Speaker 1: This is Bloomberg Crypto, a daily Bloomberg I Heard podcast,
Speaker 1: and I'm Stacy Marie Ishmael, Managing editor of Crypto for Bloomberg.
Speaker 1: Mus It's Friday, October twenty one. This is episode one
Speaker 1: hundred of the Bloomberg Crypto podcast. When we launched in June,
Speaker 1: bitcoin was trading around thirty dollars salsios in three hours.
Speaker 1: Capital hadn't yet filed for bankruptcy. People knew where Do
Speaker 1: Kwan was, Celebrities cared about n f T s. It
Speaker 1: was a different time. When we launched, we knew what
Speaker 1: we wanted to do. Every day we take a look
Speaker 1: at all things digital assets, the merge, absolutely, algorithmic stable
Speaker 1: coins of course, bitcoin mining, no doubt. And we talked
Speaker 1: to reporters, editors, analysts, investors, industry experts, academics, policymakers, all
Speaker 1: in service of helping you better understand how crypto is
Speaker 1: shaping and being shaped by finance and culture. So for
Speaker 1: this one episode, we're flipping the focus just a little.
Speaker 1: We're gonna spend some time answering your questions and hearing
Speaker 1: from Bloomberg Senior Executive Editor Chris Nigi, a k a.
Speaker 1: My boss the creation of of the Wedger, of the
Speaker 1: blockchain letger seems like probably a kind of immutable part
Speaker 1: of the evolution of people kind. Chris, Welcome to the podcast. Chris.
Speaker 1: You are here not just because you are my boss,
Speaker 1: but that helps, though, but also because part of your
Speaker 1: responsibility here at Bloomberg is understanding better than any of
Speaker 1: us really, like why markets are doing whatever it is
Speaker 1: that they're doing. What has it been like for you
Speaker 1: having to do that for Crypto for the past year
Speaker 1: or so, pretty crazy, I would say, to begin with.
Speaker 1: I mean, it's not like the rest of the world's
Speaker 1: markets have been behaving particularly sanely. Let's just establish that
Speaker 1: at the outset um, this has been as looney h
Speaker 1: two and a half years as I've ever seen. But
Speaker 1: I would say Crypto has just been sort of a
Speaker 1: proxy for the emotions that are driving everything else. It's
Speaker 1: been somewhat of a lesson in whichful thinking, which markets
Speaker 1: frequently are needless to say, But I think the big
Speaker 1: sort of kind of logic artifact of the last eight
Speaker 1: months or whatever it's been has been the upending of
Speaker 1: the big theory around which is that it was would
Speaker 1: work as an inflation hedge. I don't think anyone really
Speaker 1: knew whether that was going to pan out, coming in
Speaker 1: and watching it turn out not to be true, and
Speaker 1: for crypto to be quite pretty much everything else a
Speaker 1: call option on the world's liquidity has been pretty instructive.
Speaker 1: I think we can pretty safely say at this point
Speaker 1: it's not working out as an inflation hedge, and it's uh,
Speaker 1: it's Corroatian to everything else wishful has has been. It's
Speaker 1: it's a big feature, and from the perspective of people
Speaker 1: who don't want it to be correlated, more bug than feature,
Speaker 1: really right, It's like in the absence of having something
Speaker 1: like Bitcoin as an inflation hedge, in the absence of
Speaker 1: having wacky tokens in your portfolio that you should be
Speaker 1: getting like some alpha out of because they don't move
Speaker 1: like anything else. What makes these markets interesting, then, the
Speaker 1: raw psychology of it all, I think is its main attraction.
Speaker 1: It remains hard for me to see exactly what the
Speaker 1: value proposition is here. I think that separate from the
Speaker 1: from the question of whether or not it's a workable
Speaker 1: sort of means of exchange, which I think is a
Speaker 1: much more interesting topic for crypto in general. It's speculative
Speaker 1: meaning has I mean it's always been pure. We just
Speaker 1: that it's been how many people can we get enthusiastic
Speaker 1: about it, just like many other things and beat it
Speaker 1: if we real markets right now like technology, Cromly, Meme stocks,
Speaker 1: but really the rest of the market. There's another aspect
Speaker 1: of it that I find pretty interesting. You know, people
Speaker 1: who have written bitcoin both up and down, and the
Speaker 1: way that it works as sort of again in wishful
Speaker 1: thinking aspect, the people who wrote it up are largely
Speaker 1: the same people who wrote it down. Says so much
Speaker 1: about what investing is. The ability to hang with something
Speaker 1: that rose as much as bitcoin in the sort of
Speaker 1: it's saladays one I am convinced and this is like
Speaker 1: maybe my first rule of investing. It is the exact
Speaker 1: same thing that causes you to hold it all the
Speaker 1: way back to where it is now. Um. I have
Speaker 1: relatives who have done this, who if you said a
Speaker 1: single discouraging thing to them about bitcoined any Thanksgiving is
Speaker 1: where these things typically happen, you would you know, you
Speaker 1: would be basically depending on the specific road punched out
Speaker 1: of the room. And this lesson the fact that the
Speaker 1: same talents to make you a star investor in the
Speaker 1: way up are the ones that kill you on the
Speaker 1: way down. I just think is arguably the most interesting
Speaker 1: sort of immutable fact of markets. You said a couple
Speaker 1: of things there that kind of anticipated some questions that
Speaker 1: we got one of them very directly, right, So, Philip
Speaker 1: Route in do crypto markets reflect the same kind of
Speaker 1: trading psychology as other markets? What I'm hearing from you
Speaker 1: is like, there's definitely a psychology, but it's not the
Speaker 1: one you might necessary only expect. I was talking to
Speaker 1: one of the producers on the show, Sharon earlier, about
Speaker 1: the fact that you know, people buy high and sell
Speaker 1: low in crypto, which is very confusing. But it's that
Speaker 1: same energy that you're describing. Yeah, no, no question. Again,
Speaker 1: it's just as millions of people have said, it's just
Speaker 1: the sort of reinvention of of facts of investing and
Speaker 1: finance that have been been with us forever. Something's hype
Speaker 1: catches on and that's what draws people to it. Again,
Speaker 1: it's particularly pronounced in bitcoin because or crypto in general.
Speaker 1: Because I failed to sort of understand what exactly the
Speaker 1: argument is that should give it sort of speculative value.
Speaker 1: I'm aware of some of the argument some of the
Speaker 1: qualities that made gold into a lasting store of value.
Speaker 1: The fact that it doesn't rust was a big one
Speaker 1: of them. Was by far the closest I ever came
Speaker 1: to understand. And why this stuff should work is a
Speaker 1: long term store value. It's it's immutability, it's finiteness. That
Speaker 1: is something that kind of gives it a kind of
Speaker 1: intrinsic difference from everything else. But still, there's a lot
Speaker 1: of scarce things in the world, and it's been difficult
Speaker 1: for me to quite differentiate Bitcoin from from a lot
Speaker 1: of those that don't have any value, don't fluctuate, go
Speaker 1: up and down like crazy. So again it's just been
Speaker 1: a pure hype machine. It's, uh, you know what else
Speaker 1: can we say? I I it gives me no great
Speaker 1: pleasure to make that case. But that's what happened over
Speaker 1: the last three years with meme stocks, with all these
Speaker 1: things that I feel like people largely knew better about
Speaker 1: and decided to take a punt on anyway, And I
Speaker 1: guess this is what happens. Well. Charlie who asked the
Speaker 1: question why does a crypto like bitcoin have any value? Um,
Speaker 1: the answer is maybe you know, I think it's it
Speaker 1: has value that not to get to sort of either
Speaker 1: heady or existential, but some some days I feel like
Speaker 1: it has value because people decided has value. There's a
Speaker 1: lot about crypto that to me has always behave less
Speaker 1: like a predictable financial assets and more like, as you
Speaker 1: said earlier, a barometer of sentiments than anything else. That's true,
Speaker 1: I mean a lot of the stuff that gets rayed
Speaker 1: around it as UH sort of initial conception, digital unit
Speaker 1: of exchange, a thing for remittances, just blockchain sort of
Speaker 1: database ledger technology. In general, I think it's really subverted
Speaker 1: by the obsession with its UH. It's up and downs
Speaker 1: causes a lot of waste to occur around around the asset.
Speaker 1: It's very difficult to obviously make any of these means
Speaker 1: of exchange systems work with the thing fluctuating like crazy.
Speaker 1: Another thing is that a ton of bad money is
Speaker 1: thrown at bad ideas result of it. I think this
Speaker 1: is a big problem right now. Your your average sort
Speaker 1: of cryptos startup is some number go up, number go
Speaker 1: down thing in essence, and it's diverting money from things
Speaker 1: that actually could work. When thinks, I mean, maybe that's
Speaker 1: how how things like this always work. Undoubtedly, it is
Speaker 1: to some degree that you're going to have a long
Speaker 1: period of wasteful spending that absolutely happened during the Internet bubble,
Speaker 1: and then good things when people not coincidentally, when the
Speaker 1: price finally collapsed and the obsession went away, that's when
Speaker 1: sort of the serious commerce started to be built. Right,
Speaker 1: You are perhaps inadvertently echoing the idea of many adventure
Speaker 1: capitalists right now that this is the time to build right,
Speaker 1: the notion that the speculative accesses are being run out
Speaker 1: of the market, the irresponsible players are having to be
Speaker 1: more responsible ergo, we should see some actual use cases
Speaker 1: arriving sometime imminently. Yeah, and the psycho is not in
Speaker 1: any way different from the way nineties. I feel like
Speaker 1: another big distraction was just the number of Charlotte's involved
Speaker 1: in it. A lot of clear grifters that were sort
Speaker 1: of the face of bitcoin for a long time. It's
Speaker 1: good that they that they get moved out. I mean,
Speaker 1: they're never going away completely, but that doesn't help the case,
Speaker 1: and it makes it very easy to throw mud at it.
Speaker 1: And believe me, I love the throwing of mud at it.
Speaker 1: I think, you know, but all of these distractions were
Speaker 1: not a great thing for the overall prop it's just
Speaker 1: made it so assailable. Coming up, you'll hear more from
Speaker 1: Bloomberg Senior executive editor Chris nag and we'll be answering
Speaker 1: direct questions from our listeners. We'll be right back. It's
Speaker 1: sort of weird when institutional investors or representatives of institutional
Speaker 1: investors are like, I would like more volatility, please, because
Speaker 1: my job is not fun enough. But I'm getting vibe,
Speaker 1: you know, And having been covering this and some of
Speaker 1: the things that we've talked about is that a lot
Speaker 1: of people are in this because they felt like it
Speaker 1: would be fun. And the existence of the Charlottean's, the grifters,
Speaker 1: the bad money being thrown after bad ideas was like
Speaker 1: some sort of acceptable externality as long as there was
Speaker 1: a good time to be had. But now there are
Speaker 1: new policies and everyone is sad, but the grifters are
Speaker 1: still there. I am sure that the untold stories of
Speaker 1: sort of speculative fortunes that were made off this thing
Speaker 1: through that. I mean, you know, f t X is
Speaker 1: reasonably forthright about some of their capers in the in
Speaker 1: the space you can only imagine given heads fun wherewithal
Speaker 1: and the intelligence being poured into the trading side of it,
Speaker 1: the stories that see, the uncovered stories that exist around
Speaker 1: just gigantic fortunes being made. The fact that that may
Speaker 1: have been coming to an end. People are lamenting that. Well,
Speaker 1: you know the welcome again just scuation you had, you
Speaker 1: had a window to get that done. I suspect a
Speaker 1: lot of really smart people did get that done, are
Speaker 1: sitting on island somewhere, and again, these things have life cycles.
Speaker 1: So if you are one of the persons sitting on
Speaker 1: a yacht or on an island who made a bunch
Speaker 1: of money doing shenanigans and would like to tell us
Speaker 1: about it, all of the reporters of Bloomberg have signal,
Speaker 1: feel free to let us know we're having to chat
Speaker 1: at any time. One of the big picture questions that
Speaker 1: we got and I feel like you are uncommonly qualified
Speaker 1: to think about this, given the remit of your universe
Speaker 1: is from Johannes Where do you think crypto will be
Speaker 1: a hundred years from now? I struggle with the like
Speaker 1: the baseline question of like, what do you think is
Speaker 1: going to happen tomorrow? So a hundred years from now
Speaker 1: feels hilariously far away. But are there any kind of
Speaker 1: big ends that you're seeing that you think either crypto
Speaker 1: is like going to benefit from or is it just
Speaker 1: going to be nuclear war and none of this is
Speaker 1: gonna matter anyway? Well, that'll probably be true. But leaving
Speaker 1: that out, I do feel like the whole concept of
Speaker 1: trustlessness is kind of inescapable evolution of basically everything. I think,
Speaker 1: just sort of the distributed nous of online life and
Speaker 1: the way that trend is going, the way you know,
Speaker 1: everything is becoming basically unverifiable that you look at in
Speaker 1: the world, deep fakes, Twitter, like everything that goes on
Speaker 1: is totally depersonalized increasingly and impossible to trust. I think
Speaker 1: that that aspect of it is probably right at some level,
Speaker 1: Like the creation of of the ledger, of the blockchain
Speaker 1: ledger seems like probably a kind of immutable part of
Speaker 1: the evolution of of people kind basically. So, in a
Speaker 1: very odd sense, I suspect that the discoveries in the
Speaker 1: area of sort of restlessness is it's what it's big
Speaker 1: discovery is going to end up being. And if everything
Speaker 1: gets tokenized and I have an app where every single
Speaker 1: possible financial gesture. I could possibly make scandaled through the
Speaker 1: same channel someday. I wonder if that will be me,
Speaker 1: But I do feel like the arrow of financial revolution
Speaker 1: sort of heads in that direction at some level. Well
Speaker 1: t I L. You are a gigantic hobsy in so
Speaker 1: no amazing Well, thank you so much, Chris, A pleasure
Speaker 1: to have you on the podcast. Same, thank you, Thanks
Speaker 1: again to everyone who's amissed questions, and thank you Chris Nig.
Speaker 1: You can find Chris ns with a at Chris nig
Speaker 1: One that c h R I s n A g
Speaker 1: I one on the next episode of Bloomberg Crypto. September
Speaker 1: might have a reputation for being cruel to the bitcoin faithful,
Speaker 1: but are they also in for a ska in October.
Speaker 1: This is Bloomberg Crypto, a daily podcast from Bloomberg and
Speaker 1: I Heart Radio. For more shows from I Heart Radio,
Speaker 1: visit the I Heart Radio app, Apple Podcasts, or wherever
Speaker 1: you get your podcasts. Send us your comments, questions or
Speaker 1: suggestions for the show to Crypto at Bloomberg dot net
Speaker 1: or find us on Twitter. We're at Crypto. The supervising
Speaker 1: producer of Bloomberg Crypto is Vicky Vergalina. Our senior producer
Speaker 1: is Janet Babin. Our producers are Mohammed Faruke and Sharon Barriro.
Speaker 1: Our associate producers are Ty Butler and Moses on Them.
Speaker 1: Desta wonder At is our engineer. Original music by Leo Sidron.
Speaker 1: I'm Stacy Marie Schml. We'll be back tomorrow at the
Speaker 1: Staring at a Fund in a d