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The Case For Crypto After Market Meltdown · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
• 0:11
  Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
• 0:15
  Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. Now, let's focus in
• 0:22
  Speaker 1: again on crypto after what we saw yesterday, it was
• 0:26
  Speaker 1: pretty mind blowing a drop down to thirty thousand and
• 0:30
  Speaker 1: then a rally back up to forty. Right now we're
• 0:32
  Speaker 1: trading at forty one thousand, six d forty five dollars.
• 0:37
  Speaker 1: What drove those moves as well as probably a number
• 0:40
  Speaker 1: of things together, But there is probably no other better
• 0:44
  Speaker 1: expert um with whom we could speak about this than
• 0:47
  Speaker 1: Bobby Lee is the founder and CEO of Ballet, also
• 0:51
  Speaker 1: co founder and former CEO of um btc C, the
• 0:55
  Speaker 1: longest running bitcoin exchange. Bobby Um, thanks very much for
• 0:59
  Speaker 1: your time this more thing. What do you think happened yesterday?
• 1:02
  Speaker 1: Was it just sort of Elon Musk doing an about face?
• 1:05
  Speaker 1: Plus um the Chinese authorities saying you can't use bitcoin again? Yes,
• 1:13
  Speaker 1: thank you for having me. It is it was a
• 1:15
  Speaker 1: confluence of things. Certainly it started with Emon Musk's you know,
• 1:19
  Speaker 1: you turn on bitcoin, so to speak, at least from
• 1:21
  Speaker 1: a perspective of using it as a accepted currency for
• 1:25
  Speaker 1: a purchase of TESTA vehicles. Uh you turned about this, uh,
• 1:29
  Speaker 1: you know, late last week. And um, certainly. The other
• 1:34
  Speaker 1: aspect is the Chinese regulatory so called the new ban
• 1:37
  Speaker 1: on bitcoin. But to analyze that, China didn't actually issue
• 1:42
  Speaker 1: anything new. There was no new rules or anything. It
• 1:45
  Speaker 1: was just a rehash of what it has previously published
• 1:49
  Speaker 1: in September of two thousand seventeen. So it's a confluence
• 1:52
  Speaker 1: of those two events which spooked the market. And then
• 1:56
  Speaker 1: of course there's a third factor which is very popular.
• 1:58
  Speaker 1: Bitcoin is a is the factor of the trading, leverage trading.
• 2:03
  Speaker 1: So people may not be aware of this, but bitcoin,
• 2:06
  Speaker 1: besides being traded on a smart market, uh, there's a
• 2:09
  Speaker 1: high volume activity in the futures, you know, sort of
• 2:12
  Speaker 1: leverage trading market, and when there's news events, you know,
• 2:16
  Speaker 1: the the short sellers take advantage of it and really
• 2:20
  Speaker 1: hammer the people holding the long position, and that really
• 2:23
  Speaker 1: helped drive it down a thirty dollars. So, Bobby, let's
• 2:27
  Speaker 1: talk about that volatility. Generally speaking, across the securities markets,
• 2:31
  Speaker 1: that kind of volatility is not welcome, is considered not healthy.
• 2:35
  Speaker 1: How do how do you view it? Yeah, I I
• 2:40
  Speaker 1: I see that perspective. Unfortunately, bitcoin is a global sort
• 2:44
  Speaker 1: of phenomenon and there and the markets are are not
• 2:47
  Speaker 1: well regulated. Frankly speaking, so in equities market, each country
• 2:52
  Speaker 1: has very strict regulatory agencies monitoring the trades and the
• 2:57
  Speaker 1: insider news and so on and and so forth. And for
• 2:59
  Speaker 1: even for the centralize things like gold and precious metals. Uh,
• 3:03
  Speaker 1: the exchanges are regulated. But unfortunately for bitcoin, because it's
• 3:06
  Speaker 1: a global phenomenon, even though you know, the coin based
• 3:09
  Speaker 1: gemini are regulated in the United States, you have a
• 3:12
  Speaker 1: lot of exchanges who are offshore and they do that
• 3:16
  Speaker 1: thing and it's very opaque. So so at least in
• 3:20
  Speaker 1: the near term, it's gonna be very hard to to
• 3:23
  Speaker 1: sort of, you know, try to try to control the volatility.
• 3:28
  Speaker 1: But as in my new books The Promise of Bitcoin,
• 3:30
  Speaker 1: I try to point out to people, volatility does not
• 3:32
  Speaker 1: equate to risk. So this is where there's a lot
• 3:34
  Speaker 1: of confusion. How is that. Well, so when you ask
• 3:39
  Speaker 1: me the question. There's an aliging assumption that volatility is bad,
• 3:45
  Speaker 1: and the reason is because risk is bad. You know,
• 3:47
  Speaker 1: something that's very high risk can be can be risky
• 3:50
  Speaker 1: quote unquote right. Um. But in the case of bitcoin,
• 3:54
  Speaker 1: what I found over the my ten years sort of
• 3:57
  Speaker 1: interacting with it is that it is well whisked adjusted.
• 4:01
  Speaker 1: In other words, I I do you know, I just
• 4:03
  Speaker 1: for disclosure, I want to put long position at bitcoin.
• 4:07
  Speaker 1: I think that, uh, it has a huge potential as
• 4:11
  Speaker 1: investment asset class. So I think for the for the
• 4:15
  Speaker 1: amount of return that I expect to see for bitcoin
• 4:18
  Speaker 1: in the coming five years, ten years, twenty years, I
• 4:22
  Speaker 1: think the volatility is well risk adjusted. I wonder about
• 4:27
  Speaker 1: the big whales, Bobby. Um. You know, Bloomberg has been
• 4:32
  Speaker 1: publishing a figure two percent of the wallets on of
• 4:37
  Speaker 1: the assets. I'd love to get your take on that.
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  Speaker 1: And Um, the first time I ever met you was
• 4:43
  Speaker 1: probably about ten years ago. I was having drinks with
• 4:45
  Speaker 1: Matthew Mellon and Alex Waters and uh, you know, Matt
• 4:50
  Speaker 1: had a fair share of bitcoin that he you know,
• 4:55
  Speaker 1: locked up all over the place and I guess nobody
• 4:58
  Speaker 1: will ever access it again. The same him of course
• 5:00
  Speaker 1: is true with you know, massive storied steaks like Satoshi's.
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  Speaker 1: What does it mean that so much of this, you
• 5:09
  Speaker 1: know what was you know once and more than a
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  Speaker 1: trillion dollar market cap. It looks like, you know, billions
• 5:15
  Speaker 1: of it was just not accessible and never will be accessible. Um.
• 5:19
  Speaker 1: And then other billions of it could easily be moved
• 5:22
  Speaker 1: by one or two people. So so there is a
• 5:27
  Speaker 1: there is sort of the the notion that there are
• 5:32
  Speaker 1: rich people, you know, big whales in the industry, but
• 5:36
  Speaker 1: certainly nowhere, nowhere near the figures you presented of did
• 5:39
  Speaker 1: you say of the assets? That's what point? Maybe that
• 5:45
  Speaker 1: may be true of some other currencies, but certainly not
• 5:48
  Speaker 1: true for bitcoin. Uh. That's socially Nakamoto the the sudonymous
• 5:52
  Speaker 1: anonymous inventor of bitcoin. We people think he owns maybe
• 5:58
  Speaker 1: over a million bitcoins and that's that's the single largest holding, right,
• 6:02
  Speaker 1: So so if you can break it down very logically,
• 6:05
  Speaker 1: that's uh at most ten percent. Uh. But again he
• 6:09
  Speaker 1: hasn't surfaced. You know, there are a lot of rumors
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  Speaker 1: that he he a should have lost his private keys.
• 6:16
  Speaker 1: So the next the next biggest holdings would be would
• 6:20
  Speaker 1: be those of those custodial providers, something like coin based
• 6:24
  Speaker 1: custody or these large exchanges with a large wallet holding
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  Speaker 1: a lot of bitcoins, but in reality that is really
• 6:31
  Speaker 1: held on custody for you know, thousands or even millions
• 6:36
  Speaker 1: of customers. So that point is very well dispersed. I
• 6:40
  Speaker 1: wouldn't worry about anything like that. But by the way,
• 6:45
  Speaker 1: in reality on on in the physical world, you have
• 6:48
  Speaker 1: that phenomenon as well. You know, uh, you know what
• 6:52
  Speaker 1: percentage of wealth is owned by what percentage of people?
• 6:55
  Speaker 1: People say, you know their figures, you know, under ten
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  Speaker 1: percent of the people own physic sound of the world's wealth,
• 7:01
  Speaker 1: whether it's real estate, equities or or other stuff. Right, Hey, Bobby,
• 7:05
  Speaker 1: thank you so much for joining us. We really appreciate
• 7:08
  Speaker 1: getting your thoughts here. Fascinating story. Lots of volatility in
• 7:11
  Speaker 1: the crypto world we've seen just just this week. Bobby Lee,
• 7:14
  Speaker 1: founder and CEO Ballet, is also co founder and former
• 7:17
  Speaker 1: CEO of bt C c UH. He's also an author
• 7:21
  Speaker 1: recent book out entitled The Promise of Bitcoin, The Future
• 7:26
  Speaker 1: of Money and How It Can Work for You that
• 7:27
  Speaker 1: came out on May eighteen. Some more news out of
• 7:34
  Speaker 1: Morgan Stanley today, Big shake up in the leadership ranks.
• 7:37
  Speaker 1: And this follows on what we just saw earlier from
• 7:39
  Speaker 1: JP Morgan. So some more changes that Morgan saying, let's
• 7:42
  Speaker 1: see what it means. We bring in our expert. That
• 7:44
  Speaker 1: would be Alison Williams. She's a senior banks analyst for
• 7:47
  Speaker 1: Bloomberg Intelligence. So Alison, what do you make of some
• 7:50
  Speaker 1: of the changes here? It looks like Mr Gorman is
• 7:53
  Speaker 1: setting up a race for potentially a successor. Here's that
• 7:58
  Speaker 1: I would say, Um, you know, the two sort of
• 8:01
  Speaker 1: leading candidates UH emerging from the announcements are no surprise.
• 8:07
  Speaker 1: Um he did say, at least occurring to Bloomberg News. Um,
• 8:10
  Speaker 1: he did say he expects to stand from at least
• 8:13
  Speaker 1: three more years. But then according to the the the
• 8:16
  Speaker 1: official announcement, you know, basically making the head of institutional
• 8:21
  Speaker 1: Ted Pics and the head of Wealth Management Andy Stafferstein
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  Speaker 1: as as sort of the the co UH presidents and
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  Speaker 1: so front running. I guess the front runners and the
• 8:32
  Speaker 1: air apparent, And both of these executives have done UM
• 8:36
  Speaker 1: a great job over the years. Tech Pic, as you know,
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  Speaker 1: UM started out with leadership in the equities business and
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  Speaker 1: then took over all of global trading they are the
• 8:46
  Speaker 1: global equities revenue leader, and UM, despite the fact that
• 8:51
  Speaker 1: that's sort of the biggest association with them, they have
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  Speaker 1: really gained a lot of share in fixed income and
• 8:56
  Speaker 1: then on the wealth management side, obviously that's a business
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  Speaker 1: that's done very well and become sort of the bigger
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  Speaker 1: part of the bank, especially with two recent large deals.
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  Speaker 1: I don't want to sound too cynical, but are you
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  Speaker 1: allowed to choose UM two white men as possible successors
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  Speaker 1: these days? It seems like such a faux pa. Well
• 9:19
  Speaker 1: these I mean, the one UM positive on the diversity
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  Speaker 1: front is that they are promoting the head of investor Relations,
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  Speaker 1: Sharon Yeshiva to UM, the head to to the CFO role.
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  Speaker 1: So that was so I think that's a positive UM.
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  Speaker 1: But building a bench takes time, and I think that's
• 9:41
  Speaker 1: UM important for all the firms. As we know, diversity
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  Speaker 1: is something that you need to grow over time. And
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  Speaker 1: for Morgan Stanley, these you know, these two UM executives
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  Speaker 1: have run those two divisions and they really were sort
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  Speaker 1: of the most clear cut choice is j Morgan. On
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  Speaker 1: the other hand, UM, you know what's interesting is CFO
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  Speaker 1: Marianne Lake, who has probably a much longer standing with
• 10:09
  Speaker 1: the investment relationship with the investment community than her her
• 10:13
  Speaker 1: new co head Jennifer keep sack Um. But certainly Marianne
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  Speaker 1: has long been considered a potential for that role, Jennifer
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  Speaker 1: as well in recent years, whereas Morgan family just does
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  Speaker 1: not have that bench, but perhaps trying to build it
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  Speaker 1: a little bit now, Alison. You know, we think about
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  Speaker 1: you know, financial titans. Obviously Jamie Diamond right now is
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  Speaker 1: the leader. Give us a sense of how shareholders and
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  Speaker 1: folks like you who you know spend a lot of
• 10:45
  Speaker 1: time in the financial services industry. How does Mr Gorman
• 10:47
  Speaker 1: kind of stack up in terms of his tenure. Well,
• 10:51
  Speaker 1: he's done a great job and I would say that um,
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  Speaker 1: you know, especially I think in the early years he
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  Speaker 1: made some tough voices within the organization. I think that
• 11:02
  Speaker 1: that in general, um, he's been shareholder friendly over the
• 11:06
  Speaker 1: years in terms of um, you know, focusing on things
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  Speaker 1: like uh cost control. They've um pretty much delivered all
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  Speaker 1: of the targets they set um over the several year tenure.
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  Speaker 1: And I think the investment community really likes the shift
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  Speaker 1: at the bank more towards the more stable wealth management business.
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  Speaker 1: But again They've had great success on the institutional side
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  Speaker 1: as well, even though it's a lesser part of their
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  Speaker 1: their business. Now, so what does I mean in terms
• 11:39
  Speaker 1: of the league tables here? Who are the rising stars?
• 11:44
  Speaker 1: Where does Morgan Stanley fit into the picture? Well, Morgan Stanley,
• 11:49
  Speaker 1: as I noted earlier, they're they're the leader in global
• 11:52
  Speaker 1: equities trading, so that's I think been been strong and
• 11:56
  Speaker 1: they've gained share um in fixed income. The other notable
• 12:00
  Speaker 1: edition for Morgan Stanley is you know, as an equities
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  Speaker 1: underwriter and as a leader in M and A. So
• 12:08
  Speaker 1: it's really Morgan Stanley, JP Morgan and Golden Sex are
• 12:11
  Speaker 1: sort of the you know as we say they're they're
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  Speaker 1: the consistent leaders in equity, undant underwriting and traditional I
• 12:18
  Speaker 1: p o s over time, although they have been less
• 12:21
  Speaker 1: active than perhaps some others in facts, they've also done
• 12:25
  Speaker 1: business there um. Both Goldman and Morgan Stanley are are
• 12:29
  Speaker 1: less strong on the death diversus someone like JP Morgan um,
• 12:34
  Speaker 1: but they do get sort of a talent and expected
• 12:36
  Speaker 1: to get a tale in there in M and A. Um.
• 12:39
  Speaker 1: Goldman is the clear revenue leader there um. But again,
• 12:42
  Speaker 1: the three players that I talked about are are very
• 12:45
  Speaker 1: active and that's the business that we expect is very
• 12:47
  Speaker 1: strong fundament with support, Alison, are these are these league
• 12:51
  Speaker 1: table standings and you can see them in many different
• 12:53
  Speaker 1: ways in the Bloomberg with League Rammy go, etcetera. Are
• 12:56
  Speaker 1: they important to UM equity returns? Does it? Does it
• 13:03
  Speaker 1: really play through and how investors can make money on
• 13:05
  Speaker 1: these banks? Sure? And and so I think that's the
• 13:08
  Speaker 1: that's the key point, because what matters to investors is profitability. UM.
• 13:13
  Speaker 1: But Morgan Stanley as well as the largest US banks
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  Speaker 1: have benefited from sort of a virtuous cycle of scale
• 13:20
  Speaker 1: and spending and so UM. The benefit of scale is
• 13:23
  Speaker 1: that UM, it gives you more money to invest in technology.
• 13:27
  Speaker 1: That's been the key battleground for financial companies over the
• 13:29
  Speaker 1: last decade. And so that's where the scale has been helpful. Alice,
• 13:34
  Speaker 1: thanks so much for joining us. Always great to get
• 13:37
  Speaker 1: UM your insight. Alison Williams is a senior industry analyst
• 13:40
  Speaker 1: Global Investment, Banks and Asset Management for Bloomberg Intelligence. Talking
• 13:44
  Speaker 1: to us about the new succession plan over at Morgan
• 13:47
  Speaker 1: Stanley really our top story today, this is Bloomberg. Yeah, UM,
• 13:55
  Speaker 1: let's get over right now to Burt Flexinger. We had
• 13:58
  Speaker 1: the pleasure of speaking with Burt bree Flee and and
• 14:00
  Speaker 1: we're rudely interrupted UM the other day on the retail
• 14:05
  Speaker 1: UM earnings UH rampage that we saw over the last
• 14:10
  Speaker 1: few days. It just went on and on yesterday. He's
• 14:13
  Speaker 1: managing director of Strategic Resource Group, and he can come
• 14:15
  Speaker 1: back on thankfully and share a couple more minutes with us.
• 14:18
  Speaker 1: But what did you think after we got you know,
• 14:21
  Speaker 1: all of the UM UH, Walmart, Target, Macy's. I mean,
• 14:29
  Speaker 1: we got really lows home depot, just a ton of
• 14:34
  Speaker 1: big box retailers out as well. How does the economy
• 14:37
  Speaker 1: look from from a consumer perspective? I UH, Paul, Paul,
• 14:42
  Speaker 1: and Matt. The the economy looks spectacular from a consumer perspective.
• 14:48
  Speaker 1: Consumers have paid down seven fifty million dollars in debt
• 14:53
  Speaker 1: or about of total debt and are ready to spend.
• 14:58
  Speaker 1: But the interesting thing is is you reference from yesterday
• 15:01
  Speaker 1: is UM. Nobody's talking about leadership, innovation, inflation, and obesity,
• 15:08
  Speaker 1: which all UM unconventionally combine to really drive up retail.
• 15:15
  Speaker 1: On the Bloomberg terminal and the S and P x
• 15:18
  Speaker 1: RT index retails up about a year to date and
• 15:23
  Speaker 1: about a hundred and forty ttm or trailing twelve months.
• 15:27
  Speaker 1: And at the same time, we have record obesity levels
• 15:31
  Speaker 1: for adults from toddlers to teens. They're gonna need bigger clothes.
• 15:37
  Speaker 1: Inflation means restaurants are uncompetitive on costs. People eating more
• 15:41
  Speaker 1: at home, and uh be between clothing consumables, hard goods
• 15:47
  Speaker 1: and soft goods advantage lows, advantage BJS and advantaged calls,
• 15:53
  Speaker 1: all of whom reported record breaking numbers, and all of
• 15:56
  Speaker 1: whom have great leaders and tremendous boards. From an E,
• 16:00
  Speaker 1: S G and diversity standpoint, it is interesting that people
• 16:03
  Speaker 1: got fatter staying home. You would have thought maybe they'd
• 16:06
  Speaker 1: eat healthier. Um, that's not what happened. I guess it's
• 16:10
  Speaker 1: John Mackie once once once told me consumers want proverbial
• 16:17
  Speaker 1: quote unquote sin in salvation. They want salvation with natural
• 16:20
  Speaker 1: and organics. But when their floods and major natural disasters,
• 16:26
  Speaker 1: the foods full flavor, salt, and sugar are the first
• 16:29
  Speaker 1: to sell out in the stores, and the last to
• 16:31
  Speaker 1: go are the natural and organic items. Hey Bert, didn't
• 16:35
  Speaker 1: you hear any from any of these companies. Supply chain
• 16:37
  Speaker 1: challenges here we've heard that in a lot of industries,
• 16:39
  Speaker 1: are they being able to get the product they need
• 16:41
  Speaker 1: on the shelves? Yes, supply chain and and UH to
• 16:45
  Speaker 1: be b JS, Lowe's Lows UH respective credit they're investing
• 16:50
  Speaker 1: record capital and inventories. But also it's Marshall Merrifield and
• 16:53
  Speaker 1: the directors of the West Coast Sports Unwind. The backlog
• 16:58
  Speaker 1: is more ships seafair as containers come through the West Core,
• 17:02
  Speaker 1: West Coast Golf and Eastern ports. UH, you'll see a
• 17:07
  Speaker 1: record amount of special situation inventory marked H to sell
• 17:12
  Speaker 1: great margins and great treasure hunts for costco b JS
• 17:17
  Speaker 1: and and Lows and the others UH to really capitalize
• 17:20
  Speaker 1: on the logistics and supply chain being UH completely jammed
• 17:26
  Speaker 1: up for fifteen months and opening up to record breaking
• 17:30
  Speaker 1: shipments between now and New Year's which means it will
• 17:33
  Speaker 1: be a great memorial data, labor Day, back to school
• 17:36
  Speaker 1: and certainly holiday selling to all right, Bert, thanks so
• 17:39
  Speaker 1: much for jumping on with us. We always appreciate getting
• 17:41
  Speaker 1: your thoughts on all things retail. Bert Flickinger, Managing Director
• 17:45
  Speaker 1: as Strategic Resource Group, was a busy, busy week for
• 17:49
  Speaker 1: retailer earnings generally coming in very very strong, as you
• 17:52
  Speaker 1: would expect easy comparisons. Plus, this economy is opening up.
• 17:55
  Speaker 1: This is Bloomberg. Now, let's get into the world of
• 18:01
  Speaker 1: retail investing. And I don't mean, you know, buying chairs
• 18:04
  Speaker 1: of Kmart or Kroger, but I mean, um, you know
• 18:07
  Speaker 1: Wall Street bets, diamond hands, Reddit um boards about game
• 18:13
  Speaker 1: stop and alt coins to the moon. Mr Lena a
• 18:17
  Speaker 1: golf of Polo who joins US now personal finance reporter
• 18:20
  Speaker 1: at Bloomberg News. She wrote one of the most read
• 18:22
  Speaker 1: stories on the terminal today and Mr Lenna, I have
• 18:26
  Speaker 1: to say it's a little bit depressing, um reading about
• 18:30
  Speaker 1: this sad dude, Eric Hackney, who's uh his wife Brittany,
• 18:35
  Speaker 1: and he's got a couple of kids, and he just
• 18:37
  Speaker 1: wants to get rich fast, right without having to do anything.
• 18:41
  Speaker 1: So um, he buys what twenty billion Australian safe Shepherd coin.
• 18:48
  Speaker 1: That's exactly right. I mean, you know, this is one
• 18:53
  Speaker 1: could say, pretty parallel to the idea of gambling, right,
• 18:56
  Speaker 1: Like you are basically throwing a couple of hundreds of
• 19:00
  Speaker 1: dollars into uh, into something that you hope will help
• 19:04
  Speaker 1: you get rich quick. But there's absolutely no basis of
• 19:08
  Speaker 1: investing in these coins because of their fundamentals. This is
• 19:13
  Speaker 1: a pure gamble. And the reason why people like Eric
• 19:16
  Speaker 1: are you know, interested in throwing their money and assets
• 19:19
  Speaker 1: like that, is because they've seen people become very rich
• 19:24
  Speaker 1: through these vehicles. And namely, I think the one that
• 19:27
  Speaker 1: we all look at is dodge Coin, right like, this
• 19:30
  Speaker 1: is a coin that started as a joke, um, and
• 19:33
  Speaker 1: if you threw a couple of hundred dollars into dodge
• 19:36
  Speaker 1: coin last July, that meant that those dollars now are
• 19:39
  Speaker 1: worth hundreds of thousands of dollars. And so what these
• 19:43
  Speaker 1: investors are are trying to figure out is what's the
• 19:46
  Speaker 1: next dodge Coin. And that's when the Australian Safe Shepherd
• 19:49
  Speaker 1: coin comes in. But also other cryptocurrencies that are really
• 19:53
  Speaker 1: weirdly named and exists in this sort of really weird
• 19:57
  Speaker 1: um like space within the crypto world called defied for
• 20:01
  Speaker 1: Decentralized Finance and their named you know, after dogs like
• 20:05
  Speaker 1: Sidau or Papua u or baby Nu, but also names
• 20:08
  Speaker 1: like Taco Cat and even safe Moon, you know, which
• 20:11
  Speaker 1: is a coin that was endorsed by Dave Portnoy just
• 20:15
  Speaker 1: a few a few days ago, and so you're really
• 20:17
  Speaker 1: seeing these coins um game traction, and what these retail
• 20:21
  Speaker 1: investors are trying to figure out is which one of
• 20:23
  Speaker 1: them is going to become the next Dodge coin, because hey,
• 20:26
  Speaker 1: if it happened once, it's really will happen again, right,
• 20:30
  Speaker 1: all right, So this is kind of begs, you know,
• 20:33
  Speaker 1: being an old Wall Street guy trading in you know,
• 20:35
  Speaker 1: the boring old stock markets, bond markets, things like that.
• 20:38
  Speaker 1: It just kind of begs for SMA, yes and my munis,
• 20:42
  Speaker 1: thank you very much, just kind of begs for some
• 20:44
  Speaker 1: regulatory oversight. So where do we stand on that? You know,
• 20:49
  Speaker 1: not really not really far into it. I mean this
• 20:53
  Speaker 1: space is as of now completely unregulated, which is why
• 20:56
  Speaker 1: you're seeing a lot of these uh you know, players
• 21:00
  Speaker 1: in this space come in and basically do whatever whatever
• 21:04
  Speaker 1: they want. I mean, the pump and dump scheme in
• 21:07
  Speaker 1: this industry and in this space is known as the
• 21:10
  Speaker 1: rug put right because creating a coin right now it's
• 21:13
  Speaker 1: so easy. There's all these different platforms that exists in
• 21:16
  Speaker 1: the DeFi space where you can basically go on log
• 21:19
  Speaker 1: in at a couple of parameters, and you know, ten
• 21:22
  Speaker 1: minutes or an hour later, you you have a coin
• 21:26
  Speaker 1: and then what a lot of times you know, uh,
• 21:29
  Speaker 1: and that a careers with sort of bad incentives do
• 21:32
  Speaker 1: is they'll create a coin, they'll mint it, they'll they'll
• 21:34
  Speaker 1: promote it, um, but they'll buy in early and then
• 21:37
  Speaker 1: they'll get a lot of other people to buy into it,
• 21:40
  Speaker 1: and that'll cause the price to go up, and then
• 21:42
  Speaker 1: all of a sudden they'll just pull all of their
• 21:44
  Speaker 1: assets and have the price falls. So whoever invested basically
• 21:47
  Speaker 1: loses their money. And that is something that's happening pretty frequently.
• 21:51
  Speaker 1: And I mean, but can we I want two things
• 21:54
  Speaker 1: I have to say because I'm getting a lot of
• 21:56
  Speaker 1: messages here. Um, it's dog coin, not dodge coin. Doge.
• 22:01
  Speaker 1: It's almost it's supposed to be fun to say. It's
• 22:04
  Speaker 1: a ridiculous name. Um, like you know, a royal uh
• 22:09
  Speaker 1: person in Venice the doge. Um. I think though someone
• 22:14
  Speaker 1: like Eric right, um, who's who's chugging bud light my
• 22:17
  Speaker 1: ties and he he knows that this is a scam, right,
• 22:22
  Speaker 1: I mean, everyone who's involved this isn't any worse than people, um,
• 22:28
  Speaker 1: you know, on oxygen, smoking a pack of Marlborough's in
• 22:31
  Speaker 1: a casino, you know, putting their life savings into the
• 22:35
  Speaker 1: slot machine or even walking around New York. I see,
• 22:38
  Speaker 1: you know, the least fortunate people are always in the
• 22:40
  Speaker 1: seven eleven buying all the scratch offs with the money
• 22:43
  Speaker 1: that you know, they don't have to lose, right, so
• 22:46
  Speaker 1: this isn't any worse than that. In fact, these people
• 22:49
  Speaker 1: on Wall Street bets they know what they're in, but
• 22:54
  Speaker 1: they don't they don't mind. And I think of the
• 22:56
  Speaker 1: reason why they don't um and this is based clearly
• 22:59
  Speaker 1: on you know, having spoken to a lot of these investors,
• 23:02
  Speaker 1: is that they're not spending their life savings into these coins.
• 23:06
  Speaker 1: Right We're talking about a couple of hundred dollars, which
• 23:09
  Speaker 1: in their minds is safer than spending it on a
• 23:13
  Speaker 1: lottery tation or going to a casino. Because if you
• 23:16
  Speaker 1: are able to spend enough time on social media where
• 23:19
  Speaker 1: you're seeing uh, these coins being talked about, promote it,
• 23:23
  Speaker 1: and you're able to strategically get in early and pull
• 23:27
  Speaker 1: your money out at the right time, it could work.
• 23:30
  Speaker 1: Is this a safe investment? Definitely? You know, definitely not.
• 23:33
  Speaker 1: There's so much prism to it. But at the end
• 23:35
  Speaker 1: of the day, if you put in two hundred dollars
• 23:38
  Speaker 1: or three d dollars. That's how much you lose, and
• 23:40
  Speaker 1: I think a lot of people are comfortable doing that.
• 23:43
  Speaker 1: All right, fascinating story. Mr Lena a gulf of Polo,
• 23:46
  Speaker 1: Thank you so much. He's a personal financier quarter for
• 23:48
  Speaker 1: Bloomberg News. Thanks for listening to the Bloomberg Markets podcast.
• 23:52
  Speaker 1: You can subscribe and listen to interviews with Apple Podcasts
• 23:55
  Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm
• 23:59
  Speaker 1: on Twitter at Matt Miller nineteen seventy three. On Fall Sweeney,
• 24:03
  Speaker 1: I'm on Twitter at pt Sweeney before the podcast. You
• 24:06
  Speaker 1: can always catch us worldwide at Bloomberg Radio