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Speaker 1: Good morning. It's Thursday, the eleventh of January here in London.

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Speaker 1: This is the Bloomberg Daybreak You Up Podcast. I'm Caroline Hipkiitt.

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Speaker 2: And I'm Stephen Carroll. Coming up today. After yesterday's faked approval,

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Speaker 2: the SEC really does authorize a bitcoin SPOTYTF for the

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Speaker 2: first time.

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Speaker 1: We have a special report on the secretive French agency

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Speaker 1: blind side in global investors.

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Speaker 2: Plus a hot Mike moment Chris Christy shares unguarded thoughts

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Speaker 2: on Hailey and Desantas as he bows out of the

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Speaker 2: race for the US presidency.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 2: US regulators have for the first time approved exchange traded

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Speaker 2: funds that invest directly in bitcoin. The move is being

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Speaker 2: seen as a landmark event for the roughly one point

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Speaker 2: seven trillion dollar digital asset sector and marks a rare

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Speaker 2: capitulation by the SEC following more than a decade of opposition.

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Speaker 2: The agency authorized eleven funds to begin trading as of today.

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Speaker 2: Here's what SEC Commissioner hester Pierce tol Bloomberg.

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Speaker 3: I'm delighted that we're at the end of this saga.

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Speaker 4: I know there are still pieces of it to go.

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Speaker 3: But I think this is a big milestone.

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Speaker 2: The decision by Hester Pearson her colleagues at the SEC

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Speaker 2: come a day after the false post that the regulator's

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Speaker 2: ex account post had claimed that the agency had approved

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Speaker 2: the ETFs. The Securities and Exchange Commission subsequently said the

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Speaker 2: account had been compromised, causing the price of bitcoin to

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Speaker 2: fluctuate widely.

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Speaker 1: Bank of England Governor Andrew Bailey says that cryptocurrencies have

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Speaker 1: lost momentum on their drive to become part of mainstream finance.

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Speaker 1: Here's what he told a parliamentary committee on the subject.

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Speaker 5: My ostensor is that it's not taking off as a

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Speaker 5: sort of what I might call a sort of core

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Speaker 5: financial service. For instance, using bitcoin as a payments method

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Speaker 5: is pretty inefficient and it isn't taking off much. It's

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Speaker 5: it's no doubt used in certain circles, but it's not

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Speaker 5: taking off generally. I don't think that sort of the

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Speaker 5: integration of it into the from our system has kept the.

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Speaker 1: Momentum Andrew Bailey well. He also reiterated his long standing

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Speaker 1: view that bitcoin has no intrinsic value.

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Speaker 2: The head of the New York Federal Reserves, as interest

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Speaker 2: rates are now high enough to bring down inflation, but

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Speaker 2: John Williams also suggested policymakers need more evidence that price

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Speaker 2: rises are slowing before they start easing.

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Speaker 6: My base case is that the current restrictor stance in

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Speaker 6: marte policy will continue to restore balance and bring inflation

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Speaker 6: back to our two percent longer one goal. I'll expect

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Speaker 6: that we will need to maintain a restrict stance of

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Speaker 6: policy for some time to folly achieve our goals, and

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Speaker 6: it will only be appropriate to dial back the degree

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Speaker 6: of policy restraint when we're confident that inflation is moving

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Speaker 6: towards toward two percent on a sustained basis.

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Speaker 2: Williams out of that any rate cuts would be dependent

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Speaker 2: on the path of inflation and the economy. The New

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Speaker 2: York Fed President's sentiment differs from comments that he made

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Speaker 2: last month when he questioned mone monetary policy was sufficiently restrictive.

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Speaker 1: The White House is backing legislation that would let it

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Speaker 1: seize Russian wealth to help pay for the reconstruction of Ukraine.

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Speaker 1: According to a memo from the National Security Council to

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Speaker 1: the Senate Foreign Relations Committee, President Biden's administration welcomes in

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Speaker 1: principle a bill that would allow the confiscation of some

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Speaker 1: three hundred billion dollars in frozen assets. The move represents

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Speaker 1: a shift as the President attempts to rally support in

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Speaker 1: Congress for further funding of Kiev's counter offensive. So far,

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Speaker 1: Republicans have blocked more than sixty billion dollars in funding

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Speaker 1: for Vladimir Zelenski's forces, partly over concerns that Washington is

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Speaker 1: carrying too much of the financial burden.

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Speaker 2: The US Transport Secretary says Boeing's seven three seven Max

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Speaker 2: planes will remain grounded for some time to come. The

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Speaker 2: airplane maker he's facing intense scrutiny after a door plug

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Speaker 2: ejected from a jet mid flight last week. US regulator

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Speaker 2: is a grounded one hundred and seventy one of the

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Speaker 2: mac of the seven three seven Max nine aircraft and

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Speaker 2: ordered inspections after the accident. People to dead told a

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Speaker 2: transportation conference regulators need to deem the models safe to

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Speaker 2: fly again, and.

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Speaker 3: Made clear to the leadership of Boeing this week this

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Speaker 3: should never have happened in the first place, and the

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Speaker 3: path for any plane in that category to return to

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Speaker 3: service will be dictated by safety, and only by safety.

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Speaker 2: Bout jets didn't give a timeline for the plane's return,

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Speaker 2: but stress the process would not be rushed.

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Speaker 1: The former New Jersey governor Chris Christie says that he

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Speaker 1: is ending his long shot presidential campaign centered on denying

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Speaker 1: one time ally Donald Trump the Republican nomination. Speaking at

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Speaker 1: a town hall event in New Hampshire, Christy said there

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Speaker 1: was clearly no path for him to win the nomination. However,

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Speaker 1: before the event, Christy was called on a hot mic

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Speaker 1: on demining Trump's are the Republican rivals Ron DeSantis and

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Speaker 1: Nicky Hayley.

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Speaker 7: I mean, she's been sixty eight millions, so fortunate on TV,

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Speaker 7: spent sixteen million so far, fifty nine million by Desantas,

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Speaker 7: and we spent twelve. I mean, who's punching above their

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Speaker 7: weight and who's getting a return on their investment? You know,

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Speaker 7: And she's going to get smoked And you and I

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Speaker 7: both know. And she's not up to this.

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Speaker 8: She hasn't even even She's still twenty points behind Crumb

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Speaker 8: in the MAINA right, yeah, oh yeah, and he's still

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Speaker 8: going to carry out on it.

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Speaker 7: Yes, Oh he's I talked to Desantus called me petrified

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Speaker 7: that I would be play getting out of after I.

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Speaker 1: So Despite the unguarded comments by Christy, his exit still

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Speaker 1: potentially boosts the candidacies of Haley and DeSantis, who have

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Speaker 1: emerged as the main alternatives to front run a Trump.

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Speaker 1: Christy led Donald Trump's twenty sixteen presidential transition team, but

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Speaker 1: broke with him shortly after the twenty twenty election when

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Speaker 1: Trump refused to concede to President Joe Biden.

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Speaker 2: Barkleys is planning to unveil a new set of targets

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Speaker 2: for returns and costs next month along with its fourth

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Speaker 2: quarter results. That's as the bank just to the continued

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Speaker 2: slump and deal making and trading revenue. Bloombergs Tea Adebayo

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Speaker 2: has the details.

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Speaker 8: Barkley's traders failed to live up to the previous year's

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Speaker 8: record breaking revenue during the fourth quarter of twenty twenty three.

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Speaker 8: That's according to Barkley's head of investor relations, who blame

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Speaker 8: the continued drought of deals in capital markets activity. It's

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Speaker 8: the problem shared with others in the sector, including Jeffreys,

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Speaker 8: which saw its fourth quarter earnings drop by over half

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Speaker 8: compared to twenty twenty two. In response, Barkley says it

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Speaker 8: will set new targets for returns expenses and shareholder distributions,

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Speaker 8: along with cost cutting to boost profitability in London. Tea

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Speaker 8: Adebayo Bloomberg Radio.

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Speaker 2: In a moment, we'll get more on what the approval

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Speaker 2: of a BITCOINYTF means for the cryptocurrency more broadly. But

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Speaker 2: another story that caught our eye this morning about the

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Speaker 2: power of passports. This is one of those rankings that

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Speaker 2: comes up quite regularly, but there is a bit of

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Speaker 2: movement this time around because we've had now the top

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Speaker 2: spark tide as France, Spain and Italy, They've moved up

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Speaker 2: the rankings slightly.

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Speaker 1: I thought that was quite interesting that it's the European

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Speaker 1: countries that have done well. So this is basically does

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Speaker 1: your how many countries does your passport allow you access

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Speaker 1: to visa free? Well, for the Europeans those ones named

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Speaker 1: one hundred and ninety four out of two hundred and

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Speaker 1: twenty seven destinations. If you want to know where the

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Speaker 1: UK ranks, we've got a British passport fourth with access

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Speaker 1: to one hundred and ninety one. The US those seventh place,

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Speaker 1: staying there, I think actually the most interesting thing about

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Speaker 1: this data that is put together by Henleyan Partners is

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Speaker 1: that everyone has been getting easier access and easier travel,

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Speaker 1: because if you look at two thousand and six, on average,

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Speaker 1: the number of destinations that travelers had was fifty eight countries,

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Speaker 1: and now by twenty twenty four it's one hundred and eleven,

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Speaker 1: so a lot fewer visas required simply to travel around

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Speaker 1: the world.

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Speaker 2: Yeah, it's certainly very interesting, particularly in the post pandemic

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Speaker 2: reflections on travel and relations in that area as well.

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Speaker 2: So that's one story that caught her eye this morning. Well,

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Speaker 2: let's get back to our top story and the reaction

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Speaker 2: to news that the SEC in the US has approved

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Speaker 2: exchange traded funds that a vest directly in bitcoin. We

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Speaker 2: saw the token briefly surpass forty seven thousand dollars and

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Speaker 2: a muted market response. Let's get the details now from

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Speaker 2: Sivastri Gosh, who is our Asia crypto reporters. Savactually, good

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Speaker 2: morning to you. Great to have you with us on

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Speaker 2: the program. It does look like looking at the market

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Speaker 2: reaction that the SEC move was already priced in. Talk

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Speaker 2: us through how markets reacted to the news of this approval.

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Speaker 9: Hi, good morning, nice to be here. Yes, you're right,

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Speaker 9: like a large part of the in fact, the entire

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Speaker 9: part of the much anticipated move was priced in by

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Speaker 9: the crypto markets, and we saw briefly, as you might

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Speaker 9: rightly mention, bitcoin moving a past forty seven thousand dollars,

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Speaker 9: but it trimmed some of its skins, largely because you know,

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Speaker 9: the sell on the news kind of trades that are

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Speaker 9: that are being seen now going ahead, we expect some

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Speaker 9: more corrections. Uh, that's what traders are telling us. And

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Speaker 9: that's because, uh, you know, the the biggest part of

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Speaker 9: the good news, the positive news, is out of the

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Speaker 9: way and there could be some profit taking going ahead,

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Speaker 9: is what we understand, unless there is a very big,

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Speaker 9: major unexpected positive news that comes in m.

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Speaker 1: So what do you think it means? Then a bitcoin

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Speaker 1: ETF longer term for bitcoin.

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Speaker 9: E t F, you know. So basically this is uh,

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Speaker 9: this is like democratization in a way of crypto right

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Speaker 9: where you can expect traditional traditional firms, institutions, banks, pension funds,

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Speaker 9: they typically invest through passive funds through ETFs, and uh,

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Speaker 9: these kind of funds who typically did not so far

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Speaker 9: directly by bitcoin or other crypto assets, might look at

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Speaker 9: these uh, these markets, the bitcoin, especially bitcoin through the

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Speaker 9: crypto the bitcoin spot atfs. That actually means that you know,

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Speaker 9: there could be wider adoption and the fees could come

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Speaker 9: down a lot, as we have seen anyway fee way

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Speaker 9: fee war wage. So yes, going ahead could be a

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Speaker 9: broader adoption. However, I would like to add that a

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Speaker 9: lot depends upon actually how much people believe that this

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Speaker 9: this market will last for a long time and therefore

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Speaker 9: invest their money in these funds, So that that's a

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Speaker 9: that's a caveat I need to uh add over here, and.

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Speaker 2: An important one as well. So actually I wonder if

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Speaker 2: we could just talk through a little bit of the

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Speaker 2: decision making process as well. What do we know about

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Speaker 2: why the set changed its mind and approved the CTF

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Speaker 2: when it had been opposed to it for such a

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Speaker 2: long time.

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Speaker 9: Exactly, you know, and so you're right, like for for

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Speaker 9: more than a decade, SEC has been opposing ETFs A,

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Speaker 9: spot tts, especially bitcoin spoty TFU. Of what happened was,

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Speaker 9: you know, in last August there was a there was

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Speaker 9: a code to a verdict in the US where SEC

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Speaker 9: lost a key legal fight against gray Scale Investments. Now Grayscale,

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Speaker 9: if I can just add a context, is the they

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Speaker 9: have the biggest fund bitcoin fund, and the case was

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Speaker 9: basically where Gray Scale wanted their twenty nine billion dollar

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Speaker 9: of gray Skill Bitcoin trust to be converted into an ETF,

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Speaker 9: so the which which the SEC was against. So the

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Speaker 9: court had quashed the SEC's you know opposition. That was

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Speaker 9: a main reason, one of the main reasons which SEC

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Speaker 9: Chairman Gary Chanceler Chanceller said today that yesterday rather that

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Speaker 9: you know, was a key reason for them to you know,

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Speaker 9: acquis and allow the ETF approvals.

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Speaker 1: Really, yeah, it's a bit a fascinating process, hasn't it,

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Speaker 1: And one that's been at the heart really of the

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Speaker 1: crypto industry for a long time. Thank you so much

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Speaker 1: for being with us. Suvastri Ghosh our Asia Crypto reporter,

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Speaker 1: then on the U s SEC approving bitcoin ETFs.

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Speaker 2: Now, the French President Emanuel Macron has gone to extraordinary

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Speaker 2: lengths to attract foreign capital to help revive the country's industry,

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Speaker 2: but behind the scenes, he's also extended the reach of

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Speaker 2: a secret of agency that's getting involved in any potential

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Speaker 2: investment perceived as a risk to sovereignty. Joining us now

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Speaker 2: for the details from Powers Bloomberg's economics reporter William Harbin. William,

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Speaker 2: good morning to you. This is agency is known as CISA.

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Speaker 2: What is it and what powers does it have?

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Speaker 4: Well, so he says, it's an acronym that French stands

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Speaker 4: for service book, strategic information and Economic security. It has

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Speaker 4: emission statement which is to detect, characterize, and handle threats

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Speaker 4: to France's economic sovereignty. Specifically, it says that those is

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Speaker 4: mitigating against threats to three things. That's strategic businesses, critical technologies,

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Speaker 4: research and research labs and institutions. Now you might ask

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Speaker 4: for some examples of these, and there are lists that

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Speaker 4: cover each of these categories, but actually keeps those secret.

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Speaker 1: Okay, So in terms of you're reporting, how has this

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Speaker 1: organization's job changed in recent years? What have been some

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Speaker 1: of their actions?

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Speaker 4: Well, integration in twenty sixteen CSA themes of steady increasing activities,

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Speaker 4: but there was a particularly sharp acceleration after the COVID pandemic.

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Speaker 4: And it sort of counts a number of alerts that

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Speaker 4: it deals with every year, and they've that's the trouble

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Speaker 4: to about nine last year. So what happens when it

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Speaker 4: gets an alert It sort of acts as a control

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Speaker 4: tower for the whole of the French state. For example,

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Speaker 4: it could organize the task course it identifies a risk

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Speaker 4: to depth of sensitive data in the case of a

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Speaker 4: hostile move device strategic it will coordinate the action of

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Speaker 4: other parts of the state, look for alternative buyers potentially

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Speaker 4: if the threat is deemed to be material, or advise

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Speaker 4: companies on how deals need to be changed or approved

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Speaker 4: or whether they might be whether where they could be blocked.

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Speaker 4: It can't actually doesn't have powers to block outright, but

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Speaker 4: it has a very strong dissuasive threat because it can

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Speaker 4: make recommendations to the Finance minister who can arbitrate in

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Speaker 4: any potential deal. As well as well as having sort

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Speaker 4: of officials in Paris, it also has agents around the country.

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Speaker 4: We're gathering into economic intelligence on the ground in a

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Speaker 4: more white gross gaale.

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Speaker 2: So this increased scrutiny by CSA is coming at the

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Speaker 2: same time that Emmanuel Macrar is trying to open up

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Speaker 2: France to foreign investors. How do those two objectives, or

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Speaker 2: those two trends marry.

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Speaker 4: And screening process might seem a bit intimidating, but Cecily

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Speaker 4: is actually also there to make the process easier. Official

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Speaker 4: say companies increasingly are coming to them to get buy

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Speaker 4: some what's possible and what's not that can potentially make

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Speaker 4: huge savings due divisions fees or legal fees. And she

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Speaker 4: You know, some officials say that, you know, this sort

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Speaker 4: of clearer landscape makes frants a more attractive to it.

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Speaker 4: You know that they've become at the same time more cautious.

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Speaker 4: And as I said, during the pandemic, they said, devolucer

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Speaker 4: investors who were with deep pockets coming for abroad, who

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Speaker 4: are instead of hovering there but for looking at French

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Speaker 4: companies from his valuation temperature in the lockdowns.

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