

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<v Speaker 5>kind of shenanigans. For sure. The coin Telegraph was an

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<v Speaker 5>intern who messed up. Maybe this is that case. So

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<v Speaker 5>there's definitely been these head fakes. And then recently there's

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<v Speaker 5>been people over the past couple days who have gone

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<v Speaker 5>against the grain and said, wait, you know, Gary's going

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<v Speaker 5>to do a rug pull and deny them all, and

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<v Speaker 5>that kind of moved the price a little on the downside.

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<v Speaker 5>So people are able to move because everybody's skittish. This

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<v Speaker 5>has been a ten year build up to this one moment,

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<v Speaker 5>and everyone's just like it's like a you can pop this.

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<v Speaker 5>It's like a feeling, the mood you can pop with

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<v Speaker 5>of a pin, and that's sort of what this did.

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<v Speaker 5>And it's all just sensitive and tender right now.

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<v Speaker 1>We talked about this a little bit earlier with what

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<v Speaker 1>you know about X. Will they be able to find

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<v Speaker 1>out who generated this? So that's one thing. And secondly,

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<v Speaker 1>you know, it seems the price spike in bitcoin wasn't

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<v Speaker 1>that much, so is this pretty much fully discount approval?

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<v Speaker 5>Yeah, hopefully they find out. I don't know the goings

0:12:27.240 --> 0:12:30.679
<v Speaker 5>on of cybersecurity, but I hope they find out. If

0:12:30.679 --> 0:12:33.280
<v Speaker 5>it's them, I hope they admit it. That's will they

0:12:33.280 --> 0:12:36.200
<v Speaker 5>admit it? If the call was coming from inside the house,

0:12:36.200 --> 0:12:37.760
<v Speaker 5>so to speak, will they admit that? I don't know.

0:12:38.040 --> 0:12:41.720
<v Speaker 5>Hopefully they do. But it is baked into a degree.

0:12:41.920 --> 0:12:43.360
<v Speaker 5>There's been a huge run up in the price of

0:12:43.400 --> 0:12:46.160
<v Speaker 5>bitcoin and it doesn't take a genius to realize because

0:12:46.440 --> 0:12:50.080
<v Speaker 5>people are anticipating the ETFs getting approved. Because the ETFs

0:12:50.160 --> 0:12:53.040
<v Speaker 5>act as bridges to a large amount of money that

0:12:53.080 --> 0:12:57.079
<v Speaker 5>advisors manage thirty trillion, they love ETF so the ETF

0:12:57.320 --> 0:12:59.640
<v Speaker 5>is sort of the ultimate bridge to the sort of

0:13:00.000 --> 0:13:03.400
<v Speaker 5>traditional finance regular world and a big pool of capital

0:13:03.440 --> 0:13:06.840
<v Speaker 5>of rich boomers and the crypto world. And so that's

0:13:06.840 --> 0:13:08.600
<v Speaker 5>why the run up and prices come, and that's why

0:13:08.600 --> 0:13:11.320
<v Speaker 5>it didn't move that much to the upside. We were thinking,

0:13:11.360 --> 0:13:13.520
<v Speaker 5>you know, I was talking to another lawyer that if

0:13:13.559 --> 0:13:17.120
<v Speaker 5>you really wanted to cause a mass chaos and compromise

0:13:17.200 --> 0:13:19.480
<v Speaker 5>the SEC site, you would have said they were rejecting it.

0:13:20.120 --> 0:13:22.360
<v Speaker 5>The price of bitcoin probably would have plummeted a good

0:13:22.360 --> 0:13:27.240
<v Speaker 5>amount on that because the approval baked in rejection.

0:13:27.440 --> 0:13:27.920
<v Speaker 1>Not so.

0:13:28.120 --> 0:13:30.559
<v Speaker 5>I think that's also an interesting point on like, what

0:13:31.000 --> 0:13:34.040
<v Speaker 5>was the purpose of hacking that to just do nothing?

0:13:35.160 --> 0:13:37.079
<v Speaker 8>Eric, I just want to tease out a little more

0:13:37.080 --> 0:13:39.120
<v Speaker 8>of this idea of a bridge. I mean, to the

0:13:39.200 --> 0:13:41.360
<v Speaker 8>light person, why would you buy a bitcoin eighty if

0:13:41.480 --> 0:13:42.680
<v Speaker 8>when you can just buy a bitcoin?

0:13:43.760 --> 0:13:46.000
<v Speaker 5>Yeah, because if you look at coinbase, if you want

0:13:46.040 --> 0:13:49.720
<v Speaker 5>to go trade bitcoin, it's pretty expensive upwards a forty

0:13:49.720 --> 0:13:52.040
<v Speaker 5>basis points to two hundred and fifty basis points just

0:13:52.080 --> 0:13:54.960
<v Speaker 5>for one trade. An ETF will cost one basis point

0:13:55.000 --> 0:13:57.680
<v Speaker 5>to trade. That's the spread on ets, and the expense

0:13:57.800 --> 0:13:59.760
<v Speaker 5>ratios are now all the way down to twenty basis

0:13:59.760 --> 0:14:02.880
<v Speaker 5>points twenty to thirty. You can get already, haven't you launched?

0:14:02.880 --> 0:14:04.480
<v Speaker 5>And the sea war has already gotten them down that low.

0:14:05.040 --> 0:14:06.839
<v Speaker 5>So that's a pretty good deal. Plus you got this

0:14:06.880 --> 0:14:08.679
<v Speaker 5>sort of regulatory stamp on it. You've got big brand

0:14:08.760 --> 0:14:11.160
<v Speaker 5>names like black Rock, compatility, and it's going to track

0:14:11.200 --> 0:14:14.120
<v Speaker 5>the price of bitcoin well. Other things like GBTC doesn't

0:14:14.160 --> 0:14:17.120
<v Speaker 5>track well. Micro Strategy stock you could say, is a proxy,

0:14:17.160 --> 0:14:19.680
<v Speaker 5>but it's not a perfect tracker of bitcoin either. And

0:14:19.800 --> 0:14:21.360
<v Speaker 5>if you want to go do like your own cold

0:14:21.400 --> 0:14:23.920
<v Speaker 5>storage and wallet and all that business, you have to

0:14:23.920 --> 0:14:26.560
<v Speaker 5>remember twelve words for the rest of your natural life.

0:14:27.120 --> 0:14:28.840
<v Speaker 5>And I know, I don't know about you, but I

0:14:28.880 --> 0:14:32.560
<v Speaker 5>can't remember my Amazon passwords, so I'm not gonna go

0:14:32.600 --> 0:14:34.680
<v Speaker 5>try to do that. And just like a gold investor

0:14:34.760 --> 0:14:37.320
<v Speaker 5>isn't going to store gold in their house unless you're

0:14:37.360 --> 0:14:40.480
<v Speaker 5>really into this, in which case do that, you know.

0:14:40.720 --> 0:14:43.800
<v Speaker 5>But for most normal people who just want some exposure

0:14:44.000 --> 0:14:47.320
<v Speaker 5>because they're speculating on this, and ETF is a perfect

0:14:47.320 --> 0:14:50.720
<v Speaker 5>solution for them, and again gold probably the best parallel that.

0:14:50.720 --> 0:14:52.600
<v Speaker 1>That's what I would say, all right, Derek, thanks very

0:14:52.680 --> 0:14:56.600
<v Speaker 1>much for joining us. Eric balchunis Bloomberg Intelligence Senior ETF analyst.

0:14:58.520 --> 0:15:01.280
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