WEBVTT - Musk Stalls on Massive Tesla Plant, Stoking Caution in Mexico 0:00:01.360 --> 0:00:05.720 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 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.280 --> 0:00:24.480 Tesla moving over sharp turn, there's settling on the Nueva 0:00:24.560 --> 0:00:29.120 Leon site in northern Mexico for its next massive car plant. 0:00:29.200 --> 0:00:33.320 Only nine months ago, politicians and executives actually hailed it 0:00:33.520 --> 0:00:37.440 as a paragon of near shoring, the idea that international 0:00:37.440 --> 0:00:40.479 companies will set up much more of their production in 0:00:40.560 --> 0:00:43.040 Mexico to be closer to the US. Tim So the 0:00:43.040 --> 0:00:46.400 company investment in the country is expected to reach about 0:00:46.400 --> 0:00:51.720 ten billion dollars over multiple phases. But construction of this factory, 0:00:51.760 --> 0:00:55.000 which had been slated to make Tesla it's cheaper next 0:00:55.040 --> 0:00:59.080 generation vehicles, is delayed due to Elon Musk's misgivings about 0:00:59.080 --> 0:01:02.400 the global economy. Other problems, including permitting delays and a 0:01:02.600 --> 0:01:06.840 dearth of infrastructure, have plagued the process. So joining us 0:01:06.880 --> 0:01:09.119 to walk us through some of these issues here. Amy 0:01:09.160 --> 0:01:12.720 Stillman is Bloomberg News Mexico business reporter, and she spoke 0:01:12.760 --> 0:01:16.600 to some locals who are now lowering their expectations as 0:01:16.600 --> 0:01:19.919 the carmaker has held off on starting construction. So Amy 0:01:19.959 --> 0:01:23.479 is joining us on Zoom from Mexico City walk us 0:01:23.520 --> 0:01:26.120 through these issues. How did we get to this point? 0:01:26.160 --> 0:01:28.480 Amy, great? 0:01:28.520 --> 0:01:29.240 Thank you, Jess. 0:01:29.640 --> 0:01:33.240 Yes, well, certainly, when it was first announced that Tesla 0:01:33.280 --> 0:01:35.600 would be setting up a factory in Mexico at the 0:01:35.640 --> 0:01:40.240 start of March, people were very excited. The local politicians, 0:01:40.760 --> 0:01:44.440 you know, held it as the beacon of near shoring 0:01:45.400 --> 0:01:47.480 that you know, this is going to bring a huge 0:01:47.480 --> 0:01:51.840 amount of investment to Mexico, and it was also viewed 0:01:51.880 --> 0:01:55.200 by residents in the area as a great boon for 0:01:55.280 --> 0:01:56.360 the local economy. 0:01:56.800 --> 0:01:59.320 Now fast forward about you know, nine. 0:01:59.080 --> 0:02:01.960 Months or so, where we're at at now, and really 0:02:01.960 --> 0:02:03.960 there's been no activity whatsoever. 0:02:04.680 --> 0:02:06.360 I went and visited the site. 0:02:06.920 --> 0:02:11.280 It's essentially, you know, sort of desert along the highway 0:02:11.440 --> 0:02:16.919 with cactuses and no real construction going on. And one 0:02:16.919 --> 0:02:20.359 of the issues is is that Tesla is still yet 0:02:20.400 --> 0:02:24.800 to receive certain federal and state permits for the construction. 0:02:25.600 --> 0:02:26.799 They have received a. 0:02:26.760 --> 0:02:30.000 Permit for the land use, which is a very very 0:02:30.040 --> 0:02:33.880 recent phenomenon that just happened this week. But essentially there 0:02:34.120 --> 0:02:37.360 is an issue around delays to permits as well as 0:02:37.480 --> 0:02:40.360 a lack of infrastructure. Elon Muss has requested that the 0:02:40.360 --> 0:02:45.120 government help in terms of road infrastructure. There's another issue 0:02:45.160 --> 0:02:48.320 around water access as well. And then you add those 0:02:48.360 --> 0:02:51.400 issues happening in Mexico to the fact that the global 0:02:51.440 --> 0:02:54.480 economy isn't doing as well that Elon Muss doesn't see 0:02:54.520 --> 0:02:58.360 as much demand. So there's really been quite a significant 0:02:58.520 --> 0:02:59.480 change in the. 0:02:59.400 --> 0:03:01.520 Way that Tesla has been viewing Mexico. 0:03:01.680 --> 0:03:03.600 What would you say is the biggest factor here? Does 0:03:03.600 --> 0:03:06.560 it come from Tesla amy or is it coming from 0:03:06.639 --> 0:03:11.240 the Mexican government given that the company is looking for 0:03:11.720 --> 0:03:15.120 concessions here that perhaps the government isn't willing to just 0:03:15.120 --> 0:03:15.520 hand out. 0:03:17.080 --> 0:03:21.920 That's a great question, and certainly it's nuanced. You have 0:03:22.560 --> 0:03:23.919 a few opposing forces. 0:03:24.480 --> 0:03:28.520 The local state government is extremely keen on Tecla coming. 0:03:29.000 --> 0:03:32.200 In addition to that that that permit that I mentioned 0:03:32.200 --> 0:03:35.240 that was recently approved, the state government has also just 0:03:35.280 --> 0:03:38.600 said that they're going to provide one hundred and fifty 0:03:38.680 --> 0:03:43.400 three million dollar incentive for Tesla to come to, you know, 0:03:43.480 --> 0:03:46.440 to help with the road infrastructure, and also a reduction 0:03:46.560 --> 0:03:50.000 in the taxes around the payroll. You know, they've they've 0:03:50.040 --> 0:03:52.120 done a ton that the governor has done a ton 0:03:52.160 --> 0:03:56.200 in terms of advertising around the fact that Tesla is coming. 0:03:56.560 --> 0:04:01.680 At the same time, the federal government has really tried 0:04:01.720 --> 0:04:06.920 to push forward development of the south of Mexico, not 0:04:07.080 --> 0:04:09.960 the north, which is where Tesla is headed. And you know, 0:04:10.000 --> 0:04:13.000 there's been some concerns from the federal government that perhaps 0:04:13.040 --> 0:04:15.680 the investment should be in this other. 0:04:15.520 --> 0:04:17.479 Part of Mexico where there's more poverty. 0:04:17.920 --> 0:04:21.080 So there are some questions around whether the federal government 0:04:21.080 --> 0:04:25.159 will throw its full weight to bring Tesla over now 0:04:25.240 --> 0:04:28.360 when it comes to Elon Musk, certainly, you know, he's 0:04:28.360 --> 0:04:31.720 seemed very enthusiastic about the project. It does raise a 0:04:31.760 --> 0:04:34.960 few questions whether perhaps some of the difficulties that they've. 0:04:34.760 --> 0:04:38.520 Seen have you know, changed his mind. He did announce 0:04:38.520 --> 0:04:39.400 in a recent. 0:04:39.160 --> 0:04:42.480 Interview that they're going to be working on the next generation, 0:04:43.240 --> 0:04:47.760 more affordable entry level vehicle from Texas first and then 0:04:47.880 --> 0:04:49.320 Mexico because. 0:04:49.080 --> 0:04:50.880 The plant won't be ready. So it's a little bit 0:04:50.920 --> 0:04:52.480 of both sides. 0:04:53.040 --> 0:04:56.080 What do you think the potential repercussions for Tesla would 0:04:56.080 --> 0:05:00.080 be when it comes to production, right. 0:05:00.160 --> 0:05:03.800 Well, I think certainly we're going to see you know, 0:05:04.160 --> 0:05:07.840 a delay with the production. You know, there were some 0:05:07.880 --> 0:05:10.640 speculation about whether the plant would be built at all. 0:05:10.680 --> 0:05:14.520 It certainly seems that you know, Tecla will continue to 0:05:14.560 --> 0:05:19.279 pursue this, that it will be constructed. But certainly the idea. 0:05:18.920 --> 0:05:21.560 Here, what local officials have said. 0:05:21.360 --> 0:05:23.160 In the beginning was that you know, we were going 0:05:23.200 --> 0:05:27.720 to see production start possibly in twenty twenty four next year. 0:05:28.240 --> 0:05:31.800 Now they're pushing that number back out to twenty twenty five, 0:05:31.920 --> 0:05:35.600 possibly even twenty twenty six, So that would certainly affect 0:05:36.120 --> 0:05:40.520 the rollout of this new generation vehicle. Much will obviously 0:05:40.560 --> 0:05:43.120 depend on, you know, how quickly they can can get 0:05:43.120 --> 0:05:43.960 the factory. 0:05:43.680 --> 0:05:45.920 Up and running and give us an idea of what's 0:05:45.960 --> 0:05:49.520 at stake here. I mean, after all, auto factory is 0:05:49.520 --> 0:05:53.320 something that politicians in the US fight over against one 0:05:53.320 --> 0:05:56.400 another because the economic impact of something like this can 0:05:56.440 --> 0:05:58.840 be so huge. It's not just the people who are 0:05:58.880 --> 0:06:02.080 hired at the plant, it's the ripple effects throughout a 0:06:02.080 --> 0:06:06.360 local economy of those you know, high paying jobs. What's 0:06:06.400 --> 0:06:07.080 at stake here? 0:06:07.800 --> 0:06:10.359 Yes, well that's certainly very much the case. 0:06:10.839 --> 0:06:13.640 And you know, as I said, uh, the Tesla Tesla 0:06:13.640 --> 0:06:16.560 plant has really been the poster boy for this this 0:06:16.680 --> 0:06:19.400 move toward nearshoring, which is, you know, companies looking to 0:06:19.480 --> 0:06:23.320 invest closer to the US. And certainly if this plant, 0:06:23.640 --> 0:06:25.040 you know, doesn't get up and running, that. 0:06:25.000 --> 0:06:26.080 Will look pretty poor. 0:06:26.800 --> 0:06:29.239 It doesn't bode well for other companies that are looking 0:06:29.240 --> 0:06:32.000 to set up here. At the same time, what we've 0:06:32.040 --> 0:06:36.120 seen is a real huge influx of suppliers to Tesla 0:06:36.600 --> 0:06:38.960 that a lot of companies have come over, especially from 0:06:39.040 --> 0:06:42.640 China and other places, to be able to supply Tesla 0:06:42.640 --> 0:06:46.120 in Mexico. So they're they're starting to set up so 0:06:46.200 --> 0:06:48.640 it will be very interesting to see as well, you know, 0:06:48.680 --> 0:06:52.560 whether they're going to be able to continue with their plans. 0:06:53.160 --> 0:06:55.080 One company in particular that I spoke with. 0:06:55.160 --> 0:06:58.720 Yan Lun from China, you know, had said that, well, 0:06:58.800 --> 0:07:02.039 right now we're supplying to they're they're Austin factory, you know, 0:07:02.160 --> 0:07:03.120 but but we set. 0:07:03.000 --> 0:07:04.960 Up here for the Mexico factory. 0:07:05.000 --> 0:07:07.880 So I'm I'm sure they're also you know, highly anticipating 0:07:08.440 --> 0:07:11.880 that Tesla will get started. At the same time, you know, 0:07:11.920 --> 0:07:14.280 the residents, as I mentioned, were very excited about the 0:07:14.400 --> 0:07:19.200 rival of Tesla. There's still cautious optimism that this will 0:07:19.480 --> 0:07:23.680 help propel the local economy, help create jobs, not just 0:07:23.760 --> 0:07:26.000 in the Tesla factory, as you pointed out, but also 0:07:26.720 --> 0:07:28.680 you know, all the suppliers that are living in all 0:07:28.680 --> 0:07:31.640 of the supply chain that will require employees. 0:07:32.160 --> 0:07:34.520 And you're speaking about those local residents, what are some 0:07:34.600 --> 0:07:37.320 of their top questions right now in the wake of 0:07:37.360 --> 0:07:38.480 all of this unraveling. 0:07:40.240 --> 0:07:43.840 Well, certainly a big question is how soon will will 0:07:43.920 --> 0:07:44.960 Tesla get. 0:07:44.880 --> 0:07:47.760 Up and running. I think that's that's definitely on everybody's minds. 0:07:48.400 --> 0:07:49.280 At the same. 0:07:49.080 --> 0:07:52.640 Time, you know, there are certain questions around also, you know, 0:07:52.760 --> 0:07:56.360 the the talent, the labor pool. Residents are very excited 0:07:56.360 --> 0:07:59.480 about the opportunity to work for Tesla. 0:07:59.600 --> 0:08:02.520 I've also spoken to some some local business owners. 0:08:02.720 --> 0:08:06.720 Funnily enough, there are some competing businesses that are less excited. 0:08:07.120 --> 0:08:10.320 They're worried about the you know, the talent being being 0:08:10.880 --> 0:08:13.200 suctioned up by the the Tesla factory. 0:08:13.280 --> 0:08:15.960 So there are some competing competing forces. 0:08:16.040 --> 0:08:20.920 But certainly overall, people are people are waiting, people are excited. 0:08:20.960 --> 0:08:23.280 They hope that that you know, more jobs will come. 0:08:23.560 --> 0:08:25.880 Yeah, I guess the question that I have is, you know, 0:08:25.920 --> 0:08:28.080 what kind of moves the needle here. What are you 0:08:28.240 --> 0:08:30.880 watching to see whether or not this is this factory 0:08:30.920 --> 0:08:34.560 actually happens. Is it a global change and demand for EV's. 0:08:34.559 --> 0:08:37.160 It's something that we've covered a lot here, especially when 0:08:37.160 --> 0:08:40.320 it comes to American companies like gm Ford and Tesla 0:08:40.440 --> 0:08:44.120 facing waiting demand or is it something that comes from 0:08:44.480 --> 0:08:46.160 I don't know, perhaps something else. I mean, at the 0:08:46.200 --> 0:08:47.760 end of the day, Elon Musk is the one who 0:08:47.800 --> 0:08:49.079 makes this decision amy. 0:08:50.320 --> 0:08:53.679 Of course, of course, and and I think certainly you know, 0:08:53.720 --> 0:08:57.880 there are pressures to get moving on on electric vehicle production. 0:08:58.360 --> 0:09:01.120 Tesla is not the only company you mentioned a few 0:09:01.160 --> 0:09:03.880 others that has said that they would look to EV 0:09:04.000 --> 0:09:07.120 production in Mexico. You know, we've seen a lot of 0:09:07.160 --> 0:09:11.280 big players BMW for the few others that have also 0:09:12.040 --> 0:09:13.240 you know, said that they. 0:09:13.160 --> 0:09:14.760 Would be looking to EV production. 0:09:15.120 --> 0:09:18.640 I think a lot of those big companies are waiting 0:09:18.679 --> 0:09:21.080 to see what happens with Techla as well, to see 0:09:21.080 --> 0:09:23.280 whether Tecla can achieve this goal. 0:09:23.920 --> 0:09:25.319 Will they move a bit quicker. 0:09:25.559 --> 0:09:28.199 At the same time, you've got a pretty strong competition 0:09:28.559 --> 0:09:30.679 from some Chinese players like BYD. 0:09:31.480 --> 0:09:33.920 You know, Tesla and BYD have been neck and neck, 0:09:34.280 --> 0:09:34.600 and that. 0:09:34.640 --> 0:09:37.760 Will certainly that will certainly play out in Mexico, where 0:09:37.800 --> 0:09:43.280 BYD has announced recent partnerships in Mexico, is selling currently 0:09:43.320 --> 0:09:44.719 selling vehicles. 0:09:45.160 --> 0:09:48.080 Whatever whatever happens, we're going to be sure to have 0:09:48.120 --> 0:09:50.200 to check in with you. That's Amy Stillman joining us 0:09:50.440 --> 0:09:52.560 live on zoom from Mexico City. Check out her story 0:09:52.559 --> 0:09:55.240 and more on the Bloomberg terminal and at Bloomberg dot Com. 0:09:55.440 --> 0:09:59.000 You're listening to the Bloomberg Business Week podcast. Catch us 0:09:59.000 --> 0:10:01.040 live we do you have to noons from three to 0:10:01.080 --> 0:10:04.960 six Eastern Listen on Bloomberg dot com, the iHeartRadio app, 0:10:04.960 --> 0:10:08.440 and the Bloomberg Business app, or watch us live on YouTube. 0:10:09.559 --> 0:10:11.280 Well, it's been a whild year for Crypto Jeazz. I 0:10:11.320 --> 0:10:12.960 think it's fair to say that at the end of 0:10:13.120 --> 0:10:15.160 every single year, but there were some things that made 0:10:15.240 --> 0:10:19.880 this year unique. There were some arrests, there were multiple bankruptcies, 0:10:19.880 --> 0:10:23.000 and then of course Sam Bankment Freed is in jail 0:10:23.080 --> 0:10:26.040 right now after being found guilty of stealing customer funds. 0:10:26.640 --> 0:10:29.839 He's awaiting sentencing in March. If any year should have 0:10:29.840 --> 0:10:31.800 out betted this sector, this one would have been it. 0:10:31.800 --> 0:10:35.160 And yet it didn't actually happen because we have this 0:10:35.280 --> 0:10:40.480 crypto comeback, brewing bitcoins value briefly surpassing forty four thousand 0:10:40.480 --> 0:10:42.560 dollars earlier this month. That's its highest point in more 0:10:42.600 --> 0:10:45.120 than a year, fueled by all this anticipation over eight 0:10:45.200 --> 0:10:50.280 possible sec approval of a Bitcoin ETF. Joining us not 0:10:50.320 --> 0:10:52.800 a dig deeper into the future of cryptos Ophelia Snyder, 0:10:52.800 --> 0:10:55.080 co founder of twenty one co, who joins us on 0:10:55.240 --> 0:10:58.800 zoom from New York City. Good to have you with us, Ophelia. 0:10:58.800 --> 0:11:00.000 How are you. 0:11:01.080 --> 0:11:02.600 I'm very well, Thank you, Thank you for having me. 0:11:02.800 --> 0:11:05.559 So how would you characterize the state of crypto right now? 0:11:05.559 --> 0:11:09.240 And you know, I don't want to conflate crypto and bitcoin, 0:11:09.320 --> 0:11:14.400 which a lot of people certainly do. Bitcoin is a cryptocurrency, 0:11:14.440 --> 0:11:16.000 But I think a lot of the optimism that we've 0:11:16.000 --> 0:11:19.000 seen in crypto this year has been the result of 0:11:19.520 --> 0:11:20.720 optimism over bitcoin. 0:11:23.040 --> 0:11:27.320 So I think optimism is probably a good way of 0:11:27.400 --> 0:11:30.360 describing the current state of crypto markets. I think we've 0:11:30.360 --> 0:11:34.080 had a very long and quite transparently, quite brutal winter 0:11:35.040 --> 0:11:35.800 across the space. 0:11:35.840 --> 0:11:37.240 I mean, you guess we're just talking about some. 0:11:37.240 --> 0:11:39.840 Of these things, but it seems like now a lot 0:11:39.840 --> 0:11:42.199 of that has shaken out, there's a lot less regulatory 0:11:42.480 --> 0:11:46.960 uncertainty about some of the large players Coidmese, Finance, some 0:11:47.000 --> 0:11:50.360 of these large names. We're starting to see a lot 0:11:50.480 --> 0:11:54.640 less uncertainty around. You've seen a lot of the bad 0:11:54.679 --> 0:11:58.200 actors get shaken out, and we've seen the industry really 0:11:59.240 --> 0:12:02.319 consolidate and double down, and I think you're seeing now 0:12:02.640 --> 0:12:06.960 the fruits of basically eighteen months of people working on things. 0:12:07.200 --> 0:12:10.000 I think bigcoins certainly leading some of that narrative today 0:12:10.080 --> 0:12:15.880 between the having THETF and some of the interesting market 0:12:15.920 --> 0:12:17.079 dynamics that have happened there. 0:12:17.080 --> 0:12:19.120 But I think it's broadly true across the industry. 0:12:19.760 --> 0:12:22.760 Like you were mentioning aphilia, we're waiting on the possibility 0:12:23.000 --> 0:12:27.240 of the SEC approval of a bitcoin ETF How much 0:12:27.280 --> 0:12:29.520 of that do you think has been priced into some 0:12:29.559 --> 0:12:33.040 of these crypto coins, including bitcoin, and how much more 0:12:33.240 --> 0:12:36.160 and potential further room could there be for an asset 0:12:36.200 --> 0:12:36.839 class like that. 0:12:38.320 --> 0:12:41.760 So I think people have to some extent priced in 0:12:41.800 --> 0:12:45.840 the expectation of an approval, but I think there's a 0:12:45.840 --> 0:12:51.320 little bit of mispricing there still, the reason being crypto 0:12:51.559 --> 0:12:56.880 doesn't really has never really seen big American style asset 0:12:56.880 --> 0:12:59.680 management money, it's ever been possible really for them to 0:12:59.760 --> 0:13:00.400 enter space. 0:13:00.679 --> 0:13:01.720 There's been a little bit. 0:13:01.559 --> 0:13:04.400 Of Oria money, there's been a little bit of sort 0:13:04.400 --> 0:13:08.760 of other institutional money, but it's tiny compared to you know, 0:13:09.160 --> 0:13:11.800 what is a couple of basis points on a multi 0:13:11.800 --> 0:13:16.920 trillion dollar industry. It's very different and so quantum larger 0:13:16.960 --> 0:13:21.640 than most market participants in crypto currently have ever seen 0:13:22.559 --> 0:13:26.040 in terms of what that allocation really looks like once 0:13:26.040 --> 0:13:29.600 you start to get away from pure play retail or 0:13:29.760 --> 0:13:35.760 ultra sophisticated institutions. So I think the issue is to 0:13:35.880 --> 0:13:38.800 some extent, yes, to some extent no, I think it's 0:13:38.840 --> 0:13:41.240 going to take longer to see that money come in 0:13:41.640 --> 0:13:43.880 than most people are currently expecting, but I think it 0:13:43.920 --> 0:13:46.320 will be larger than what most people are currently expecting. 0:13:46.520 --> 0:13:48.560 What makes you say that, Aphelia, Because I'm wondering that 0:13:48.640 --> 0:13:52.439 it's not like bitcoin has been inaccessible to people at 0:13:52.440 --> 0:13:54.680 this point, and to traders, they're really looking forward to 0:13:54.720 --> 0:13:57.600 ETFs just for trading and what they can do with those. 0:13:57.720 --> 0:14:00.600 But are there really people on the side lines right 0:14:00.640 --> 0:14:04.240 now who haven't, who are interested in getting into crypto 0:14:04.280 --> 0:14:05.120 who haven't. 0:14:06.520 --> 0:14:10.880 So think about it really simply most people don't manage 0:14:10.920 --> 0:14:13.480 their own money, right, whether that's your for A one 0:14:13.520 --> 0:14:18.440 K or your IRA, or you know, you're working with 0:14:18.480 --> 0:14:22.440 a financial advisor of some kind, or you know, your 0:14:22.480 --> 0:14:27.200 local RAA wherever that it is that you are. None 0:14:27.200 --> 0:14:30.080 of those structures have ever been able to really access 0:14:30.160 --> 0:14:34.800 this space. It's really difficult for an advisor to you know, 0:14:34.800 --> 0:14:39.000 support a client making that allocation. Historically, that's just been 0:14:39.320 --> 0:14:40.760 I'm so sorry, we can't help you. 0:14:41.680 --> 0:14:42.400 Fry Coinbase. 0:14:42.720 --> 0:14:46.440 It's very different when an advisor can actually make a 0:14:46.440 --> 0:14:50.120 strategic allocation, or a client can request this a strategic 0:14:50.160 --> 0:14:54.360 allocation from their advisor, the very different structure to that. 0:14:54.480 --> 0:14:57.000 So it's not people waiting on the sidelines per se. 0:14:57.480 --> 0:15:00.960 It's just most people's money is tied up in other ways. 0:15:01.000 --> 0:15:04.360 And you know, I set up my entire company with 0:15:04.440 --> 0:15:06.760 the goal of helping my mom get into the space. 0:15:06.880 --> 0:15:10.640 She started talk to me about this in twenty fourteen, saying, 0:15:11.000 --> 0:15:12.800 you know, there's this really cool thing called bitcoin. 0:15:12.840 --> 0:15:14.320 Have you heard of it? I have no idea what 0:15:14.400 --> 0:15:15.440 you're talking about it, but. 0:15:15.520 --> 0:15:18.520 He's the one who told you about it. Yeah, that's 0:15:18.520 --> 0:15:19.520 a that's pretty amazing. 0:15:20.680 --> 0:15:22.320 Yeah, tell us a little more about that, because that's 0:15:22.320 --> 0:15:23.640 not typically something we hear. 0:15:24.000 --> 0:15:28.640 Right, My mom's brilliant and came to me one day 0:15:28.680 --> 0:15:31.600 and said, MERK spent too much money on hedging, and 0:15:32.440 --> 0:15:38.080 global monetary policy is too reliant on an assumption of 0:15:38.200 --> 0:15:41.680 geopolitical stability to work long term. We need an alternative. 0:15:41.720 --> 0:15:45.600 It's going to help ensure better cross border trading and 0:15:45.880 --> 0:15:48.800 be a long term tool for economic stability and peace. 0:15:49.400 --> 0:15:51.640 Have you heard of a thing called bitcoin? Like, I 0:15:51.720 --> 0:15:54.640 have no idea what you're talking about, but okay, And 0:15:54.680 --> 0:15:59.520 that's actually how I started looking at crypto. But my mom, interestingly, 0:15:59.560 --> 0:16:03.080 despite completely getting the point both on the monetary policy 0:16:03.120 --> 0:16:05.400 perspective as well as on the floor X side, she 0:16:05.480 --> 0:16:06.680 never actually made the allocation. 0:16:06.840 --> 0:16:07.640 The reason she didn't make. 0:16:07.600 --> 0:16:10.040 The allocation is that there is no way within her 0:16:10.080 --> 0:16:13.120 existing financial infrastructure, you know, the way she does her 0:16:13.160 --> 0:16:16.040 tax reporting, the way she works with her advisors, that 0:16:16.160 --> 0:16:17.800 was going to make it possible for her to come 0:16:17.800 --> 0:16:21.040 into the space, at least not in a way that 0:16:21.080 --> 0:16:23.800 she felt comfortable with, both from a technology perspective, but 0:16:23.800 --> 0:16:26.760 also like purely from an infrastructure perspective, And that applies 0:16:26.800 --> 0:16:29.280 to both a lot of individuals but also applies to. 0:16:29.240 --> 0:16:31.760 Things like funds. It's really hard. 0:16:31.520 --> 0:16:35.280 To trade in custody of crypto from a fiduciary perspective, 0:16:35.400 --> 0:16:38.960 like the level of engagement that you need with your infrastructure, 0:16:39.000 --> 0:16:42.080 and I know that is a permanently unsexy thing to 0:16:42.120 --> 0:16:47.080 think about, but tax reporting and custodial and trading infrastructure 0:16:47.200 --> 0:16:51.560 is a huge part of what these fiduciaries need to provide, 0:16:51.760 --> 0:16:53.360 and they need to provide it to a certain level. 0:16:53.400 --> 0:16:55.680 And it's a completely different piece of infrastructure. It's not 0:16:55.920 --> 0:16:58.480 as simple as well, you want it, we can sell 0:16:58.480 --> 0:17:01.920 it to you. There's always been a bunch of gates 0:17:01.960 --> 0:17:04.159 to this, and we've certainly seen that in Europe, where 0:17:04.200 --> 0:17:06.040 you know, we've been operating for the last five years 0:17:06.080 --> 0:17:09.040 and selling quite frankly similar. 0:17:08.720 --> 0:17:11.439 Products to what's being contemplated in the US. 0:17:12.320 --> 0:17:14.720 And we see a lot of our clients being people 0:17:14.760 --> 0:17:18.560 for whom you know, buying direct physical is just either 0:17:18.760 --> 0:17:19.720 not what they want to do or. 0:17:19.720 --> 0:17:20.240 Not an option. 0:17:21.240 --> 0:17:24.719 Well, talk to us about regulation because that's still pending 0:17:24.720 --> 0:17:28.040 in Washington and the risks because there's still a lot 0:17:28.040 --> 0:17:32.280 of skepticism when it comes to institutional adoption for crypto. 0:17:35.720 --> 0:17:41.040 Yes there is, and I think that it is changing. 0:17:42.359 --> 0:17:44.440 You know, when I when I started talking to large 0:17:44.440 --> 0:17:49.360 institutions about crypto and blockchain and bitcoin five years ago, 0:17:49.520 --> 0:17:52.520 everyone looked at me like I was completely out of 0:17:52.560 --> 0:17:55.520 my mind and that this was just not something didn't 0:17:55.520 --> 0:17:58.000 make any sense. Are you one hundred percent sure that 0:17:58.119 --> 0:18:00.560 you know this exists? 0:18:00.960 --> 0:18:01.080 How? 0:18:01.200 --> 0:18:03.560 How can you even have a digital asset? What does 0:18:03.600 --> 0:18:04.040 that mean? 0:18:05.359 --> 0:18:08.160 You know, there were a lot more questions on basic 0:18:08.280 --> 0:18:12.080 viability and whether or not we were just nuts. I 0:18:12.119 --> 0:18:15.160 think that is no longer the case. I don't think 0:18:15.480 --> 0:18:18.840 really the doubts around you know, whether or not this 0:18:18.960 --> 0:18:21.600 asset's going to exist, going to continue to be built out. 0:18:22.119 --> 0:18:26.800 The value of watching two institutions, the value of smart 0:18:26.800 --> 0:18:30.000 contracts to institutions, and I think that's especially true in 0:18:30.080 --> 0:18:30.840 terms of ethereum. 0:18:30.840 --> 0:18:32.000 And you're starting to see, you. 0:18:31.920 --> 0:18:36.080 Know, large asset managers bring tokenization projects forward. You're starting 0:18:36.119 --> 0:18:40.000 to see more utility and cross border payments. You're starting 0:18:40.000 --> 0:18:44.320 to see real use cases and everything from financial services. 0:18:43.880 --> 0:18:44.679 To video games. 0:18:45.359 --> 0:18:47.919 And I think that's really exciting and it's changed the 0:18:48.000 --> 0:18:50.760 dialogue because now there's a real thematic here, and there's 0:18:50.800 --> 0:18:56.919 a real proven use case that's not solely contained to 0:18:57.160 --> 0:18:57.920 the crypto world. 0:18:58.359 --> 0:19:00.680 Well, really appreciate you joining us this after noon. That's 0:19:00.760 --> 0:19:03.919 Ophilia Snyder, co founder of twenty one Code, joining us 0:19:03.960 --> 0:19:07.800 on zoom from New York City again. To get crypto 0:19:08.280 --> 0:19:11.480 on the Bloomberg terminal prices, just get up the dashboard 0:19:11.760 --> 0:19:15.600 ceryp go on the Bloomberg terminal. Bitcoin now at about 0:19:15.640 --> 0:19:17.879 forty and forty four dollars. 0:19:18.760 --> 0:19:22.320 You're listening to the Bloomberg Business Week podcast. Catch us 0:19:22.359 --> 0:19:26.399 live weekday afternoons from three to six Eastern on Bloomberg Radio, 0:19:26.560 --> 0:19:29.879 the Bloomberg Business app, and YouTube. You can also listen 0:19:29.960 --> 0:19:33.080 live on Amazon Alexa from our flagship New York station. 0:19:33.520 --> 0:19:36.560 Just say Alexa play Bloomberg eleven thirty. 0:19:37.960 --> 0:19:38.120 Well. 0:19:38.119 --> 0:19:41.680 The MSCI Asia Pacific Index rallied nearly three percent this week. 0:19:41.680 --> 0:19:44.359 It was led higher by Australian, Korean, and Chinese shares 0:19:44.359 --> 0:19:48.119 as tech stalks climbed. Bonds rallied through the region, including 0:19:48.119 --> 0:19:50.639 in Japan and Indonesia. 0:19:51.240 --> 0:19:51.960 It's a sign that. 0:19:52.040 --> 0:19:54.960 Global investors are becoming comfortable with risk your assets this 0:19:55.040 --> 0:19:58.719 after being cautious on investing in Asia over the past decade. 0:19:59.119 --> 0:20:02.679 As the investors do with deglobalization and slower economic growth 0:20:03.160 --> 0:20:06.000 in the region. Joining us now in the Bloomberg Interactor 0:20:06.040 --> 0:20:08.480 Broker studio is somebody we check in with every few months. 0:20:08.520 --> 0:20:11.879 John Whihar is head of Asians Asia Special Situations for 0:20:12.040 --> 0:20:15.320 Pick Day Asset Management, usually based in Singapore, but when 0:20:15.320 --> 0:20:17.400 he comes to the US we like to get him 0:20:17.400 --> 0:20:20.199 in the Bloomberg Interactive Broker's studio. It's good to see you. 0:20:20.200 --> 0:20:21.080 How are you great? 0:20:21.080 --> 0:20:22.320 Thank you, how are you doing well? 0:20:22.400 --> 0:20:24.880 Things? What brings you to New York every few months? 0:20:25.440 --> 0:20:28.440 A couple of things, Meeting investors, talking to investors, research, 0:20:29.119 --> 0:20:32.240 touching base with brokers and lost those kinds of things. So, yeah, 0:20:32.280 --> 0:20:34.040 always a good trip. And I lived here for a while, 0:20:34.119 --> 0:20:34.919 so a bit. 0:20:34.760 --> 0:20:38.880 Of social How has the tone or the reception been 0:20:39.040 --> 0:20:41.000 this trip versus last time you were here a few 0:20:41.000 --> 0:20:42.720 months ago, because a lot has changed since then. 0:20:43.200 --> 0:20:44.879 You know, a lot's changed, But one thing that hasn't 0:20:44.920 --> 0:20:48.680 changed is the sentiment around China. So sentiment around China 0:20:48.760 --> 0:20:52.560 is pretty bad. It's pretty low, and we certainly haven't 0:20:52.560 --> 0:20:54.440 seen a tick up there yet. I think there's quite 0:20:54.440 --> 0:20:56.399 a lot of apathy. Positioning is about as bad as 0:20:56.400 --> 0:20:58.520 I've ever seen it, And so you know, I think 0:20:58.560 --> 0:21:00.760