WEBVTT - Powell Signals Fed Will Raise Rates If Needed 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:23.120 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio Blacks. 0:00:33.760 --> 0:00:36.839 All right, nobody does it? I gotta say, just listening 0:00:37.080 --> 0:00:39.880 to our Mike McKee, he's got to be the hardest 0:00:39.880 --> 0:00:43.599 working man in economics. Is cowboy hat and all love it? 0:00:44.280 --> 0:00:47.520 I do too, but just interview after interview, really trying 0:00:47.560 --> 0:00:49.040 to get to the heart of what's going on in 0:00:49.040 --> 0:00:52.720 the economy and what it means for US monetary policy. 0:00:52.880 --> 0:00:56.960 He has spoken with several members of the FED and 0:00:57.120 --> 0:01:00.240 FED Central Banks, if you will, or FED Regional I 0:01:00.240 --> 0:01:03.080 should say, in today alone. So let's get right to him. 0:01:03.120 --> 0:01:06.720 Because Bloomberg News International Economics and Policy correspondent Michael McKee 0:01:06.800 --> 0:01:11.640 sans hat what happened there at the Jackson Hall Economic 0:01:11.720 --> 0:01:15.080 Policy Symposium. Mike, good to have you here. I am 0:01:15.080 --> 0:01:17.720 in awe. I usually am anyway, but man, you've just 0:01:17.760 --> 0:01:20.800 been having one conversation after another. But let's start with 0:01:20.880 --> 0:01:25.760 Jay Powell. What sounded very familiar to you? What sounded 0:01:25.840 --> 0:01:27.839 that like, maybe it's some new news. 0:01:29.760 --> 0:01:32.880 I didn't think anything really sounded new. What he did 0:01:33.000 --> 0:01:36.360 was sort of restructure it what he has said before 0:01:36.760 --> 0:01:39.560 in an effort to sort of give it a hawkish tilt. 0:01:40.000 --> 0:01:43.520 It's sort of a message to the bond market, don't 0:01:43.520 --> 0:01:45.920 get carried away. We still have more work to do, 0:01:46.319 --> 0:01:47.640 and we're. 0:01:47.440 --> 0:01:48.040 Going to do it. 0:01:48.080 --> 0:01:51.160 And if we needed to raise rates again, and if 0:01:51.200 --> 0:01:54.400 we needed to risk a recession, we would do that. 0:01:54.720 --> 0:01:56.640 But right now it doesn't look like that. Things look 0:01:56.680 --> 0:01:57.200 pretty good. 0:01:57.560 --> 0:01:59.880 Was there anything he didn't say or leave out that 0:02:00.200 --> 0:02:01.680 you think is notable? 0:02:04.160 --> 0:02:07.120 No, But what I did think was interesting was when 0:02:07.160 --> 0:02:09.760 he said that we don't know what the neutral rate 0:02:10.000 --> 0:02:13.440 is and he said we are going to keep two 0:02:13.520 --> 0:02:14.840 percent as our target. 0:02:14.880 --> 0:02:16.040 That's not going to change. 0:02:16.240 --> 0:02:17.960 Those are two of the things that had been talked 0:02:17.960 --> 0:02:21.200 about on Wall Street Global Wall Street really as things 0:02:21.200 --> 0:02:23.960 that he might talk about or that the FED might change. 0:02:24.400 --> 0:02:28.240 And he was at pains to basically say I heard you, 0:02:28.360 --> 0:02:29.040 and you're wrong. 0:02:29.480 --> 0:02:31.160 And those were direct. 0:02:30.800 --> 0:02:33.200 Messages to people who think that the FED might be 0:02:33.240 --> 0:02:34.560 adjusting its policy. 0:02:34.800 --> 0:02:36.720 So no, two percent is it and we're going to 0:02:36.800 --> 0:02:38.680 get there. That's basically his point. 0:02:40.200 --> 0:02:42.359 That's basically his point, and they're going to keep the 0:02:42.400 --> 0:02:44.520 pressure on. Now what does that mean. Does it mean 0:02:44.520 --> 0:02:47.200 they have to raise rates again? They don't know, but 0:02:47.280 --> 0:02:49.680 he said they're prepared to if necessary. It could also 0:02:49.840 --> 0:02:52.000 just mean that they keep rates where they are for 0:02:52.040 --> 0:02:55.000 a very long time into twenty twenty four in order 0:02:55.080 --> 0:02:57.359 to ensure they're getting back down to two percent. 0:02:57.560 --> 0:02:58.040 Mike, what I. 0:02:58.080 --> 0:03:01.200 Wonder is at an event like this where there is 0:03:01.200 --> 0:03:03.720 obviously J. Powell and he's one of the stars, if 0:03:03.720 --> 0:03:05.280 you will, for lack of a better word, you've got 0:03:05.320 --> 0:03:08.720 Christine Lagard another one, and then of course you've got 0:03:08.840 --> 0:03:11.600 you know, the FED presidents that you've been speaking to 0:03:11.720 --> 0:03:16.320 and others. What are the kind of conversations that they 0:03:16.400 --> 0:03:18.440 have that you are aware of, Like, what is it 0:03:18.480 --> 0:03:21.480 that they are trying to learn from one another in 0:03:21.520 --> 0:03:22.760 an environment like today. 0:03:24.760 --> 0:03:27.560 Well, there's a lot of discussion about the unusual situation 0:03:27.720 --> 0:03:31.560 we find ourselves in the global economy, the idea that 0:03:31.639 --> 0:03:35.760 we are seeing inflation that went so high so fast 0:03:35.840 --> 0:03:40.000 because of supply disruptions. Now those supply disruptions are starting 0:03:40.000 --> 0:03:44.320 to normalize, but we are still seeing elevated inflation and 0:03:44.360 --> 0:03:48.680 no impact on unemployment. Labor markets are strong everywhere. I've 0:03:48.720 --> 0:03:50.840 been talking to a lot of the European central bankers 0:03:50.880 --> 0:03:52.520 and that's one of the first things they say is 0:03:52.840 --> 0:03:56.320 labor markets remain very tight, and that's not how it's 0:03:56.360 --> 0:03:59.960 supposed to work when central banks raise interest rates that high. 0:04:00.360 --> 0:04:01.960 So there's a lot of talk about what's going on 0:04:02.000 --> 0:04:04.520 in labor markets and why we're seeing what we're seeing. 0:04:04.520 --> 0:04:08.400 There's a kind of a gentle feeling that the pandemic reset. 0:04:08.440 --> 0:04:09.920 Expectations for workers. 0:04:09.960 --> 0:04:13.680 Some of them retired more early than they otherwise would. 0:04:13.960 --> 0:04:17.080 Some don't have the social safety net to enable them 0:04:17.120 --> 0:04:19.640 to get back to work, which means there are openings 0:04:19.680 --> 0:04:23.040 out there still, and that gives them hope that we're 0:04:23.080 --> 0:04:25.760 going to still see strong labor markets. But we're going 0:04:25.800 --> 0:04:28.680 to see and that'll mean strong growth, but we're not 0:04:28.720 --> 0:04:30.360 going to see it be inflationary. 0:04:30.880 --> 0:04:33.360 There's been so much chatter too about the debate within 0:04:33.400 --> 0:04:35.400 the Federal Reserve about where do we go from here. 0:04:35.600 --> 0:04:39.800 Based on your conversations with Federal Reserve officials, how divergent 0:04:39.839 --> 0:04:41.560 do their opinions seem to you? 0:04:43.880 --> 0:04:46.279 Well, I have to say that after Pile's speech, nobody 0:04:46.360 --> 0:04:49.560 changed their minds. We did speak with Patrick Harker, who 0:04:49.560 --> 0:04:52.480 thinks that things should be on hold, and Lorettamester, who 0:04:52.480 --> 0:04:57.120 thinks that things should they should have to raise rates again. Basically, 0:04:57.160 --> 0:05:00.720 it's a question of tactics. Do you raise rates a 0:05:00.760 --> 0:05:03.440 little bit more or do you just sit and wait 0:05:03.520 --> 0:05:05.600 and see what the impact of the lagged effects of 0:05:05.640 --> 0:05:08.719 what you've already done is. And that's what the debate 0:05:08.839 --> 0:05:11.560 is for them. But even those like Mester who think 0:05:11.600 --> 0:05:14.600 that probably another rate increase is justified, she said she's 0:05:14.640 --> 0:05:16.960 willing to change her mind if the data come in 0:05:17.000 --> 0:05:20.080 and show that inflation is still going down and they 0:05:20.120 --> 0:05:22.880 have these two inflation reports before we get to the 0:05:22.880 --> 0:05:23.719 next FED meeting. 0:05:23.920 --> 0:05:26.240 Hey, Mike, it was hard to pick a SoundBite from 0:05:26.240 --> 0:05:28.760 all the interviews incredible interviews you're doing, but we did 0:05:28.839 --> 0:05:32.599 do just that. Here's just a little snippet of Mike's 0:05:32.640 --> 0:05:35.560 conversation with Philadelphia Fed President Pat Harker, who definitely had 0:05:35.600 --> 0:05:38.120 a point of view when it comes to monetary policy. 0:05:39.080 --> 0:05:43.359 At this point, we really need to see inflation moving down, 0:05:43.920 --> 0:05:45.880 and we're seeing early signs of that, but I want 0:05:45.880 --> 0:05:47.440 to keep rates where they are right now, and then 0:05:47.480 --> 0:05:49.920 we'll decide later what we do all right. 0:05:50.000 --> 0:05:52.760 So that's Pat Harker obviously president of the Philadelphia Fed, 0:05:52.800 --> 0:05:55.880 so he wants to keep rates here. It's interesting, Matt, 0:05:56.360 --> 0:06:01.159 Mike Brother, how do you think about last year, the conversations, 0:06:01.160 --> 0:06:03.480 the themes that trends versus this year. 0:06:05.760 --> 0:06:07.480 It's kind of interesting because I've talked to a couple 0:06:07.560 --> 0:06:09.920 of central bankers who said the same thing. We're in 0:06:09.960 --> 0:06:13.719 a difficult situation for them because last year they could 0:06:13.760 --> 0:06:15.599 come here and say we're going to raise rates, no 0:06:15.720 --> 0:06:19.200 question about it. Markets don't price in any kind of easing. 0:06:19.360 --> 0:06:21.640 We've got a long way to go with inflation. Now 0:06:21.680 --> 0:06:26.120 you've got this ambiguous situation. Do we have to raise 0:06:26.200 --> 0:06:29.279 rates more or do we just sit where we are? 0:06:29.400 --> 0:06:31.880 And the economy is giving us mixed messages on that. 0:06:32.360 --> 0:06:34.880 So there is a big change in tone and emphasis 0:06:34.920 --> 0:06:37.440 here from last year. But there's also been a big 0:06:37.560 --> 0:06:42.279 change in the data. Inflation's come way down, unemployment hasn't moved, 0:06:42.560 --> 0:06:45.320 and growth, as the chairman said, is stronger than expected. 0:06:45.560 --> 0:06:48.480 You mentioned how much inflation has come down the past year. 0:06:48.520 --> 0:06:50.839 What about in Jackson Hall? Are things expensive? Are they 0:06:50.920 --> 0:06:51.800 cheaper than last year? 0:06:51.839 --> 0:06:53.000 What are you noticing. 0:06:55.080 --> 0:06:58.520 They are more expensive than last year. Somebody noticed that 0:06:59.800 --> 0:07:03.520 the Pioneered Grill, Tom Keane's favorite to stop here has 0:07:03.800 --> 0:07:08.000 raised its prices somewhat. Jackson is also kind of a 0:07:08.040 --> 0:07:12.120 more expensive place. It's become very much a tourist destination 0:07:12.320 --> 0:07:15.240 in the summer, so you do see that impact. But 0:07:15.280 --> 0:07:18.680 I think you're seeing here what you have seen everywhere. 0:07:18.760 --> 0:07:21.320 Prices went up. Now the question is do they keep 0:07:21.360 --> 0:07:24.800 going up or have they recouped costs and now they 0:07:24.800 --> 0:07:27.440 can keep things steady. I guess we'll just have to 0:07:27.480 --> 0:07:29.160 come back next year and find out. 0:07:31.200 --> 0:07:32.520 Managers, are you listening? 0:07:33.640 --> 0:07:37.120 And we do have obviously a batch of inflation coming up, 0:07:37.160 --> 0:07:39.720 as you know with the pc next week we have 0:07:39.760 --> 0:07:42.080 CPI on the thirteenth, But what do you think is 0:07:42.480 --> 0:07:44.800 is that enough? Depending on what that data tells us 0:07:44.880 --> 0:07:48.960 to make a divergent decision. Once we get that rate 0:07:49.040 --> 0:07:51.280 decision on September twentieth. 0:07:52.800 --> 0:07:54.280 We'll forget what we're expecting. 0:07:54.360 --> 0:07:57.640 It probably means the Fed pauses again, and those who 0:07:57.720 --> 0:07:59.880 think we need higher rates are probably. 0:07:59.480 --> 0:08:02.640 Willing to go along with that. They'll put their sites. 0:08:02.680 --> 0:08:07.360 On November we should see a slight rise in the 0:08:07.360 --> 0:08:12.200 CPI and the PCE because of base effects and energy 0:08:12.240 --> 0:08:14.800 prices going up. The interesting thing to look at is 0:08:14.840 --> 0:08:19.160 going to be the core pce X housing the J 0:08:19.400 --> 0:08:22.800 Powell Indicator, which he talked about today as still being 0:08:22.920 --> 0:08:25.480 too high. So do we see further progress in that 0:08:25.520 --> 0:08:28.120 coming down or does that level out or does that 0:08:28.280 --> 0:08:32.000 actually go up? That would be maybe a warning signal 0:08:32.080 --> 0:08:36.280 for November. But I think if we see very little change, 0:08:36.320 --> 0:08:38.720 even if it's up a little bit, we're not going 0:08:38.760 --> 0:08:41.480 to see much happen in the September meeting. 0:08:41.520 --> 0:08:44.559 Hey, Mike was a little funky when in conclusion in 0:08:44.640 --> 0:08:47.280 Jay Powell's prepared remarks, he said, as is often the case, 0:08:47.559 --> 0:08:51.600 we are navigating by the stars under cloudy skies. It 0:08:51.840 --> 0:08:55.079 just felt like a little woo wooed to me. Mohammed 0:08:55.080 --> 0:08:57.120 el Aian on Blomberg TV kind of brought you know, 0:08:57.320 --> 0:09:00.319 brought that out, but it was kind of pointing out 0:09:00.480 --> 0:09:02.240 there's a lot of things going on globally that are 0:09:02.240 --> 0:09:03.120 beyond our control. 0:09:05.240 --> 0:09:08.880 Yeah, this is one of those things like the Grateful Dead. 0:09:08.960 --> 0:09:12.240 If you have been a fan for a long time, yes, 0:09:12.480 --> 0:09:13.199 that line. 0:09:13.559 --> 0:09:17.160 That line came from his twenty eighteen speech here at 0:09:17.280 --> 0:09:21.000 Jackson Hole. His first speech here as chairman when he 0:09:21.120 --> 0:09:24.640 talked about the various star measures our star and U star, 0:09:25.000 --> 0:09:27.120 and he was making the point at that time that 0:09:27.400 --> 0:09:30.160 since we really don't have a way of knowing what 0:09:30.200 --> 0:09:33.000 those numbers are, it's kind of hard to set your 0:09:33.040 --> 0:09:37.839 policy by an our star. And so he's referring back 0:09:38.559 --> 0:09:41.920 to the same thing he said some time ago, six 0:09:42.000 --> 0:09:45.480 years ago now, I think, and for those of us 0:09:45.520 --> 0:09:47.160 who've been here for a long time, it was kind of. 0:09:47.160 --> 0:09:49.200 Funny, all right, hey, also kind of funny. I'm going 0:09:49.200 --> 0:09:51.640 through my social media on Twitter, x whatever you want 0:09:51.640 --> 0:09:53.800 to call it, you chatting with the fed chare hot 0:09:53.840 --> 0:09:57.199 and all. Did he like the hat? We we're putting 0:09:57.200 --> 0:09:59.720 it up on everybody on YouTube and Bloomberg originals. Did 0:09:59.720 --> 0:10:00.520 he like the hat? 0:10:02.240 --> 0:10:03.160 He liked the hat. 0:10:03.679 --> 0:10:06.920 And I offered him the hat for his speech today 0:10:07.160 --> 0:10:09.400 because I told him people were worried that if I'm 0:10:09.440 --> 0:10:12.360 wearing the hat on TV, they're looking at the hat 0:10:12.440 --> 0:10:13.800 instead of listening to what I'm saying. 0:10:13.800 --> 0:10:15.120 And I said that could work for you. 0:10:15.679 --> 0:10:18.400 Everybody talk about the hat Joy Powell was wearing, and 0:10:18.440 --> 0:10:20.640 they won't be worried about what you had to say. 0:10:20.880 --> 0:10:24.280 He declined, Well, listen, great stuff as always, You men 0:10:24.640 --> 0:10:26.360 have earned it this week in a big way. And 0:10:26.440 --> 0:10:30.320 for anybody who's missed any of Mike's conversations, all you 0:10:30.360 --> 0:10:34.679 have to do is head to Bloomberg Talks our podcast feed, 0:10:34.760 --> 0:10:36.960 download it wherever you get your podcast. Michael McKee, you're 0:10:36.960 --> 0:10:40.120 a jem hat no hat Bloomberg News International Economics and 0:10:40.120 --> 0:10:45.319 Policy correspondent, Michael McKee, safe travels joining us from Jackson, Whole, Wyoming. 0:10:45.640 --> 0:10:48.400 You are listening and watching Bloomberg Business Week on this Friday, 0:10:48.440 --> 0:10:51.440 Carol Master, Looad, just Mettin and for Tim Staneveck, this 0:10:51.559 --> 0:10:52.199 is Bloomberg. 0:10:53.160 --> 0:10:56.760 You're listening to the Bloomberg Business Week podcast. Catch us 0:10:56.760 --> 0:11:00.720 live weekday afternoons from three to six Eastern on Bloomberg 0:11:00.760 --> 0:11:04.240 dot Com, the iHeartRadio app, and the Bloomberg Business App, 0:11:04.520 --> 0:11:07.960 or want us live on YouTube. 0:11:08.400 --> 0:11:11.440 On the Bloomberg. Just came across a story today about 0:11:11.440 --> 0:11:14.320 how JP Morgan Chase basically weighing in on the crypto 0:11:14.360 --> 0:11:16.800 world today saying the recent sell off in crypto markets 0:11:16.840 --> 0:11:20.120 is likely near an end, with long position liquidations quote 0:11:20.200 --> 0:11:23.400 largely behind us. This was a research report by JP 0:11:23.480 --> 0:11:27.080 Morgan Chase, and yet they are making note that while 0:11:27.120 --> 0:11:29.760 regulatory and legal issues seem to be waning at least 0:11:29.760 --> 0:11:32.679 for now, still to come quote a new round of 0:11:32.760 --> 0:11:36.640 legal uncertainty for crypto markets. And so you know more 0:11:36.679 --> 0:11:39.600 on jpm's call, you can find it on the Bloomberg. 0:11:39.880 --> 0:11:42.400 But it's been a very interesting we know the carnage 0:11:42.440 --> 0:11:46.240 right that we saw certainly earlier in the year, certainly 0:11:46.760 --> 0:11:50.200 over the last year, and a real rethink on crypto. 0:11:50.640 --> 0:11:52.880 And one of the things that many would argue and 0:11:52.920 --> 0:11:54.560 point to is that we've got to figure out the 0:11:54.600 --> 0:11:56.079 regulatory side of everything. 0:11:56.160 --> 0:11:58.120 And that's always been the big question mark about what's 0:11:58.160 --> 0:12:01.320 ahead and how it does impact for twoicular companies that 0:12:01.360 --> 0:12:03.800 are in that industry and especially investors on where do 0:12:03.840 --> 0:12:05.240 you go from here when you're trying to invest in 0:12:05.280 --> 0:12:06.160 something so vulnerable. 0:12:06.240 --> 0:12:08.120 Well, yeah, you want transparency and you're right sure you 0:12:08.200 --> 0:12:10.960 understand the rules. So let's get into a little bit 0:12:10.960 --> 0:12:13.120 more of the regulatory side of crypto. Back with us 0:12:13.160 --> 0:12:16.439 is Mike Belshe, entrepreneur, scientist, one of the first ten 0:12:16.480 --> 0:12:20.959 engineers on the Google Chrome team, so really is a 0:12:21.000 --> 0:12:23.360 forward thinker, if you will, when it comes to our 0:12:23.400 --> 0:12:26.719 evolving tech space and just how tech is kind of 0:12:26.800 --> 0:12:29.960 invading everything we do early on in the more it 0:12:30.000 --> 0:12:32.640 developed crypto space as well. He's co founder and CEO Bitco. 0:12:33.080 --> 0:12:36.520 They provide security and operational support to global institution clients, 0:12:36.520 --> 0:12:39.920 so he's a good worldwide perspective. Joining us as we 0:12:39.960 --> 0:12:43.120 do every week at this time our weekly look at crypto. 0:12:43.240 --> 0:12:46.000 He is on Zoom in San Francisco. Mike, Hey, nice 0:12:46.000 --> 0:12:48.520 to have you back with us. How are you. 0:12:50.080 --> 0:12:52.360 Doing great? Thank you, Carol, Thanks triving me back. I 0:12:52.360 --> 0:12:53.600 appreciate it. Always good to talk to you. 0:12:53.760 --> 0:12:55.960 Well, we appreciate it as well. First of all, I 0:12:56.000 --> 0:12:58.520 just want to get an idea of remind everybody what 0:12:58.600 --> 0:13:00.600 you do, a kind of your vantage point. I always 0:13:00.640 --> 0:13:02.840 like to kind of set the stage for everybody, and 0:13:02.880 --> 0:13:05.360 I feel like those who are in it can describe 0:13:05.400 --> 0:13:07.360 it best. And then just kind of the level of 0:13:07.400 --> 0:13:09.880 activity and demand that you're seeing for your services in 0:13:09.880 --> 0:13:13.400 today's environment, and maybe how it compares to the peak 0:13:14.040 --> 0:13:16.760 of let's say bitcoin sixty eight thousand back in November 0:13:16.760 --> 0:13:19.880 of twenty twenty one. How has the perspective changed. 0:13:21.080 --> 0:13:24.800 Sure, Well, you introduced me as a technologist, which is true. 0:13:24.840 --> 0:13:28.280 That's my thirty year background all the way back to 0:13:28.360 --> 0:13:31.560 Netscape a long time ago, but these days actually technically, 0:13:31.600 --> 0:13:34.280 I guess I'm more of a banker. So Bitco is 0:13:34.400 --> 0:13:37.240 a digital asset custodian kind of the first of its 0:13:37.320 --> 0:13:39.920 kind that was built I think seven or eight years ago. 0:13:40.200 --> 0:13:43.600 We actually run four different trust companies across the globe today. 0:13:43.720 --> 0:13:46.360 We've got in New York DFS, We've got South Dakota 0:13:46.440 --> 0:13:50.080 in the US, We've got Switzerland. We've got a often 0:13:50.160 --> 0:13:53.319 regulated Nstey in Germany as well. So we run a 0:13:53.360 --> 0:13:56.880 lot of custody. And it started with a high tech 0:13:57.000 --> 0:14:01.400 wallet platform. We pioneered how to do secure storage digital 0:14:01.400 --> 0:14:04.960 assets long ago, eliminating single points of failure. And the 0:14:05.000 --> 0:14:07.480 reality is you can't build a reliable banking system if 0:14:07.480 --> 0:14:09.520 you don't have a great foundation. So that's what we 0:14:09.559 --> 0:14:12.280 aimed out to do in the In the beginning, we 0:14:12.280 --> 0:14:14.599 start up with technology, we moved into custody. This is 0:14:14.640 --> 0:14:17.040 where we take all the keys in are regulated qualified 0:14:17.040 --> 0:14:20.640 custodian bankruptcy remote way. And then these days we're actually 0:14:20.640 --> 0:14:22.120 moving on to the next level, which is really how 0:14:22.120 --> 0:14:24.240 do we build the market structure? And of course you 0:14:24.320 --> 0:14:26.760 hear about a lot of lawsuits going on in the 0:14:26.760 --> 0:14:30.040 industry from regulators against certain players that are already in play. 0:14:30.320 --> 0:14:33.160 You hear new proposals about how to regulate or how 0:14:33.200 --> 0:14:35.960 to structure the markets for crypto should be under the 0:14:35.960 --> 0:14:39.400 CFTC or the SEC. Bicco's trying to push on that too. 0:14:39.920 --> 0:14:43.480 Even despite some of the crypto regulatory concerns that are 0:14:43.480 --> 0:14:45.440 out there, you were still able to raise one hundred 0:14:45.440 --> 0:14:49.760 million dollars in seriess funding. How tough is it right 0:14:49.800 --> 0:14:51.440 now to try to raise funding. 0:14:53.520 --> 0:14:56.840 Well, I don't like to sound like a brag or anything, 0:14:57.320 --> 0:15:01.800 but it's brutal out there is probably the right answer. 0:15:02.240 --> 0:15:04.200 So why wasn't it brutal for you? 0:15:06.080 --> 0:15:08.680 Well, I hope to say that. You know, bicco's achieved 0:15:08.680 --> 0:15:11.600 a level of success and excitement kind of on the 0:15:11.600 --> 0:15:13.760 go forward basis. So look, our existing products have been 0:15:13.800 --> 0:15:16.320 working well. There's been a big flight to safety just 0:15:16.360 --> 0:15:19.040 given all the concerns of the last year. You know, 0:15:19.040 --> 0:15:22.520 there are a lot of failures on other parties in 0:15:22.520 --> 0:15:25.360 the ecosystem, so people are looking for somebody that's doing 0:15:25.360 --> 0:15:28.240 it right. BICKA has always taken a tried and true approach. 0:15:28.600 --> 0:15:31.040 We operate custody is the core of what we do. 0:15:31.560 --> 0:15:35.080 Custody is a different element than trading. You know, we 0:15:35.280 --> 0:15:37.440 tend to not have any issues like with what's going 0:15:37.440 --> 0:15:39.760 on with with other folks with with their entanglements with 0:15:39.800 --> 0:15:41.760 the SEC because what we're doing is holding assets on 0:15:41.800 --> 0:15:44.800 behalf of clients and then on the go forward basis. 0:15:45.120 --> 0:15:47.480 You know, people are excited about the market structure we're building. 0:15:47.520 --> 0:15:49.840 We announced this thing called the Go Network, which is 0:15:49.880 --> 0:15:52.120 basically introducing the first time where we can start to 0:15:52.120 --> 0:15:55.960 have a settlement distinct from trading, distinct from custody, so 0:15:56.000 --> 0:15:59.000 that you can start to have safe landing of assets, 0:15:59.080 --> 0:16:01.280 keep everything in cold Star origin, yet still have access 0:16:01.280 --> 0:16:01.920 to full equting. 0:16:02.000 --> 0:16:03.800 Well, then let me go back to how I started MIC. 0:16:03.880 --> 0:16:06.320 So what's what's the level of activity and demand? I 0:16:06.360 --> 0:16:09.760 get it, it's like the regular, you know, traditional financial system, right, 0:16:09.800 --> 0:16:15.240 you have your custodians that are out there for financial acids, 0:16:15.240 --> 0:16:17.480 if you will, And so I'm just curious what's the 0:16:17.560 --> 0:16:20.640 level of activity and demand for your services, specifically in 0:16:20.640 --> 0:16:22.800 the crypto world, and how it compares to I guess 0:16:23.080 --> 0:16:25.120 I'm using November of twenty twenty one as a peak 0:16:25.120 --> 0:16:27.560 because that's when bigcoin was so high, and maybe that's 0:16:27.560 --> 0:16:30.600 just a random point, but I'm just curious what you've seen. 0:16:30.800 --> 0:16:33.960 Where are we How would you kind of quantify it 0:16:34.160 --> 0:16:34.920 or describe it? 0:16:36.800 --> 0:16:39.000 Well, I mean the markets are a little bit down, right, 0:16:39.000 --> 0:16:41.480 So as a financial institution, I mean, you know, the 0:16:41.520 --> 0:16:44.360 market prices are down. So our assets under custody, you know, 0:16:44.440 --> 0:16:47.480 they were up. I think we advertised up over sixty 0:16:47.520 --> 0:16:49.200 four billion in a UC. I think it was at 0:16:49.200 --> 0:16:52.080 the end of twenty twenty one. Our assets are down 0:16:52.120 --> 0:16:54.720 today because their marks to a lower value against the 0:16:54.800 --> 0:16:57.400 US dollar. But we haven't lost the coins. The coins 0:16:57.400 --> 0:16:58.680 are all still in custody, so. 0:16:58.600 --> 0:17:01.720 It's just a value decline, not the actual coin itself. 0:17:02.800 --> 0:17:05.080 Right. As soon as you know Americans start measuring their 0:17:05.080 --> 0:17:07.600 wealth in BTC instead of a USD, we'll all be 0:17:07.640 --> 0:17:08.440 on the same page. 0:17:09.480 --> 0:17:13.080 Talk to us about who your customers are, because I 0:17:13.119 --> 0:17:15.160 was surprised also to see Nike on that list. 0:17:16.760 --> 0:17:20.880 Sure, I mean, we're a business to business and institutional players, 0:17:20.880 --> 0:17:22.720 so we don't hit retail a lot. There's some high 0:17:22.760 --> 0:17:27.080 network individuals, but you know, funds use US, exchanges use US, 0:17:27.080 --> 0:17:31.520 payment processors use US. And then when you mentioned Nike, 0:17:31.720 --> 0:17:34.439 you know corporates are using US now Nike in particular, 0:17:35.880 --> 0:17:38.480 they happen to be integrating with the NFT in some 0:17:38.520 --> 0:17:40.480 of the DeFi space. So soon as you start talking 0:17:40.480 --> 0:17:44.080 about digital assets, we're unlocking not just you know, cryptocurrency, 0:17:44.359 --> 0:17:46.919 not just token is securities, not just stable coins. But 0:17:46.960 --> 0:17:49.080 actually there's this other world as well of you know, 0:17:49.480 --> 0:17:53.360 non fungible tokens, which is basically digital property. And if 0:17:53.359 --> 0:17:57.199 you think about how technology has emerged, like with protecting 0:17:57.320 --> 0:17:59.639 you know, digital property rights over the last you know, 0:17:59.640 --> 0:18:02.520 twenty f five years, there's been a lot of different approaches, 0:18:02.560 --> 0:18:06.280 but I think NFTs are actually the first true digital 0:18:06.320 --> 0:18:09.480 acid property that they can be used. So anyway, Nike's 0:18:09.480 --> 0:18:11.040 big on that space that we're helping them with a 0:18:11.080 --> 0:18:12.280 number of number of efforts. 0:18:12.359 --> 0:18:14.520 Are more companies doing that? That's where I kind of 0:18:14.560 --> 0:18:18.720 get the blockchain and kind of digital world in terms 0:18:18.840 --> 0:18:23.040 of when you think about digital property and whether it's 0:18:23.960 --> 0:18:27.320 intellectual property or things that you really want to kind 0:18:27.320 --> 0:18:31.480 of have if you will, almost an address you know 0:18:31.600 --> 0:18:34.800 that goes with them constantly. And so there's no question, 0:18:34.960 --> 0:18:38.040 So are we seeing more companies like Nike tap into 0:18:38.320 --> 0:18:39.400 you specifically? 0:18:41.359 --> 0:18:43.520 There are, yes, there are a bunch of major brands 0:18:43.520 --> 0:18:45.399 that are all interested in figuring out how do they 0:18:45.440 --> 0:18:50.159 really show that the assets that they create are are 0:18:50.480 --> 0:18:52.880 bona fide and real. So you see this from top 0:18:52.960 --> 0:18:55.560 designer brands. There's been a number of initiatives where they 0:18:55.560 --> 0:18:57.679 are looking to use NFTs as wells say this is 0:18:58.240 --> 0:19:01.919 a true designer product as opposed to a knockoff. And 0:19:01.960 --> 0:19:04.560 then you've got you know, loyalty programs that are being built, 0:19:04.600 --> 0:19:06.840 You've got gaming programs that are being built. So there's 0:19:06.840 --> 0:19:09.280 been a lot of growth in the NFT space. So 0:19:09.600 --> 0:19:12.920 for Bicco, you know, as a custodian and a wallet provider, 0:19:13.320 --> 0:19:15.480 you know, a lot of times these early industries, like 0:19:15.520 --> 0:19:19.040 the value of the things that they're trading are relatively small, 0:19:19.480 --> 0:19:21.960 but as they grow those businesses and they grow their demand, 0:19:21.960 --> 0:19:23.960 it grows a lot. And you know, what does what 0:19:24.040 --> 0:19:26.000 does a bank do? What does a custodian do? Well, 0:19:26.040 --> 0:19:27.639 we're here to make sure that you give us the 0:19:27.640 --> 0:19:29.040 assets and we're going to give them back to you 0:19:29.040 --> 0:19:31.680 when you want them. And as the value goes up, 0:19:31.760 --> 0:19:34.119 you use higher and higher levels of security to protect it. 0:19:34.240 --> 0:19:37.439 So Bicco's building a full stack everywhere, from the bottom 0:19:37.480 --> 0:19:39.840 layer of pure technology security to the next layer of 0:19:39.880 --> 0:19:41.680 how do you cuss they in a regulated, safe way, 0:19:41.960 --> 0:19:44.840 and then above that building liquiditysources, you know, having insurance 0:19:44.840 --> 0:19:45.960 backups and things like that. 0:19:46.119 --> 0:19:48.679 So, Mike, when it comes to a regulatory environment, what 0:19:48.840 --> 0:19:51.359 is it that you are looking for. Is it a 0:19:51.400 --> 0:19:55.480 decision on spot bitcoin ETF? Is it the ripple decision? 0:19:55.640 --> 0:19:58.720 What is it for you that you think is significant? 0:20:00.080 --> 0:20:04.800 Well, what matters to all of us actually is safe 0:20:04.880 --> 0:20:07.119 understanding of the risks that will be being taken by 0:20:07.160 --> 0:20:11.200