Speaker 1: From Marhard where Innovation, Money and power Collie in Silicon.
Speaker 2: Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3: I'm Caroline Heyde a Bloomberg's World headquarters in New York.
Speaker 2: And I'm Met Lolow in San Francisco. This is Bloomberg
Speaker 2: Technology and full.
Speaker 3: Coverage ahead on the SEC's approval of bitcoinyts. What does
Speaker 3: it mean for the one point seven trillion dollar digital
Speaker 3: assets sector?
Speaker 2: Will discuss, and Hertz makes a U turn on its
Speaker 2: ev push as the company announces it's selling twenty thousand
Speaker 2: electric vehicles after overestimating demand.
Speaker 3: Plus the tech industry is kicking off the new year
Speaker 3: with some significant job cuts, will break it all down.
Speaker 3: Let's have a little look what's happening though in the
Speaker 3: asset of today and indeed yesterday.
Speaker 4: We've got to look at bitcoin.
Speaker 3: It has had a volatile trading session, actually at one
Speaker 3: point almost sing that forty nine thousand dollars handle. We're anticipating,
Speaker 3: of course, the adoption RBC saying what fifty to one
Speaker 3: hundred billion dollars of inflows for the first year due
Speaker 3: to these ets, eleven of them of course go live today.
Speaker 4: Ed time for some team coverage.
Speaker 2: Let's break it all down and bring in Bloomberg Shanali
Speaker 2: Bassek and Katie Greifeld and Katie, I want to start
Speaker 2: with you. I guess the question is where do we
Speaker 2: look now for reaction to news. We've shown the equity markets,
Speaker 2: Kara showed her risk asset of choice Bitcoin, but there's
Speaker 2: also some flows data that shows us the story here.
Speaker 5: Specifically, you want to be looking at the trading volume.
Speaker 5: That's what we know right now. We'll get that flow
Speaker 5: data tomorrow theoretically, but you take a look at.
Speaker 4: Who's winning the volume race.
Speaker 5: So far, you have Gray Skill and you have black
Speaker 5: Rock out in front. All told, you've had thirty two
Speaker 5: million shares of GBTC tradeover for Blackrock that comes in
Speaker 5: around twenty six million shares all told. All along, eleven
Speaker 5: of these ETFs all together have traded about two point
Speaker 5: eight almost two point nine billion dollars so far, so
Speaker 5: really a lot of volume on day one for GBDC.
Speaker 5: There is some speculation that this really for a lot
Speaker 5: of investors is the first time that they have had
Speaker 5: a chance to sell. So Bloomberg Intelligence, for example, has
Speaker 5: theorized that maybe that selling pressure for Blackrock. There's a
Speaker 5: lot of speculation out there, whether they preceded this fund,
Speaker 5: whether you're seeing that come through in the trading volumes.
Speaker 4: I asked Ja Jacobs.
Speaker 5: At Blackrock that but an hour and a half ago,
Speaker 5: didn't get much of an answer there, but a lot
Speaker 5: of theories as to what's actually behind this volume.
Speaker 3: And there's the mechanics, there's the infrastructure Shanali. Then there's
Speaker 3: the ultimate view on whether this is really the turning point,
Speaker 3: whether this means mascal adoption, whether suddenly people on their
Speaker 3: iras and their pension funds start just sprinkling in a
Speaker 3: little bit of bitcoin. When we look at the price
Speaker 3: action of the og of crypto, do we think that
Speaker 3: it is well, what's.
Speaker 6: Interesting is you did see trading volume CIVI bilions, as
Speaker 6: you were hearing Katie saying, But when you look at
Speaker 6: the price action in bitcoin itself, it reached forty nine
Speaker 6: thousand very briefly on the day, but it's back well
Speaker 6: below or fluctuating around forty six thousand. So this has
Speaker 6: not been to sell the news moment, nor has it
Speaker 6: been the buy the news moment. Since we have seen
Speaker 6: DCTF start to take off, and even with that announcement
Speaker 6: of trading volumes being significant, you're still not seeing that
Speaker 6: movement in Bitcoin, and in fact, in some of the
Speaker 6: bitcoin related stocks, as I was saying, coin Base being
Speaker 6: down more than six percent. A big question in the
Speaker 6: market is what this means for exchanges, let alone bitcoin itself. Now,
Speaker 6: I will point to one place you are seeing some
Speaker 6: action as ethereum, and I think the reason that's interesting
Speaker 6: is because people believe that if you see a bitcoin
Speaker 6: related spody tf then the issuers, if they are successful,
Speaker 6: will move to other products. Will they move to ethereum?
Speaker 4: Now?
Speaker 6: One thing that's interesting about this is the SEC's owned
Speaker 6: statement which was very clear that this was for one
Speaker 6: asset and one asset alone, Bitcoin and it was not
Speaker 6: an endorsement of the bitcoin world in itself. And so
Speaker 6: you are seeing sparks of exuberance and ethereum that you're
Speaker 6: not seeing the same way in Bitcoin at this moment.
Speaker 6: But is it founded is the question?
Speaker 3: And also sparks of exuberance excitement when it comes to
Speaker 3: an IPO pipeline related to crypto asset circle, the stable
Speaker 3: coin issue, what do.
Speaker 6: We learn today a long time coming as well wasn't that.
Speaker 6: You all may remember that this was a company that
Speaker 6: tried to go public via s back that was overseen
Speaker 6: by Bob Diamond's company, And since that moment, we've been
Speaker 6: waiting many, many months to see what circles ultimate exit
Speaker 6: strategy would be. Remember, they had a tough road to
Speaker 6: get here. They had money tied up in the Silicon
Speaker 6: Valley bank debacle. They were really able to pivot after that,
Speaker 6: and they have been able to hold their model into
Speaker 6: this IPO. Now, the stable coin world is quickly changing,
Speaker 6: there's regulation around it. This is all colliding kind of
Speaker 6: at the same time here and is there a market
Speaker 6: for crypto related a stable coin related stocks. Remember it's
Speaker 6: a different flavor of crypto asset at a time when
Speaker 6: the IPO market is supposedly opening up.
Speaker 4: Will be an interesting year, Katie.
Speaker 2: The news of the approval, the official news broke just
Speaker 2: before I went on stage with Adena Friedman at CES
Speaker 2: and on stage I said this is the breaking news,
Speaker 2: and there was a small ripple of applause a small
Speaker 2: and I emphasized small. But after that, the conversation I
Speaker 2: had with so many people is wait, how many got approved?
Speaker 4: Do we need eleven of these things.
Speaker 5: No, that's the answer that I've gotten from pretty much everyone,
Speaker 5: issuers included, not specifically on the record in a lot
Speaker 5: of cases. But the thinking is that, okay, this is
Speaker 5: a very crowded field, and the question becomes, how do
Speaker 5: you differentiate yourself if everyone's going at once and we
Speaker 5: all hold the same thing. And the answer has been
Speaker 5: to cut fees and then cut fees again.
Speaker 7: These fees are extremely low.
Speaker 5: You have bit Wise at the bottom there charging twenty
Speaker 5: basis points. That's their eventual fee. At the top, of course,
Speaker 5: you have GPTC charging one point five percent. That's a
Speaker 5: little bit of a different story there. But when it
Speaker 5: comes to where we are a year from now, what
Speaker 5: the assets and these eleven funds actually looked like. The
Speaker 5: expectation is that this will be a winner take most
Speaker 5: sort of environment. That you're going to have a handful
Speaker 5: of these funds holding the bulk of the assets, and
Speaker 5: it'll be interesting to see if we actually whittle down
Speaker 5: here and some of these funds eventually do shut.
Speaker 3: Let's talk about one of those funds in a moment,
Speaker 3: not invest at Katie Greifeld, we thank you so much.
Speaker 3: We can go to one of those key issues of
Speaker 3: n spot Bitcoin ETF. Roger Basin's with us Franklin Templeton,
Speaker 3: head of Digital Assets, You of course have launched the
Speaker 3: Franklin Bitcoin ETF today. Remind us of the fees, remind
Speaker 3: us of why perhaps you think you're going to survive
Speaker 3: at least within the eleven that we have.
Speaker 8: Well, I would just point to Bloomberg's own research.
Speaker 9: People need to go to Bloomberg to see how the
Speaker 9: fees line up for the issuers. Do you think it's
Speaker 9: correct that you need to look at the longer term
Speaker 9: about where this goes. This has been a very dynamic
Speaker 9: issuing environment over the past several days and weeks, and
Speaker 9: we expect at the dust will settle in the period ahead.
Speaker 9: But for sure, we believe this is a page that's
Speaker 9: been turned in this chapter. Accessibility to bitcoin outside of
Speaker 9: a digital wallet, inside of some of the more crypto
Speaker 9: native firms is what the story is here. It's no
Speaker 9: secret why we use the ticker symbol EASBC, because that's the.
Speaker 4: Story of the day.
Speaker 2: Roger, the accessibility part is the most interesting to me.
Speaker 2: Who is taking advantage of this product? Have you specific
Speaker 2: evidence of whether it's kind of legacy investment managers managing
Speaker 2: people's four one ks right through to the big institutionals
Speaker 2: that are active this morning.
Speaker 9: Well, I think again, the story today and volumes that
Speaker 9: are happening today is.
Speaker 8: Something that will change and pivot as we get.
Speaker 9: Deeper into twenty twenty four because the idea that there
Speaker 9: is a trusted brokerage account.
Speaker 8: I mean, we've had decades, in decades.
Speaker 9: Of regulatory oversight on the brokerage industry and as a
Speaker 9: result of that, the broker's account has become a trusted
Speaker 9: infrastructure within the overall capital markets for clients of hold
Speaker 9: and so to bring a Bitcoin exposure, which is really
Speaker 9: a story.
Speaker 8: About the growing and evolving network.
Speaker 9: Economy by and large, whether it's you know, bitcoin is
Speaker 9: a single purpose network, or whether it's Ethereum and the
Speaker 9: array of other public blockchain networks that are going to
Speaker 9: be used as really utilities for this data driven economy
Speaker 9: going forward.
Speaker 8: I think that's a thematic story that's going on.
Speaker 10: So I think we really want to point towards the
Speaker 10: longer term thematic story. But it's a successibility that opens
Speaker 10: up not just for individual investors, but for institutions also
Speaker 10: who are looking for trusted infrastructure and trusted providers to
Speaker 10: bring these innovations alongside of their other investments.
Speaker 3: What's interesting is, of course, in the same breath as
Speaker 3: signing off on these et the SEC chair then went
Speaker 3: on to say that investors should remain cautious about the
Speaker 3: myriad of risks associated with bitcoin and products whose value
Speaker 3: is tied to crypto. Roger, you are someone who's been
Speaker 3: at the cutting edge of this, trying to involve and
Speaker 3: build infrastructure over at Franklin tempton deciding how to involve
Speaker 3: digital assets more broadly with real world assets. What more
Speaker 3: is needed within the infrastructure space to make it that
Speaker 3: the SEC chair doesn't think that you should still be
Speaker 3: very cautious.
Speaker 8: Well, I think the SEC chairman is right to talk
Speaker 8: about caution.
Speaker 9: I mean, look, those of us who have been managing
Speaker 9: assets for our clients for dozens of years, there's volatility.
Speaker 8: Inside of this.
Speaker 9: You guys led with that story, with the volatility, the
Speaker 9: daily volatility that happens.
Speaker 8: And we think that's still going to exist in this space.
Speaker 8: The question is whether you are rewarded for taking that volatility.
Speaker 9: I think long term metrics have certainly shown so far
Speaker 9: that investors are rewarded for taking that volatility in that
Speaker 9: risk and then putting these alongside other assets for generating
Speaker 9: best outcomes going forward.
Speaker 8: But you're correct. We have been working.
Speaker 9: Closely with the SEC as it relates to block checking
Speaker 9: technologies and using them as infrastructure inside of already traditional
Speaker 9: assets in order to increase utility for underlying savers. And
Speaker 9: so we see the caution and we understand it, and
Speaker 9: we are alongside of that when we're counseling clients for
Speaker 9: risks in their portfolios.
Speaker 2: In general, Roger, the harving coming up later in the
Speaker 2: year is a point of discussion in parallel with this
Speaker 2: ETF roller coaster. Have you modeled and planned for that
Speaker 2: and how will it impact the products in your business?
Speaker 9: You know, path performance is not indicative of future results. However,
Speaker 9: if you look at previous having cycles there.
Speaker 8: It seems to be a technical situation.
Speaker 9: We all know that bitcoin is a constrained asset or
Speaker 9: only a certain amount of supply.
Speaker 8: When that supply begins to be.
Speaker 9: Diminished, especially alongside this this environment increased accessibility, it might
Speaker 9: create interesting technical dynamics flowing either way.
Speaker 11: But I think as you're seeing the market, as you've
Speaker 11: put Arbin pointed out, is pivoting toward what are other
Speaker 11: public blockchain network infrastructure opportunities that investors may be able
Speaker 11: to tap, and so you've seen that price action diverge.
Speaker 9: A little bit between ethereum and Bitcoin in the previous days.
Speaker 2: Just the timely skin in the game conversation, Roger Bastin Franklin, Templeton,
Speaker 2: thank you so much. Some breaking news crossing the Bloomberg
Speaker 2: terminal in the last few moments. The FAA is formally
Speaker 2: investigating Boeing over the seven three seven Max nine incident
Speaker 2: of the weekend. The FAA said in a post on
Speaker 2: x that this incident should never have happened and it
Speaker 2: cannot happen again. Later on, in that statement, it flags
Speaker 2: Boeing's manufacturing practices needing to comply with high safety standards
Speaker 2: that they are legally accountable to meet, and they've attached
Speaker 2: formal letter on that investigation. The shares you just saw
Speaker 2: there have been under pressure. Anyway, Reminder that what happened
Speaker 2: on that Alaska flight over the weekend is that a
Speaker 2: plug in the rear of that plane detached mid flight.
Speaker 2: And now the FAA saying, Caroline that there is a
Speaker 2: formal investigation relating to that incident.
Speaker 3: We stay on top of that story. We also stay
Speaker 3: on top of others that broke earlier today. Coming up
Speaker 3: the Hertz decision to reverse course on its push into
Speaker 3: electric vehicles. Details ahead on the company's decision look to
Speaker 3: offload twenty thousand electric vehicles and like a demand, we'll
Speaker 3: dig into it at the moment.
Speaker 4: This is Bloomberg Technology.
Speaker 2: In a major reversal after a large purchase of Tesla vehicles.
Speaker 2: In twenty twenty one, Hurts announced it is it's going
Speaker 2: to sell twenty thousand electric vehicles in return to buy
Speaker 2: gas powered cars joining us Now Bloomberg's David Welch, Detroit
Speaker 2: bureau chief, and David, this is a far cry from
Speaker 2: the plan. They were going to buy almost three hundred
Speaker 2: and fifty one hundred and fifty thousand vehicles across Tesla,
Speaker 2: GM and Pollstar.
Speaker 4: Now they're trying to get rid of them. What is
Speaker 4: said about why?
Speaker 1: Same thing they said in the third quarter, only more
Speaker 1: so they had depreciation on the cars, so they've got
Speaker 1: this feud of vehicles. Elon Musk cuts prices by twenty
Speaker 1: five thirty percent on most models. That means the resale
Speaker 1: value of Tesla vehicles out in the market hurts, including
Speaker 1: those that hurts itself is carrying, so they had to
Speaker 1: take a basically a charge for the disposition casts they have.
Speaker 1: They also had higher repair costs for these vehicles. All
Speaker 1: that was hurting earnings and they set in the third
Speaker 1: quarter that they actually missed Wall Street estimates of seventy
Speaker 1: seven cents a share by seven cents because of that.
Speaker 1: So when you look at that, they had to do something.
Speaker 1: Because EV prices are still challenged, they had to actually
Speaker 1: continue to come down EV sales. New vehicle sales still growing,
Speaker 1: but growing at a much slower pace. That has an
Speaker 1: impact on pricing and the used car market as well.
Speaker 1: All of this stuff is really related, so they had
Speaker 1: to make an adjustment. It also means down the line
Speaker 1: they're going to buy fewer vehicles from GM and from Polestar.
Speaker 1: If they do buy one hundred and seventy five thousand
Speaker 1: GM evs, it'll be over a much longer period of
Speaker 1: time than five years. That's what Stephen sure the CEO,
Speaker 1: told me an interview this morning. So there's a lot
Speaker 1: of not good for everybody here because tests will see
Speaker 1: pricing pressure the people who own teslas right now will
Speaker 1: see every sale value go down because it oftens the market.
Speaker 1: And I think for car companies like GM, Pollstar and
Speaker 1: others who may have been hoping to use corporate fleet
Speaker 1: sales and rental sales as a way to buttress demand
Speaker 1: as consumers maybe scratch their heads about evs, that's not
Speaker 1: going to be an easy outlet for sales either. So
Speaker 1: it's a big bump in the road for evs and
Speaker 1: there's decent ripple effect out of this.
Speaker 4: Too, David.
Speaker 3: The context comes as well with a story that was
Speaker 3: written up from Cox Automotive yesterday just showing that the
Speaker 3: demand for EV's isn't picking up pace. Particularly it feels
Speaker 3: as though, well just one point five percent I think
Speaker 3: growth was eked out in the final quarter of last year,
Speaker 3: and that's sequentially been going slower and slower. How much
Speaker 3: is this signaling that ultimately the user isn't ready for
Speaker 3: an EV experience when they're going via hertz.
Speaker 1: There's a lot of that going on. Look, just to
Speaker 1: be sure here, EV sales aren't growing. If you go
Speaker 1: look year over year, the numbers are pretty big, and
Speaker 1: last year was a record year for EV sales, but
Speaker 1: the third quarter to fourth quarter number, I thought it
Speaker 1: was my story. I thought it was significant one point
Speaker 1: three percent third quarter. There are seasonal factors in there,
Speaker 1: but third quarter is usually a pretty strong quarter for
Speaker 1: auto sales because it's new model year turnover and a
Speaker 1: lot of new vehicles come out. Consumers are excited. Fourth
Speaker 1: quarter also very strong because you have things like December
Speaker 1: to remember from Toyota and other sales that drive people
Speaker 1: the showrooms to buy cars. So those are two historically
Speaker 1: strong quarters for vehicle sales. And EB sales only grew
Speaker 1: one twenty three percent after growing six percent second quarter
Speaker 1: to third quarter and fourteen before that. So yeah, still
Speaker 1: growth in the market if you look here over a year,
Speaker 1: but it's definitely slowing down. People are wondering where they're
Speaker 1: going to charge them when they're out and about, and
Speaker 1: there still aren't many affordable evs on the market displaced
Speaker 1: the price cuts. There's only one on the market that
Speaker 1: sells for blow forty thousand dollars, that's the Nissan Leaf,
Speaker 1: and that doesn't go very far on a charge. So
Speaker 1: there's a lot that needs to be sold to consumers
Speaker 1: to get them to continue snapping up evs and big numbers.
Speaker 3: I said David Welch. Great to get the breakdown with you.
Speaker 3: We thank you so much on that big about face. Meanwhile,
Speaker 3: let's get you some more breaking news, this time in
Speaker 3: the banking sect. To Morgan SAMMI is going to be
Speaker 3: paying under three hundred million dollars to settle that block trade.
Speaker 3: Probusestationalie still on set with us to break it all down.
Speaker 3: So the investigation was surrounding what exactly.
Speaker 6: The process of block trading. This is all began in
Speaker 6: the wake of the Arcagos trades. You saw Morgan Stanley
Speaker 6: end up losing some talent over this, departing with the
Speaker 6: firm over concerns about how some of these trades were handled.
Speaker 6: Now what we're seeing is they are close to an agreement.
Speaker 6: According to sources telling our own truth arnaturagnavi' been any
Speaker 6: Morrison and Austin Weinstein that the charges could be between
Speaker 6: two hundred million and three hundred million dollars in While
Speaker 6: that may sound like a lot, it is a lot
Speaker 6: less than expected. Why this matters as well, it is
Speaker 6: one of the investigations that Morgan Stanley wanted to clear
Speaker 6: up in its succession plan as they moved the baton
Speaker 6: from James Gorman over to Ted pickover at Morgan Stanley.
Speaker 6: Now the penalty will be divvied up between the Justice
Speaker 6: Department and the Securities of Exchange Commission, according to Bloomberg sources,
Speaker 6: and it will not include criminal charges against the bank importantly,
Speaker 6: So this would be in the coming days, according to sources,
Speaker 6: and it would turn a page for Morgan Stanley that
Speaker 6: has been an overhang in the last several months.
Speaker 2: All right, Bloomberg Shnati bassing there with the breaking news.
Speaker 2: My goodness, has it been a sprint start to twenty
Speaker 2: twenty four. Okay, time for talking tech and first star up.
Speaker 2: An advisor to the European Union's Court of Justice says
Speaker 2: Google should not win its appeal against a two point
Speaker 2: six billion anti trust fine. EU competition regulators slapped Google
Speaker 2: with the fine in twenty seventeen for favoring its own
Speaker 2: shopping service over those of its rivals and staying with
Speaker 2: EU regulation. Concerns over Amazon's one point four billion dollar
Speaker 2: deal to buy rumba maker i Robot are coming to
Speaker 2: light after the tech giant missed a Wednesday deadline to
Speaker 2: file remedies to anti trust enforces. The Competition Commission has
Speaker 2: set a February deadline to decide whether to approve or
Speaker 2: block the iRobot deal. Plus twenty twenty four is starting
Speaker 2: off with an uptick in tech layoffs.
Speaker 4: In order to restructure and reduce costs.
Speaker 2: Google is now the latest company to cut staff, laying
Speaker 2: off hundreds of workers from its hardware, engineering and digital
Speaker 2: assistant teams.
Speaker 3: Character bit of deja vou there pay And someone that
Speaker 3: we can dive into that very story with is Brodie Ford,
Speaker 3: who perhaps has taken the temperature and mood of Silicon
Speaker 3: Valley right now, and it feels a bit dour again.
Speaker 1: Deja vu is right.
Speaker 12: I remember being here about a year ago we were
Speaker 12: hearing salesforce layoffs Google, Microsoft, tens of thousands of people.
Speaker 12: And this isn't quite that right. I mean, we're not
Speaker 12: talking tens of thousands here, We're talking hundreds, which is
Speaker 12: still you know, disruptive for individuals and a sign that
Speaker 12: the tech economy is not fully back to the kind
Speaker 12: of big growth days.
Speaker 4: Right.
Speaker 12: And so what this really is, it's a costious sign
Speaker 12: for the tech industry that right now still if you
Speaker 12: are working in a division that is not growing rapidly,
Speaker 12: you might still be on the shopping block.
Speaker 4: And what about creative areas.
Speaker 3: I mean, the whole generative AI boom that kind of
Speaker 3: helped be the silver lining of the cloud of job
Speaker 3: losses ends up being a bit of a cloud. If
Speaker 3: you're worrying about your job in the future, maybe Generative
Speaker 3: II is kind of going.
Speaker 4: To take it right.
Speaker 12: I mean, we saw Amazon Studios twitch and then Duo Lingo,
Speaker 12: which the folks that were cut were in a lot
Speaker 12: of the content creation divisions. It's hard to notice a
Speaker 12: trend here that some of these folks working on these
Speaker 12: consumer facing aspects. I mean, I've spoken of sources at
Speaker 12: Duo Lingo who are translators who said that they were
Speaker 12: kind of told like, look, hey, I can do your
Speaker 12: job right and we haven't seen that level of direct replacement.
Speaker 12: And I think the fact that those are starting to
Speaker 12: trickle in it's not a warm sign, right mm hmm.
Speaker 3: Yeah, it certainly isn't. And we're going to be staying
Speaker 3: on that particular story throughout thankfully through Brody Ford, we
Speaker 3: thank you so much quick check on these markets said,
Speaker 3: because we have had the macro paths outweigh some of
Speaker 3: the exuberants around the Crypto ETF. I'm looking at what's
Speaker 3: happening in NASDAC because the CPI print was all important
Speaker 3: for those that are still trying to decide where the
Speaker 3: federal reserve goes. Ultimately, there's another reading, another print ahead
Speaker 3: or the all important March meeting for the federals. But
Speaker 3: still the fact that CPI is running slightly hot does
Speaker 3: mean that maybe Pete Bett's are being taken off the
Speaker 3: table for as soon as March rate cut. We're currently
Speaker 3: off by eight ten percent on the NASDAK. Of course,
Speaker 3: Bloomberg Donar Innex increases because of those anticipations that maybe
Speaker 3: the cuts won't come as soon as anticipated. Bitcoin though
Speaker 3: all eyes trained on this after of course eleven ets
Speaker 3: go live today and spot bitcoin ETF trading, we're off
Speaker 3: just by three tens percent, but it has been a
Speaker 3: volatile ride, at one point at forty nine thousand. Before
Speaker 3: we get into that more broadly, look at some of
Speaker 3: the individual movers on the day and on some of
Speaker 3: the MAC market capitalizations that we're focusing in on, because
Speaker 3: check this out. We are looking at Microsoft in the
Speaker 3: blue about it looks like to eclipse the market capitalization
Speaker 3: again of Apple in the White Apple, of course getting
Speaker 3: numerous sort of cell ratings or indeed going neutral on
Speaker 3: the stop. We've been questioning the valuations we're worrying about China,
Speaker 3: so market CAAP has taken a hit. We're about two
Speaker 3: point eight trillion for both companies at the moment. Move
Speaker 3: on to some of the individual movers when it comes
Speaker 3: to the world of crypto though, because there has been
Speaker 3: this perhaps sell the fact kind of a move, or
Speaker 3: ultimately digest the amount that we've run up in these
Speaker 3: stocks ahead of the all important spot ETF sign off
Speaker 3: from the SEC. Riot platforms down by sixteen percent. MicroStrategy
Speaker 3: of course, big holding a bitcoin on its balance sheet
Speaker 3: of by five percent, Clean Spark it's a mining company
Speaker 3: of by almost ten percent. So there has been a
Speaker 3: bit of weakness in today's trading in all right, let's get.
Speaker 2: Some more reaction on every single one of those themes.
Speaker 2: Yesterday I caught up with Nasdaq CEO Adina Friedman at
Speaker 2: cs and Las Vegas just as the SEC approval of
Speaker 2: bitcoin ets was announced. Take listen to her reaction and
Speaker 2: what she has to say in particular about future regulation.
Speaker 7: What it really tells you is that from a regulatory
Speaker 7: point of view, there's been some maturing of the bitcoin
Speaker 7: markets to the point where the SEC has now said,
Speaker 7: we approve these new vehicles that allow retail investors to
Speaker 7: access bitcoin. They don't have to actually buy underlying bitcoin,
Speaker 7: but they can have an opinion about the trends in bitcoin,
Speaker 7: and they can express themselves in a regulated market, which
Speaker 7: of course is NASAK. So also, these instruments are highly liquid,
Speaker 7: and it makes it so that they have ready access
Speaker 7: to an investable vehicle in this space. So we're excited
Speaker 7: to be their partner.
Speaker 2: There are some sort of cerebral, somewhat academic debates about bitcoin,
Speaker 2: in particular about whether it is a risk asset and
Speaker 2: asset class. If it is not, is it a store value?
Speaker 2: Is the NASDAC approach that this development kind of moves
Speaker 2: towards a deeper focus on crypto as an asset class.
Speaker 7: I think I've delivet a little differently. You know, we
Speaker 7: have we have ETFs that reflect lots of different instruments
Speaker 7: and asset classes, whether it's commodities or equities, bonds, other
Speaker 7: forms of you know, OTC instruments. As long as there
Speaker 7: are liquid and they have a solid underlying price, discovering mechanism,
Speaker 7: which now the SEC is saying the bigcoin ETF, the underlying,
Speaker 7: the underlying market provides price discovery for the ETF, and
Speaker 7: they are approving the ETF. So I think that that's
Speaker 7: an interesting signal. But I also would say that that's
Speaker 7: our job is to provide create index products. We have
Speaker 7: about five hundred billion dollars of asset center management in
Speaker 7: our own indexes, and then to be the listing exchange
Speaker 7: for those index provider products that allow investors to invest
Speaker 7: in all sorts of tradable instruments, including bitcoin.
Speaker 2: Okay, final question on this subjects let's go back twenty
Speaker 2: four hours or most an sec X account posts. We
Speaker 2: now know that it was an unauthorized post. It was
Speaker 2: a hack. We are looking into it. But Twitter, your
Speaker 2: X formulas have explained what they believed happen, just as.
Speaker 4: The CEO of a leading exchange.
Speaker 2: Just explains to me what it was like for you
Speaker 2: that madness of yesterday afternoon. Given our Bloomberg audience had
Speaker 2: a very similar experience.
Speaker 7: Well, I think the the behaviors in the markets really
Speaker 7: came from looking at anything that was related to bitcoin itself.
Speaker 7: So the underlying bitcoin markets, and then sort of any
Speaker 7: sort of public companies that had that kind of underlying
Speaker 7: ourset class as part of their business. But I think
Speaker 7: for us, it's really a matter of making sure that
Speaker 7: we think about more generally what protections we put in
Speaker 7: place as more technologies used to drive trading, but also
Speaker 7: as more information is being used in real time to
Speaker 7: direct people investors, so we look at it more for
Speaker 7: our protection perspective. We first of all want to think
Speaker 7: about as AI comes more into the markets, how do
Speaker 7: we regulate that appropriately? And I think both the SEC
Speaker 7: and the CFTC of expressed that there are going to
Speaker 7: be interested in that what kind of smart regulation family?
Speaker 4: But in place.
Speaker 2: That was Adina Friedman NASDAK chair president and CEO.
Speaker 3: Character We've got to keep on talking crypto. The conversation
Speaker 3: continues that Jack Manners is strike CEO. Of course, digital
Speaker 3: wallet built on Bitcoin's Lightning network is an important led
Speaker 3: to offering to make basically the transactions on Bitcoin that
Speaker 3: much faster, easier, smooth. I'm interested Jack, because you have
Speaker 3: been someone who's been developing this space, thinking about crypto
Speaker 3: and bitcoin in particular for a decade. It took a
Speaker 3: decade for us to get to this point at the
Speaker 3: spot bitcoin ETF when, of course we saw the brothers
Speaker 3: of inclebined brothers come out and want to get into
Speaker 3: this spot bitcoin ETF scenario. What does it mean to you.
Speaker 13: Oh man, Well, first of all, Bitcoin ETF Day, Thank
Speaker 13: you guys for having me.
Speaker 8: I think it's a huge deal.
Speaker 13: I view bitcoin as the best expression of fiat debasement.
Speaker 13: What I mean by that is as nation states and
Speaker 13: central banks print more of their own currency and devalue
Speaker 13: it like devaluing the US dollar. I think bitcoin is
Speaker 13: the best expression of that. You can see that most
Speaker 13: in the rise of bitcoin's price, and it's because of
Speaker 13: two things. It's the scarcest asset on the planet. You
Speaker 13: can't make any more of it, and it's one of
Speaker 13: the only asset classes in the world that demands energy
Speaker 13: to acquire it. And so those two things make it
Speaker 13: the best expression of what's increasingly the biggest problem that
Speaker 13: money managers have, which is how to take the other
Speaker 13: side of governments inevitably printing their way out.
Speaker 8: Of all this debt.
Speaker 13: And so the fact that Wall Street said, you know what,
Speaker 13: those hoodie coders over the last decade, Boy, they got
Speaker 13: loud mouse like that Jack guy.
Speaker 8: But we got to get in on.
Speaker 13: This too, because the government looks like they're going to
Speaker 13: stop QT and start QE, and we need to own
Speaker 13: an asset that protects us and I think that's bitcoin,
Speaker 13: So monumental day.
Speaker 2: Let's go, all right, Jack, let's go, Jack. Do we
Speaker 2: need eleven different ETFs to do that?
Speaker 13: You know who knows best ed the free market, and
Speaker 13: I think it's important that Wall Street allows for that.
Speaker 8: So we'll see. The market will tell us. My personal
Speaker 8: opinion probably not.
Speaker 13: That seems a bit excessive, but I'm here for it
Speaker 13: and I love it, so.
Speaker 8: We'll see the free market. I think we'll fix a
Speaker 8: lot of this stuff.
Speaker 13: I also am not entirely sure how Wall Street and
Speaker 13: their T plus two settlement is going to handle the
Speaker 13: apex predator that is Bitcoin. I think it'll be an
Speaker 13: interesting journey over the next twelve months to see how
Speaker 13: many of these things are left and how they're able
Speaker 13: to handle an asset that doesn't have off hours, that
Speaker 13: doesn't have supply that you can go print more of,
Speaker 13: or that you can call the CEO and tell them
Speaker 13: to calm down.
Speaker 8: It's a new beast for Wall Street.
Speaker 13: But they talk a big game, so hopefully they're plenty capable.
Speaker 2: When I posted on x that you were coming on
Speaker 2: this sh show and you replied with your apex predator thesis,
Speaker 2: lots of people had some pretty cerebral questions for you,
Speaker 2: one of which is, has bitcoin kind of lost its
Speaker 2: original ethos by being accessible as an ETF The wording
Speaker 2: of one user is the original ethos of beaitcoin gone.
Speaker 2: Now the ets will start to maintain custody of bitcoin.
Speaker 13: No, the most important principle of bitcoin is that you're
Speaker 13: not required to centralize your custody or to conform to
Speaker 13: a monetary policy that's outside of your control. Anyone can
Speaker 13: still do whatever they want with bitcoin. I've got some
Speaker 13: stored right in the other room, and there's nothing Blackrock
Speaker 13: could do about that. But if someone wanted to use
Speaker 13: bitcoin with Blackrock, go for it. That doesn't break any
Speaker 13: principle or change any type of culture set whatsoever.
Speaker 8: Like I said, I think.
Speaker 13: It's monumental that the world has access to a monetary
Speaker 13: supply where it cannot be inflated and that absolutely demands
Speaker 13: energy to hold it. Those two things protect you against
Speaker 13: inflation and the valuing of currency. And so if people
Speaker 13: want to get that through Blackrock, I question it. I
Speaker 13: think it's maybe a little expensive, it's not for everybody,
Speaker 13: but go for it. I don't think it's anyone's position
Speaker 13: to say, well, you can or can't do in bitcoin.
Speaker 8: That's why it's important.
Speaker 3: What's interesting about Strike in particular is you have Strike Private,
Speaker 3: which you help pluck private clients. Ultimately, those high networth individuals,
Speaker 3: those family offices that did want exposure to bitcoin before
Speaker 3: this suddenly incredibly easy ETF was available. Is that in
Speaker 3: any way going to implicate your business.
Speaker 13: So we're seeing all time high numbers, even back to December.
Speaker 13: This is now a trend leading up to this event.
Speaker 13: And the way we think about ourselves is we're one
Speaker 13: of the best in the world at bitcoin is not
Speaker 13: the best, And what that means is technology licensing, global
Speaker 13: access when it comes to bitcoin, this new thing.
Speaker 8: We're one of the best in the world at that.
Speaker 13: And so Wall Street may take a sector of high
Speaker 13: network institutional client, so we probably never were going to
Speaker 13: serve anyway.
Speaker 8: But it lifts all boats. It lifts all boats.
Speaker 13: I really don't think that this is a winner take
Speaker 13: all or winner take most market. This is an entirely
Speaker 13: new monetary network and we're one of the best in
Speaker 13: the world at it. So we're stoked. We're stoked to
Speaker 13: see the attention, We're stoked to see the validity, We're
Speaker 13: stoked to see the maturity, and we're here for it.
Speaker 13: I think, you know in five to ten years, being
Speaker 13: one of the best in the world, that this thing
Speaker 13: is going to be a really, really good business.
Speaker 8: And that's why I'm the founder and CEO of it.
Speaker 8: So we're happy.
Speaker 3: What's interesting is, of course, in the US, bitcoin has
Speaker 3: been seen basically as well an asset to be able
Speaker 3: to bet on ultimately, whether or not it's a store
Speaker 3: of value, it's certainly been one that people have been
Speaker 3: wanting to gain exposure to, to see it as volatile,
Speaker 3: to see the games. But elsewhere in the world they
Speaker 3: do use it as a way of ultimately being able
Speaker 3: to transact, to use it as some sort of currency. Now,
Speaker 3: when does that potentially start to seep into the US,
Speaker 3: because at the moment, we've seen the validity of it
Speaker 3: as an asset, as a store of value, but not
Speaker 3: as a currency here in the United States.
Speaker 13: I'm not to be honest, because I'm not sure, it
Speaker 13: totally matters. So, for example, I don't own any dollars anymore.
Speaker 4: I'm sick of them.
Speaker 13: You know, I think the real risk is owning dollars
Speaker 13: because all they do is go down. And traditionally the game.
Speaker 8: Was, well, shoot, what do I own?
Speaker 13: The government's going to keep printing currency? There in so
Speaker 13: much debt. Do I try and own a house? Do
Speaker 13: I try and own an index of stocks? Do I
Speaker 13: try and find out what Jeff Bezos is up to
Speaker 13: now that he's not.
Speaker 8: The CEO of Amazon?
Speaker 13: And bitcoin is the most accessible, most simple, best expression
Speaker 13: of this problem that you know ed how many people
Speaker 13: in the world have to deal with fiat debasement.
Speaker 8: Give me a number.
Speaker 13: What do you think you answer that jack eight billion?
Speaker 8: All of us.
Speaker 13: Everybody is subject to a fiat currency that's devaluing, and
Speaker 13: everyone has access to this thing, and so if you
Speaker 13: want to use it for payments, if you want to
Speaker 13: store it.
Speaker 8: So, for example, I live on credit cards, the US.
Speaker 13: Banking system gives me a thirty day revolving door of
Speaker 13: credit where I could spend dollars without needing to own
Speaker 13: those pieces of trash, And so I just sit at
Speaker 13: bitcoin all day. I spend on credit and so to me,
Speaker 13: I don't know anyway. Does that answer your question? I
Speaker 13: think I think it doesn't totally matter.
Speaker 4: Jack.
Speaker 2: We have five seconds. Where does bitcoin peak in twenty
Speaker 2: twenty four?
Speaker 13: This I think we see new highs this year, and
Speaker 13: I think this thing lands between two hundred and fifty
Speaker 13: k to a million, around the five hundred thousand dollars
Speaker 13: range at some point in twenty five. I think there's
Speaker 13: a lot of money printing that the government's going to
Speaker 13: have to do and this is the fastest course.
Speaker 2: Jack Maler's Strike CEO, Thank you very much for your time,
Speaker 2: always colorful on this program.
Speaker 4: Thank you.
Speaker 2: We'll check in on the health of the industry when
Speaker 2: it comes to healthcare and Bench Capital with Dina Shakid
Speaker 2: coming up next from Lux Capital. This is Bloomberg Technology
Speaker 2: with a JP Morgan healthcare conference in full swing in SF.
Speaker 2: Let's discuss the state of the health tech space with
Speaker 2: Dina Shaker, general partner over Atlux Capital, venture firm with
Speaker 2: more than five billion dollars of assets focusing on emerging
Speaker 2: science and tech companies.
Speaker 4: Din a Happy New Year. I was in Las Vega.
Speaker 4: Happy New Year. I was in Las Vegas.
Speaker 2: At CS and unusually JP Morgan happening at the same
Speaker 2: time in San Francisco.
Speaker 4: Is there one.
Speaker 2: Single defining piece of gossip that went on in the
Speaker 2: hallways of that hotel.
Speaker 4: More than one air, that's for sure.
Speaker 14: I would say the mood was generally cautiously optimistic. Lots
Speaker 14: of excitement around the acronyms AIGLP one and really the
Speaker 14: intersection of bio and digital in twenty twenty four, And.
Speaker 3: Therefore was there exuberance around writing checks to these ven
Speaker 3: diagrams that might not overlap overlap as much as might
Speaker 3: be into But I'm interested as to whether people wanted
Speaker 3: to go in and still support these companies or whether
Speaker 3: it's still a story of having to do more with less.
Speaker 14: Well, exubritants is not quite the word I would use,
Speaker 14: but I would say there was, you know, interests and excitement.
Speaker 14: JPM is traditionally more focused on the public side of things,
Speaker 14: but of course that does have a direct impact on privates,
Speaker 14: and there is a sort of a private track at
Speaker 14: the conference. Lots of announcements around M and A on
Speaker 14: the pharmacide, around big partnerships with AI and health systems,
Speaker 14: and so you can expect investors to continue to be
Speaker 14: excited about those particular intersections, both on the bioside as
Speaker 14: well as healthcare as they look toward early stage funding.
Speaker 3: And what's been interesting is on the bioside there's been
Speaker 3: in a sort of spate of m and A happening
Speaker 3: to kick off the new year, but also evaluation question
Speaker 3: and going on in the public markets, at least when
Speaker 3: it comes to big tech the Magnificent seven. There must
Speaker 3: have been a lot of discussion about what the public
Speaker 3: markets means for the private markets, in particular about IPOs,
Speaker 3: about exit Stina, how you seeing that vole for twenty
Speaker 3: twenty four?
Speaker 14: That was the question I probably got asked the most,
Speaker 14: both from companies and other investors. You know, if I
Speaker 14: could look into a crystal ball, which I cannot, what
Speaker 14: does twenty twenty four look like for IPOs? You know,
Speaker 14: I think it looks a little better than it did
Speaker 14: in twenty twenty three. I don't think it's going to
Speaker 14: be a watershed moment yet for public markets. I think
Speaker 14: we'll start to see a bit more excitement and perhaps
Speaker 14: twenty twenty five is the year where we start to
Speaker 14: return to what we saw in previous years. But I
Speaker 14: do think there is some movement happening. The M and
Speaker 14: A is definitely paving the path, and as you heard
Speaker 14: from Adena and others on the public side, I expect
Speaker 14: there will continue to be more movement as we move
Speaker 14: toward the second half of twenty twenty four.
Speaker 4: Dina.
Speaker 2: When Lux raised the new fund in April one point
Speaker 2: one five billion, it was for deep tech and science
Speaker 2: focused investments. Nine months on how much of that is
Speaker 2: translated to healthcare biotech farmer, you know quite.
Speaker 14: A bit at In fact, if you listened to some
Speaker 14: of the presentations at JPM, you would hear specifically that
Speaker 14: the interest from pharma on the M and A side
Speaker 14: is specifically around the science, not necessarily on you know,
Speaker 14: financial aspects of the company. At that stage, folks are
Speaker 14: looking to keep up with the GLP one innovation that
Speaker 14: has been an absolute game changer in healthcare. Where is
Speaker 14: the science breakthrough and that's really where Lux has been
Speaker 14: investing for the past several decades and where we continue
Speaker 14: to invest deep tech science on the healthcare side. Certainly
Speaker 14: on AI, we're seeing a lot of intersections of the
Speaker 14: areas where we have traditionally invested. Both from presentations at
Speaker 14: JPM from our portfolio as well as others, and so
Speaker 14: that's where I think they'll continue to be a lot more.
Speaker 14: How can you apply LMS and foundational models to actually
Speaker 14: improve healthcare outcomes? How can technology change the way healthcare
Speaker 14: is delivered to medicaid and to women's health, and how
Speaker 14: can it change the way drugs are developed on the bioside?
Speaker 3: And it is so great to have you back on
Speaker 3: the show, Dina, thank you, Happy new year, happy new
Speaker 3: return from attorney leave. Dina Shecker, of course, general partner
Speaker 3: at Lux Capital. Victoria's Secret gets further into AI. The
Speaker 3: well known retailer plans to create more personalized and inclusive
Speaker 3: online shopping experiences for US global customers by leveraging Google
Speaker 3: Clouds generative AI technologies. Here for more on where these
Speaker 3: relationships evolve. Carry Park, vice President of Industries at Google Cloud,
Speaker 3: along with Chris Rupp, chief customer officer at Victoria's Secret.
Speaker 3: And Chris, I start with you, because where do you
Speaker 3: want to see the impact first and foremost for Victoria's Secret.
Speaker 15: Well, we'd love to see the impact in our customer experience.
Speaker 15: We believe there's a lot we can leverage with Google's
Speaker 15: AI platform to create better customer shopping experiences.
Speaker 3: Carry what's so interesting is AI the hype cycle. Everyone
Speaker 3: discussing it, all businesses in their earnings reports. But yet
Speaker 3: the adoption in real world has been a bit slower
Speaker 3: than the talk. I think of the November survey for
Speaker 3: the Census Bureau saying only well just over four percent
Speaker 3: of all businesses are actually using AI to produce services
Speaker 3: to produce products. How are you seeing the adoption start
Speaker 3: to ramp.
Speaker 8: It's ramping very quickly.
Speaker 16: We consider twenty twenty four to be the activation year.
Speaker 16: So you're seeing live experiences with retailers today using that
Speaker 16: Vertex AI platform to bring better.
Speaker 8: Consumer facing experiences.
Speaker 16: So brands like Macy's are using our retail search today already,
Speaker 16: the Home Depot and Kroger are already bringing these experiences
Speaker 16: to their associates, bringing more information in training. So even
Speaker 16: though you may not think you've touched a generative experience
Speaker 16: from Google, it's coming to you fast in twenty twenty four.
Speaker 3: How Chris does the generative experience, as Carrie says, how
Speaker 3: does that impact your employees in particular, There's been a
Speaker 3: little bit of fair about them being replaced. Does the
Speaker 3: focus on operational efficiencies anyway impact how many people you
Speaker 3: need in customer care for example.
Speaker 15: Actually, the way we're thinking about how generative AI can
Speaker 15: help us is how it can help us on the
Speaker 15: sales floor serve customers better. So when you think about
Speaker 15: the difference between a very experienced sales associate and someone
Speaker 15: who's brand new on the sales floor, the more experienced
Speaker 15: sales associate knows much more about our products and the
Speaker 15: services that we offer. But if we could help even
Speaker 15: the brand new associate understand the breadth of our product
Speaker 15: catalog and be able to serve customers faster and better,
Speaker 15: we would be able to convert many more of our
Speaker 15: visitors into customers. So that's what we're focused on.
Speaker 4: Carrie.
Speaker 3: When you are going through the relationships that you're doing,
Speaker 3: not only with Victoria's Secret Bred you've mentioned how you're
Speaker 3: working with Home Depot, Stay Lord is in there. Kroger
Speaker 3: McDonald's what is the most surprising way in which you've
Speaker 3: see in a business adopt, adapt, and leverage it.
Speaker 8: I don't know that it's surprising. Everybody's really so with
Speaker 8: those big business.
Speaker 16: Challenges and frictions, Just as Chris described at Victoria's Secret,
Speaker 16: closing the gap and things they've dreamt about getting closer
Speaker 16: to their customers. So es Day Laughter is an example
Speaker 16: where they want to have a deep understanding of what
Speaker 16: their customer's saying in social and in their customer service channels.
Speaker 16: And so that's an example of just unique ways to
Speaker 16: get at customer insights and interactions that the technology just
Speaker 16: didn't enable them to in past years.
Speaker 3: Our shopping experiences are going to change inevitably. We thank
Speaker 3: you both for running us through the relationship. Kerry the
Speaker 3: vice president of Industries at Google Cloud and Chris Rupp,
Speaker 3: chief customer officer at Victoria's Secret.
Speaker 4: Thank you both.
Speaker 3: Meanwhile, well that does it for this edition of Blombag Technology.
Speaker 2: Head yeah, karay, check out the podcast wherever you get
Speaker 2: your podcast.
Speaker 4: This is Bloomberg Technology.