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Intel Shares Plunge After Outlook Hit by PC Slump, Supply · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios.
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  Speaker 2: Podcasts. Radio.
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  Speaker 3: News.
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  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 4: I want to dig into Intel a little bit more
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  Speaker 4: because you look at that move today, down 28%. This is,
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  Speaker 4: of course, after we saw Alphabet lose about a quarter
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  Speaker 4: of its value as well due to disappointing earnings. Kunjan
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  Speaker 4: Sorbani is Bloomberg Intelligence's senior semiconductor analyst, and he joins
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  Speaker 4: us now from San Francisco. And this is not good news,
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  Speaker 4: especially when you consider, Kunjan, that the U.S. government, that
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  Speaker 4: is taxpayers, owns a big chunk of Intel as well.
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  Speaker 3: Yeah, I mean, look, there was a lot of surprises
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  Speaker 3: on the negative side. You know, we didn't expect, most
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  Speaker 3: people are aware PC market does not have like strong tailwinds,
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  Speaker 3: but we didn't expect this kind of a weakness, which
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  Speaker 3: is really hurting them because even as of last quarter,
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  Speaker 3: PC remains the largest revenue segment for the company. And remember,
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  Speaker 3: it's also the highest gross margin, one of the highest
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  Speaker 3: gross margin segments. So any revenue loss there really impacts
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  Speaker 3: the top line as well as the gross margin. The
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  Speaker 3: only sort of good news is that their server CPU
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  Speaker 3: demand continues to stay strong. But however, again, the supply
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  Speaker 3: constraints on the wafer side, on the substrate strides are
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  Speaker 3: really limiting on how much they can ship. So there's
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  Speaker 3: not enough offset coming from data center or not enough
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  Speaker 3: goodness coming from data center to offset all the weakness
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  Speaker 3: in the PCs.
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  Speaker 5: What's going on with the PC market? What's the drivers there?
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  Speaker 3: Yeah, I mean, so we are all aware about the
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  Speaker 3: memory crunch happening, right? So what's happening is most of
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  Speaker 3: the memory players are allocating their capacity towards the better ASV,
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  Speaker 3: better margin, high growth data center market. So that takes
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  Speaker 3: away capacity from the PC side. Plus, memory prices in
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  Speaker 3: general have just skyrocketed, almost doubled in the 18 months
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  Speaker 3: and are expected to grow at least on the low
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  Speaker 3: level 50%. Some are claiming 70% to 80% next year. So,
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  Speaker 3: you know, PC are a very consumer company. exposed markets.
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  Speaker 3: So there's a lot of price sensitivity there. So the
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  Speaker 3: combination of memory prices being so high makes the bomb,
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  Speaker 3: the bill of materials to build a PC higher, plus
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  Speaker 3: memory makers allocating supply away from PCs. The end result
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  Speaker 3: of all of that is PC makers don't want to
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  Speaker 3: build up inventory. They are worried about it and they
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  Speaker 3: can't push down these prices to consumers because that also
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  Speaker 3: impacts the demand.
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  Speaker 4: Intel, of course, has been trying to move into the
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  Speaker 4: AI business as well, and it has a data center
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  Speaker 4: and AI unit. How did it do there?
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  Speaker 3: That was a segment they did really good. They beat
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  Speaker 3: through the estimates and they've also guided it forward pretty well.
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  Speaker 3: More importantly, despite the PC headwinds, they're still guiding the
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  Speaker 3: company to grow, the total revenues to grow in 2027.
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  Speaker 3: And we believe that is mostly coming from the goodness
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  Speaker 3: in DCAI, which is the data center AI business.
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  Speaker 5: Kunjan, that doesn't sound like there's an easy fix here.
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  Speaker 5: It just seems like maybe it's just time.
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  Speaker 6: Is that where we are?
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  Speaker 3: It is, but I think the reaction you're seeing is
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  Speaker 3: a driver of a couple of things. Look, we have
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  Speaker 3: seen this sort of stumble towards the goal line a
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  Speaker 3: couple of times with Intel. It took them almost four
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  Speaker 3: quarters to get the gross margin going to the levels
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  Speaker 3: that they were in 3Q. And now again, the gross
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  Speaker 3: margins that they're guiding down to almost 500 basis points
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  Speaker 3: per below the street in 4Q. This is like you're
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  Speaker 3: back to last year, right? So we have seen these
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  Speaker 3: tumble in the same stories a couple of times again.
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  Speaker 3: And I think that is where investors are really getting impatient.
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  Speaker 2: Stay with us.
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  Speaker 6: More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 1: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
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  Speaker 1: you get your podcasts or watch us live on YouTube.
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  Speaker 5: Amazon shares down about two and a half percent here
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  Speaker 5: today after the company reported greater capital spending than anticipated
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  Speaker 5: and the slowest growth in the core e-commerce business in
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  Speaker 5: three years. Let's break it down a little bit more
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  Speaker 5: with Poonam Goyal, senior U.S. e-commerce and retail analyst at
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  Speaker 5: Bloomberg Intelligence. Poonam, what did you take away from the
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  Speaker 5: Amazon results here?
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  Speaker 7: Yeah, so look, the print looks like things have slowed,
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  Speaker 7: but they really haven't. If you were to look at
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  Speaker 7: 2Q and 3Q collectively, because you do need to take
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  Speaker 7: into account the Prime Day shift, which moved the event
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  Speaker 7: into 2Q from 3Q, things are very healthy. In fact,
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  Speaker 7: I think the e-commerce business is growing very nicely and
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  Speaker 7: continues to show share gains. Where it's most impressive is
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  Speaker 7: on grocery. Now, this is a segment that Walmart, we
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  Speaker 7: would say, has traditionally underperformed, but has been making a
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  Speaker 7: lot of headway to really increase frequency here. And when
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  Speaker 7: you do shop for grocery, you spend two times more
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  Speaker 7: on adjacent other categories.
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  Speaker 4: You look at the Amazon Web Services business, the cloud business,
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  Speaker 4: and that's picked up this year. And normally, I think
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  Speaker 4: that's something investors would really focus on and reward the
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  Speaker 4: stock for. Yet, what does it say about the environment
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  Speaker 4: that they reacted instead to the core e-commerce business?
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  Speaker 2: Sure.
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  Speaker 7: So I think why the shares are down today is
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  Speaker 7: less to do with the artificial slowdown we see in
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  Speaker 7: e-commerce and the strength that we see in cloud services.
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  Speaker 7: It's really to do with the rising CapEx that we
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  Speaker 7: will see next year and in future years to make
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  Speaker 7: room for investments in the cloud business. That's yielding in
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  Speaker 7: cash flow being down. And when free cash flow is negative,
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  Speaker 7: we think it'll continue to stay suppressed because CapEx will
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  Speaker 7: continue to rise. That's the real issue and why the
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  Speaker 7: shares are trading off.
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  Speaker 5: So I am looking at consensus kind of free cash
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  Speaker 5: flow numbers negative for this calendar year 26, negative by
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  Speaker 5: another $ 34 billion next year, and maybe being free cash
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  Speaker 5: flow positive in 2028. Does that seem kind of like
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  Speaker 5: the cadence the company's suggesting?
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  Speaker 7: I think we'll have to see where CapEx comes in, right?
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  Speaker 7: $ 220 billion for 2026. They said it will be higher
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  Speaker 7: for next year, and we expect it to continue to
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  Speaker 7: be higher. So at that rate, you know, you could
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  Speaker 7: argue that free cash flow could stay suppressed. But it
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  Speaker 7: all depends on, Paul, does it go from $ 220 billion?
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  Speaker 7: to 230 or does it go to 250 or does
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  Speaker 7: it go to 300, right? We're not sure where the
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  Speaker 7: number will come in.
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  Speaker 5: Yeah, I'm just looking at the consensus on the FA function,
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  Speaker 5: 220 billion in CapEx this year and 26 going to
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  Speaker 5: 290 billion. next year, and almost 330 in 2028. So
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  Speaker 5: the street's kind of focusing on, these guys are going
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  Speaker 5: to be spending for a while.
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  Speaker 2: Yeah.
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  Speaker 4: And the company did not commit to any kind of number.
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  Speaker 4: They just said it would increase meaningfully in 2027. So
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  Speaker 4: you can interpret that however you want. What does that mean, Poonam,
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  Speaker 4: in terms of how Amazon is going to raise more capital?
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  Speaker 4: Is it going to do so through a stock sale,
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  Speaker 4: through selling bonds?
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  Speaker 7: It could be either. It could be through equity issuance
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  Speaker 7: or through the bonds. They haven't clearly stated what the
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  Speaker 7: intent will be. I think we have seen other tech
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  Speaker 7: companies do the same as CapEx has clearly risen. So
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  Speaker 7: it's definitely something that they will be looking into, we think.
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  Speaker 5: All right. So here we are about to flip the
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  Speaker 5: calendar to November. What's the feeling from all the retailers
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  Speaker 5: you talked to, Poonam, about holiday season? What's the expectation
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  Speaker 5: for the the health of that season.
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  Speaker 2: Yeah.
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  Speaker 7: So, so holiday is going to be strong, you know,
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  Speaker 7: irrespective of everything that we're hearing about inflation, gas prices,
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  Speaker 7: et cetera, consumers are still looking to spend. The industry
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  Speaker 7: outlook is for a roughly over a 6% gain online
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  Speaker 7: and online sales for the holiday season. We think Amazon's
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  Speaker 7: going to grow faster than that. So Amazon is going
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  Speaker 7: to be taking share of, It's going to be about
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  Speaker 7: where do you want to spend? Where do you want
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  Speaker 7: to stretch your dollars? Who's going to get your dollars?
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  Speaker 7: Consumers will buy, but do they buy at Amazon or
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  Speaker 7: do they buy at Walmart?
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  Speaker 2: That's the key question.
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  Speaker 7: We think they buy at both and the middle gets
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  Speaker 7: squeezed again.
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  Speaker 4: It goes back to how if you're organized and you
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  Speaker 4: actually buy things during Prime Day for the holidays, you
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  Speaker 4: can get that out of the way.
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  Speaker 6: Like you, like you were. No, I wasn't at all.
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  Speaker 4: I don't do that at all. How much has Amazon
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  Speaker 4: trained the consumer to do just that, Poonam?
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  Speaker 7: You know, The thing is, Amazon has trained the consumer
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  Speaker 7: to look for deals over Prime Day, over Black Friday,
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  Speaker 7: over Cyber Monday. We know those days are going to
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  Speaker 7: have the greatest discount. But the question is, when you
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  Speaker 7: see something on sale, do you want to wait until
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  Speaker 7: Black Friday or Cyber Monday to get it? And do
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  Speaker 7: you have your list really fully together at Prime Day
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  Speaker 7: and Black Friday? So there will continuously be a flow
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  Speaker 7: of purchasing, but those deal-driven days will definitely have higher volume.
• 9:08
  Speaker 6: Stay with us. More from Bloomberg Intelligence coming up after this.
• 9:15
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 9:19
  Speaker 1: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
• 9:22
  Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever
• 9:26
  Speaker 1: you get your podcasts or watch us live on YouTube.
• 9:30
  Speaker 5: Again, I'm going to go down to Baton Rouge, Galveston.
• 9:33
  Speaker 5: I'm going to build myself a refinery because those people
• 9:35
  Speaker 5: are making money hand over fist. Big oil reaped more
• 9:39
  Speaker 5: than $ 50 billion in windfall profits as conflicts in the
• 9:42
  Speaker 5: Persian Gulf and Russia drove refining results to record highs.
• 9:46
  Speaker 5: It's a good time to be an oil analyst. It's
• 9:48
  Speaker 5: a good time to talk to Vince Piazza. He's a
• 9:50
  Speaker 5: senior equity analyst at Bloomberg Intelligence covering all the oil
• 9:53
  Speaker 5: and gas names, which he's done for decades. He knows
• 9:55
  Speaker 5: all these players. He's seen all the cycles come and go.
• 9:58
  Speaker 5: Talk to us about some of the earnings. you're seeing here, Vince,
• 10:01
  Speaker 5: coming out of the big oil companies you follow.
• 10:04
  Speaker 8: Yeah, you know, the refining side once again coming through
• 10:08
  Speaker 8: for both Exxon and Chevron for both, you know, utilization
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  Speaker 8: very strong, throughput very, very strong, the spreads extremely strong.
• 10:19
  Speaker 8: So we're coming close to that part of the cycle
• 10:22
  Speaker 8: where you ask yourself, how much can things get better?
• 10:26
  Speaker 8: You have WTI 104, Brent 117 today, both Exxon and Chevron.
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  Speaker 2: Hitting new highs.
• 10:35
  Speaker 8: Valuations approaching the upper bound of the last five years.
• 10:41
  Speaker 8: So you ask yourself, does it feel like you're close
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  Speaker 8: to a peak? If we have benchmarks that continue down
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  Speaker 8: this path over 100 bucks, You could see a lift
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  Speaker 8: in 4Q earnings.
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  Speaker 2: But how do things get better from here? Hard to say.
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  Speaker 8: So if you're an investor in these names and you're
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  Speaker 8: reading the tea leaves aside from war.
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  Speaker 2: Where would the benchmark be?
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  Speaker 8: So I think as I scrub the models for 2027,
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  Speaker 8: I'm starting to get a little bit more cautious with
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  Speaker 8: respect to the earnings cadence from here, aside from any
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  Speaker 8: kind of benefits of 4Q. The one thing I would say, Paul,
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  Speaker 8: is that these guys are throwing off a boatload of
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  Speaker 8: free cash flow. $ 19 billion this quarter alone for Exxon.
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  Speaker 2: Net debt is down significantly. The cash is up.
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  Speaker 8: So you wonder what happens for 2027 if share buybacks
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  Speaker 8: are going to be held relatively flat. That's a lot
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  Speaker 8: of firepower to go into a year of uncertainty.
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  Speaker 4: So that brings me to my next question. What do
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  Speaker 4: they do with all that cash? I mean, share buybacks
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  Speaker 4: is kind of an obvious answer. Of course, these are
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  Speaker 4: dividend paying companies, but how else do they deploy it?
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  Speaker 8: So Exxon and Chevron have acquired in the past. You know,
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  Speaker 8: Chevron is digesting Hess after a bruising battle with Exxon. Exxon,
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  Speaker 8: of course, bought Pioneer in the Permian. As you think
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  Speaker 8: about the next growth cycle, what happens as you push
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  Speaker 8: past 2027 and 2028? Is there more LNG to invest in?
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  Speaker 2: Are there other companies here in the U.S.
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  Speaker 8: to a purchase, just given that the relative multiple advantage
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  Speaker 8: and the cash hoard that they have.
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  Speaker 2: You mentioned the dividends.
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  Speaker 8: Yes, they do pay modest dividends, so you could see
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  Speaker 8: some upside there if trends do continue. Again, Exxon held
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  Speaker 8: its share of purchases relatively flat for 2027, so there's
• 12:50
  Speaker 8: a lot of firepower there for both not only inorganic growth,
• 12:54
  Speaker 8: via M & A, but also organic growth as well,
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  Speaker 8: as it has other projects it can invest in in
• 13:01
  Speaker 8: Guyana and elsewhere.
• 13:02
  Speaker 5: Hey, Vince, we're hearing from over the last month or
• 13:05
  Speaker 5: two from the Trump administration and from some third party
• 13:09
  Speaker 5: observers that, you know, quite a lot of oil is
• 13:11
  Speaker 5: getting through this trade of Hormuz here. If so, why
• 13:15
  Speaker 5: is Brent at $ 117 a barrel?
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  Speaker 2: Yeah, that's what I'm questioning as well, right?
• 13:20
  Speaker 8: Because the reality on the ground is things are getting
• 13:24
  Speaker 8: closer to a more normal cadence through the Hormuz.
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  Speaker 2: But there's also the geopolitical risk of collapse.
• 13:35
  Speaker 8: Potential strikes after the midterms and what that could mean
• 13:39
  Speaker 8: for global balances as well. So I think there's a
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  Speaker 8: lot of uncertainty there. And that's why you're seeing the
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  Speaker 8: geopolitical risk premium remain in WTI and also Brent. And
• 13:52
  Speaker 8: that's why you're seeing these names still have some life
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  Speaker 8: to them as we get closer to the end of
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  Speaker 8: this cycle.
• 13:58
  Speaker 4: How do you think about the midterm elections and the
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  Speaker 4: risks of a Democratic controlled Congress? What does that mean for?
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  Speaker 8: Well, yeah, I guess it's more of a drumbeat with
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  Speaker 8: respect to a windfall profits and the the excess cost
• 14:17
  Speaker 8: at the pump for a lot of consumers with these
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  Speaker 8: high prices. The only thing is the refiners are really
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  Speaker 8: going full out. It's not like they're holding back utilization
• 14:25
  Speaker 8: on the refining side. So they are maxing out. So
• 14:30
  Speaker 8: that's not the issue. And I think there's going to
• 14:32
  Speaker 8: be a little bit of uncertainty post and midterms, but
• 14:35
  Speaker 8: a lot of it is wait and see. And that's
• 14:37
  Speaker 8: why there is a great deal of uncertainty and volatility
• 14:39
  Speaker 8: in the overall commodity space for the energy markets.
• 14:43
  Speaker 5: So as you well know, Vince, I'm an astute viewer
• 14:46
  Speaker 5: of Landman. I know all things about the energy business,
• 14:49
  Speaker 5: the oil and gas business here. West Texas doesn't necessarily
• 14:53
  Speaker 5: like WTI over $ 100 a barrel because that might be
• 14:56
  Speaker 5: some demand destruction here.
• 14:59
  Speaker 6: Are we seeing that at all?
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  Speaker 2: Well, you know what?
• 15:02
  Speaker 8: I think comments from, I think it was BP or
• 15:05
  Speaker 8: Shell earlier said they are seeing some demand destruction. Look,
• 15:09
  Speaker 8: $ 100 crude does no one any good because it does
• 15:13
  Speaker 8: reduce demand. As I think we've talked about in the past, Paul,
• 15:17
  Speaker 8: you know, $ 100 is right at that level of demand destruction.
• 15:23
  Speaker 8: $ 60 is no good for the industry. That $ 75 to
• 15:27
  Speaker 8: $ 80 is that sweet spot where everyone feels that there's
• 15:31
  Speaker 8: enough profitability and return on that investment and the consumer
• 15:35
  Speaker 8: isn't hijacked at the pump. We're not there yet. And,
• 15:40
  Speaker 8: you know, quite frankly, I thought we were going to
• 15:42
  Speaker 8: get there with tensions being ratcheted down some. But in
• 15:47
  Speaker 8: the last month or so, we've seen these marks scream
• 15:52
  Speaker 8: off the terminal here. And that's really a function of
• 15:57
  Speaker 8: the ratcheted up of tensions as we get closer to
• 16:00
  Speaker 8: the midterms and after the midterms as well.
• 16:03
  Speaker 2: Stay with us.
• 16:04
  Speaker 6: More from Bloomberg Intelligence coming up after this.
• 16:10
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 1: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
• 16:17
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• 16:20
  Speaker 1: you get your podcasts or watch us live on YouTube.
• 16:25
  Speaker 4: So I look at what's happening in markets, and once
• 16:28
  Speaker 4: upon a time, Bitcoin was kind of seen as an
• 16:30
  Speaker 4: uncorrelated asset, something that you could put money into and
• 16:35
  Speaker 4: find that it would survive downturns in other assets like stocks.
• 16:39
  Speaker 4: That's no longer the case, it feels like, because when
• 16:42
  Speaker 4: it's not being stolen by North Koreans.
• 16:45
  Speaker 6: It trades like crazy. A risky asset.
• 16:47
  Speaker 3: A risky asset, yeah.
• 16:48
  Speaker 4: But it's the being stolen by North Koreans part that
• 16:50
  Speaker 4: I want to focus on because another incident of a hack,
• 16:54
  Speaker 4: this time into Binance, is shaking the foundations of crypto.
• 16:57
  Speaker 4: Emily Nicole is our Bloomberg Digital Finance reporter joining us
• 17:00
  Speaker 4: from London. Emily, what can you tell us about this
• 17:04
  Speaker 4: Binance hack as we see Bitcoin drop below $ 77, 000 right now,
• 17:07
  Speaker 4: down 2.7%?
• 17:12
  Speaker 9: About 6 billion was stolen. That's what we know so far.
• 17:15
  Speaker 9: But it does seem like things are mostly contained. I mean,
• 17:18
  Speaker 9: we've all been saying to each other this just today,
• 17:20
  Speaker 9: you know, normally when the biggest exchange in the world
• 17:23
  Speaker 9: gets hacked, you'd expect there to be some more fallout
• 17:27
  Speaker 9: than just Bitcoin sinking to kind of a multi-month flow
• 17:30
  Speaker 9: and everything else is kind of ticking along. It does
• 17:32
  Speaker 9: seem to be pretty contained, though, as you kind of
• 17:34
  Speaker 9: pointed out earlier. So we've seen Binance come out and
• 17:37
  Speaker 9: say that they can fully cover the losses that have
• 17:39
  Speaker 9: been mentioned there. They're also looking at trying to recover
• 17:43
  Speaker 9: some of it through the normal routes, through law enforcement.
• 17:46
  Speaker 9: Some of it's been frozen, but their company funds could
• 17:48
  Speaker 9: cover it regardless, even if they didn't recover those funds
• 17:52
  Speaker 9: the other way. So it's all kind of still moving,
• 17:54
  Speaker 9: still progressing along, but generally everything seems pretty stable.
• 17:58
  Speaker 5: It does, actually, given the magnitude here. I've seen in
• 18:02
  Speaker 5: the Bloomberg reporting blockchain intelligence firms have pointed to North
• 18:06
  Speaker 5: Korea as behind the Binance heist.
• 18:10
  Speaker 6: What do we know there?
• 18:13
  Speaker 9: So several blockchain analytics firms have already kind of done
• 18:15
  Speaker 9: the work on trying to mapping how the money moved
• 18:18
  Speaker 9: after it left Binance. And the way that they look
• 18:20
  Speaker 9: at that, it kind of tells us whether or not
• 18:22
  Speaker 9: this might have been North Korea. And what they can
• 18:24
  Speaker 9: say is that some of the patterns that we're seeing
• 18:26
  Speaker 9: and how those funds are being laundered so far match
• 18:29
  Speaker 9: what the DPRK has done in the past. And so
• 18:31
  Speaker 9: they're able to kind of say with a degree of
• 18:32
  Speaker 9: confidence that this is North Korea behind it. They can say,
• 18:35
  Speaker 9: you know, oh, well, the funds have been moving through
• 18:38
  Speaker 9: these particular mixing platforms that help kind of obscure the
• 18:41
  Speaker 9: transaction paths, make it harder for you to follow the
• 18:43
  Speaker 9: tokens through the blockchain ledgers. And they can say, you know,
• 18:47
  Speaker 9: they're doing a certain amount of automation as well, moving
• 18:49
  Speaker 9: funds automatically back and forth to certain wallets to try
• 18:51
  Speaker 9: and make it harder to follow as well. So all
• 18:53
  Speaker 9: of that is kind of painting a picture that North
• 18:55
  Speaker 9: Korea was behind this.
• 18:57
  Speaker 4: And this isn't the first time the North Koreans have
• 18:59
  Speaker 4: been behind some crypto hacks as well. It really raises
• 19:02
  Speaker 4: questions over how secure owning Bitcoin is. Does this discourage
• 19:09
  Speaker 4: new entrants from coming into this market?
• 19:12
  Speaker 9: It obviously, every time this happens, it does discourage new entrants.
• 19:15
  Speaker 9: I mean, nobody likes to buy something that they don't
• 19:18
  Speaker 9: think is safe. But from the people I've been speaking
• 19:20
  Speaker 9: to today, it seems kind of a bit of like, well,
• 19:22
  Speaker 9: this is just kind of what you get with crypto, right?
• 19:25
  Speaker 9: Like we're in a moment now where institutions are really
• 19:27
  Speaker 9: trying to move into the space, thinking about should they
• 19:29
  Speaker 9: allocate to Bitcoin? If so, how much? You can do
• 19:32
  Speaker 9: that through various means. If you're worried about touching the
• 19:35
  Speaker 9: crypto directly and having exposure to things like this, then
• 19:37
  Speaker 9: you can do things like buying a Bitcoin-tied ETF, for example,
• 19:40
  Speaker 9: versus the crypto asset itself. That comes with some fees
• 19:43
  Speaker 9: and some trade-offs, but also feels a little bit more secure.
• 19:46
  Speaker 9: If you're willing to touch the asset directly itself and
• 19:48
  Speaker 9: engage with a crypto exchange, like Binance, then that comes
• 19:51
  Speaker 9: with its own level of risk, but also the promise
• 19:53
  Speaker 9: of a higher reward. That's kind of what you get
• 19:56
  Speaker 9: when you buy into crypto. You have to be willing
• 19:58
  Speaker 9: to make that risk reward trade-off. And that's kind of
• 20:01
  Speaker 9: what people are saying right now. It's like, you know, well, Yes,
• 20:05
  Speaker 9: this could be a thing that turns people off from
• 20:07
  Speaker 9: joining crypto. It might turn off institutions from wanting to
• 20:10
  Speaker 9: deploy in it in huge size. But it also is
• 20:13
  Speaker 9: kind of part of part of how it works. You know,
• 20:16
  Speaker 9: you want that big return. You have to take this
• 20:18
  Speaker 9: with it as well.
• 20:19
  Speaker 5: Emily, just 30 seconds left here. What are we seeing
• 20:22
  Speaker 5: with funds flows to crypto ETFs?
• 20:27
  Speaker 9: Crypto ETFs, I mean, I haven't actually checked today, so
• 20:30
  Speaker 9: I'm going to be honest with that. But I mean,
• 20:31
  Speaker 9: in the last few weeks, they have been on the rise.
• 20:33
  Speaker 9: So that has been a positive sign for the industry.
• 20:35
  Speaker 9: I mean, Bitcoin itself has been at lows for the
• 20:37
  Speaker 9: last few months. It hasn't really been recovering in the
• 20:40
  Speaker 9: way people would have liked after it sunk a lot
• 20:42
  Speaker 9: over the summer. So ETFs have been a sort of
• 20:45
  Speaker 9: bright spot in that sense. Nothing super huge, no few
• 20:48
  Speaker 9: billion here and there. We'll have to wait for the
• 20:51
  Speaker 9: end of the week to kind of see what that
• 20:52
  Speaker 9: looks like for an overall weekly picture. And if the
• 20:54
  Speaker 9: institutions that were holding ETFs are worried by this today,
• 20:57
  Speaker 9: but I mean, broadly, you know, they shouldn't be affected.
• 21:00
  Speaker 9: We know the exchanges that custody the Bitcoin for these ETFs,
• 21:03
  Speaker 9: Binance is not usually one of them. So typically, I mean,
• 21:06
  Speaker 9: if it's the institutions who are kind of looking through
• 21:09
  Speaker 9: and actually making like a full risk assessment, then there
• 21:12
  Speaker 9: shouldn't be too much happening with it.
• 21:14
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