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It is Bloomberg Business Week. Donald Trump's moved to impost tariffs on major US trading partners, sparking a selloff in crypto. The index of smaller tokens at one point today was on track for the steepest two day route in almost three years. Sometimes hard to follow this stuff, given that they trade twenty four to seven Carol.
Exactly did you see when the headlines today were kind of all over the plane?
Did you see what happened with Ether? Though?
No, tell me what?
Okay, the second biggest crypto. It briefly plunged as much as twenty seven percent before pairing losses. If I go to COYP, go on the Bloomberg terminal, I can see what it's doing right now now down about seven percent.
I got to say, we follow crypto a lot. You do you do a show on Bloomberg Television. That's all about the crypto market. I mean they move around a lot, but the moves that we saw today pretty wild, even by crypto standards.
Kenna Rodd is the co founder and chief experience officer of solidust Labs. It calls itself the quote first crypto native security and compliance of tailored for digital assets. The company says it monitors more than eight trillion events each day to help make crypto safer.
Welcome back to business, We get to see you.
It's a pleasure.
Thanks for having me. I thought I talked too much last time.
Okay, you're welcome back anytime.
I do want to talk about the price action though, a little bit, because even for the even in the standards of crypto, a twenty seven percent, can I call it a flash crash?
Like?
What was that?
Well, dramatic response to dramatic events. I'd say in an asset class that he's I think is really important to remind her.
Okay, but hold on, we knew tariffs would happen. The President talked about that a lot on the campaign trail. So was it really dramatic?
Right?
Well, I think sometimes you know something happens, but we read something so unprecedented, the impact can still be more dramatic. I think it's an important reminder that as much as digital assets, Bitcoin, ethereum and the rest have matured, there's still nascent assets that can move very very fast.
You know, I'm a guy who's been in this industry.
For seven years, so I've seen them drop more and rise less in shorter periods of time.
So are you concerned with the rising correlation of this asset class with tax stocks, especially bitcoin?
So I wouldn't say I'm concerned. I think that in a lot of ways, it's demonstrates the maturity and the adoption, right. I mean, I think, and we'll talk a lot about regulation today, we're seeing a broad motion where digital assets are becoming more a more integral part of other financial markets.
So I think there's a.
Lot of positives to it. And again I think that you've seen cases where they correlated, You've seen cases where they didn't. You know, there are a lot of explanations in each case. But I think they're still young assets and it's really hard to predict.
Yeah, you know, I think there's one point that we thought it was going to be like a safe haven. Perhaps it didn't kind of work out that way today. So I mean I still I mean Tim and I talked about this a lot, like I still try to understand what we should think about what is crypto.
Right, Well, I think a safe haven is a cryptocurrency. I mean, a safe haven is a dangerous term, I think when it comes to capital markets, because nothing is one hundred percent safe. I think oftentimes you know, obviously beatquin is perceived as a hedge, specifically for inflation. So the safe haven element I think is true there because regardless whether the price is going up or down, it
cannot be inflated by a government. But ultimately, again, as Wall Street as dramatically increased it's involvement and is constantly becoming more involved in digital assets, I think it's natural to also assume that there will be some cases where there's more correlation.
Well, if governments get more involved, we have now a president in the White House who certainly seems much more interested in it in an upbeat way. So does that also then make it maybe more susceptible to the factors that affect traditional if you will, or boring out you know, our traditional boring assets that are out there, well, I'd.
Say that when you look at Washington these days, and I visited twice in the past two weeks, met met with more than twenty elected officials and their teams. There's a broad motion to figure out the right way to regulate crypto and essentially, you know, bring it closer to the family of other financial assets. So yes, i'd say it's one hundred percent part of the same momentum. I don't think it means that it will behave exactly like any like other asset classes in the long run.
So wait, so should we have in our investment pie? So how is it You've got stocks, you've got bonds, you've got cash, You've got is it alternative assets where crypto falls into and it's a little sliver.
Well, I think that's the case for a lot of portfolios today.
But how are governments thinking about it? Well, I think has our government after the meetings you've had.
So I think the governments generally see it first and foremost as an innovative power that can push you know, the financial industry forward. So you know, I think a lot of the support for the assets are just because they're innovative and they're pushing on infrastructure and efficiencies and a lot of things that haven't been changing. Find it's for a very long time. In terms of I think that that will ultimately lead to digital assets crypto just
being considered another asset class. So that again has its nuances, but you know, is an integral part of most portfolios depending on your risk appetites, etc.
Were you down in Washington, D C. For the inauguration any of the parties associated with it.
Yes, I wasn't to the inauguration, but I've been with a lot of the parties and conversations that ensued.
Yes, So I wonder what people talked about in relation to the Trump and Millennia coins, because there was so much news just ahead of the inauguration when these two we call the meme coins here at Bloomberg when they came out, and there was some also some reporting that I read about people within the crypto community not necessarily viewing it as a positive development within the industry.
How do you view it?
I think that there's a lot of there's a lot of ambivalence, there are views on both sides.
How do you view it?
So, I personally have not invested in the coin. I'm generally not particularly interested in meme coins. I think that the people who would defend it say that ultimately it's like a baseball card. Some people want to collect it now the Trump was inaugurated. There are a lot in the industry, and I think there's some truth to it who also sees it as something that the values or diminishes a little bit the credibility of the industry, And a lot of people don't appreciate it.
Just to be in the position of somebody listening or watching this right now, they might say, yes, but with a baseball card, I can hold it right with this, What am I actually buying when I buy the official Trump meme coin.
Well, you're buying an immutable proof that you're holding a digital asset. So in a lot of ways, it's harder to make disappear than a baseball card. I can't imagine how many baseball cards, well, in my case, soccer cards, I have in places where I'll never find them again.
So there are also advantages to it.
Again, the whole world is becoming more digital, you know, And I think there are a lot of people for whom that's not really a consideration, but for people for whom it is a consideration, don't buy it. I do think it is important to say, just to co your point that you know, there are people and many have been vocal about the fact that it's not necessarily appreciated because.
We take our industry very seriously.
That being said, the mean tooken world is a huge part of the industry and a lot of people really enjoy it. It's one where you have to take into consideration that those assets don't as we have the same kind of fundamentals you'd see with other assets, and you've got to be careful and do your researchers. There are a lot of scams out there as well.
Yeah, I think no. The Bloomberg rout about that, right, and the concern of the criticism was that it wasn't taking it seriously, you know, in terms of the digital space. Hey, one thing I want to ask you is that the presidents signed a measure to create a sovereign wealth fund. Would it be a dangerous measure to include cryptocurrencies and a sovereign wealth fund here in the United States if we our government.
Creates one, every asset has its dangers. Also in the Executive ordered listed you know that designed last week specifically on creating a crypto Task Force working group that includes also a score of considering you know, a bitcoin reserve. So there are risks, so there are also obviously a lot of opportunities. But I think that at this point you have you have endowment funds, you have pension funds that think it's important enough to include you know, digitalists
instir portfolio. I think it's just natural that the US government might consider that as well. You know, again, it's an asset that.
Taxpayer right ultimately is on the line or feels the losses correct, right, yes, of course, in a sovereign wealth fund, yes, or the citizens well.
I mean yes, but they're also filled the profits, right, which is part of the idea of a sovereign wealth fund. I think that, you know, thinking long term, to not at least consider digital assets as part of sovereign wealth fund would be silly because they're very They're the most successful assets in terms of growth over.
The past decade, I believe.
But that doesn't mean that they should be invested in blindly, not by anyone, and definitely not by the government. So it should be done.
With care, by the way, the official Trump according to coin market Cap has a market cap right now of three point seven billion dollars, down from close to fifteen billion dollars. Ken, thank you so much for joining us. Kenna Rod, co founder and Chief Experience Officer of Solidus Labs. Up next Edelman CEO Richard Edelman. It's just been a few weeks, exactly two.
Weeks, Carol.
Yeah, busy two weeks since Solal.
Trump was inaugurated. A lot has happened. Here's just a few things. A slew of executive orders. What is looking like it's turning into a trade war? Elon Musk making some big changes as part of his work on what he calls government efficiency, some very tense confirmation hearings and upheaval in the world of AI and more. And again it's only been two weeks.
Yeah, only early February, all right, So we wanted to know what CEOs are thinking, and that's why we have Richard Edelman with us. He's got a great, big macro view on all that is happening and what it means for the c suites around the globe. He Richard is chief executive officer of the global communications firm Edelman, and he joins us here in studio he's just back from Davos. Let's start there, because what a great start ar point.
And I've been talking to and Tim and I have been with folks that were in Davos, and it seemed like everybody wanted to talk about President Trump or artificial intelligence. But tell us your perspective.
So I think the American CEOs were quite bullish. They felt, you know, deregulation, lower taxes, a chance to you know, increase investment. Meanwhile, the European CEOs felt deeply depressed and they were nervous about trade, they were nervous about regulation. I heard one CEO tell me he has thirty five thousand data points to give to the EU on environmental regulation every year, and that's a huge burden. So also, I would say it was a very business like Davos.
You know, other than Trump's last day appearance and Malay of Argentina, there were very few government leaders, so it was a much more business like Davos.
It's interesting that you say that you're probably the second person to tell us in just a few days that the mood of European CEOs was pretty gloomy.
Well, they're gloomy because I think they feel trapped between the US and China. They have big sales in China, cars, et cetera. Their energy costs are high, their regulation is high, and frankly they're nervous about the German economy, the French economy, both of them wobbling along. So they don't have domestic demand like the US does.
So it's interesting, as you know, we navigate from day to day, hour to hour the headlines that come out of the White House, in the Oval Office, and so I am curious, was there a perspective among the global CEOs are more importantly the American CEOs, that it's kind of a wait and see that we think some of it is a lot of talk, and that ultimately, as you said, policies will make business sense and they might not be as extreme as some of the conversations around them are.
I think no, no, Look, I think our trust barometer came out in time for Davos, and the thing that was so noteworthy, Carol, is that we see the world slipping into grievance, and that's sixty percent of the world's moderate or high grievance, and especially in Germany, thirty five percent of people highly agrieved. Just before their elections. And
why is that? It's inflation, It's the sense that you know, my family won't be better off in the next generation, lack of hope, fear of job loss to AI and so I think business has every way to solve this. You know, give me a good job, reskill me, have affordable products. That's the playbook. And CEOs need to make sure that it's about their business.
Why do you think we see this happening around the world. You know, it's not this idea of grievance is not particular to one single country or one single region. What's Is this a post COVID phenomenon? Is it a rise of the cost of living phenomenon? Is it a globalization phenomenon?
Is all of the above? What is it?
It's it's absolutely It's like dominoes, And so, you know, you start with the mass class divide, and you have a battle for truth, and you have this problem of COVID five years on, where people mental health and other things, and then you have all the geopolitical issues and so all of this is a lot, and people feel continuously punched, and so I think they used to take it and just have fears, and then now they're aggrieved, and they're
prepared to fight back, and whether it's misinformation or even violence, this is what we start to see. And business has every reason to be concerned about this because business is distrusted by the highly aggrieved. It's different than most because business is the most component and most ethical except for
the highly agrieveed. So business has to try to pull people back from this cliff and make people feel as if they have good jobs, they can get well paid, they will be reskilled and can compete.
So what's the problem. Is it that workers aren't sharing in the profits? I mean, you know, we're in an earning season, we see it. I mean, companies are doing well, and is it a case that they're not sharing all of those with their workers.
Well, here's an example in Japan. There hasn't been really a raise for workers for thirty years, okay, and so you get the idea of why people in the lowest coretile of income feel deeply aggravated relative to the.
Higher ing So why aren't CEOs appreciating those workers at that level?
I think that they are in the sense that they use them, they put them in jobs. But the truth is there's been outsourcing there's been globalization, there's now AI. All of this is towards cost and effectiveness, and so CEOs are balancing a lot of these factors. But they do want employees to work hard and be satisfied, and the key to that is pay.
We saw CEOs two weeks ago stand behind the president at the inauguration, some exactly, not all. We saw many prominent ones there. In general, we have seen some CEOs share their views politically, more so in recent weeks, recent months.
Then we're sort of accustomed to.
You said, there's this idea that they're cheering deregulation, they're cheering lower taxes, But what about the chaos that's associated with the administration thus far.
Is it a distraction to them?
Is it what you get with Donald Trump because we knew that in the first term, or is it something that concerns them because they need to make decisions about their businesses in China, in Canada, in Mexico.
I think CEOs need to argue for agenda items that suit their business. So, for example, if trade is a key part of your business, you should go out and advocate for a free trade and say this is going to cause inflation or it's going to make my supply chain inefficient or it's actually going to cost jobs in America. But also the non American companies need to make the case for investing in the US, putting more manufacturing here, making sure that it's aligned to the president's agenda.
It's both.
But I don't believe that CEO should stick their heads up and be very I think they should do their businesses.
But you know, I want to go back to what you said. Sixty one percent globally have a moderate or high sense of grievance, which is defined by a belief that government and business make their lives harder and serve narrow interests, and wealthy people benefit unfairly from the system. I'm waiting for like the deluge of emails of like, yeah, we got that, Carol, Like that explains politics that are going on. But like Richard, how do is it just
a case of paying workers more. I'm not saying just I don't mean that, but I mean, is that the fix? Because there are a lot of disillusioned individuals here in the United States and around the globe I think just feel completely left behind.
So inflation is corrosive. Got to get inflation under control so that people feel as if when they run hard, they're not running into the wind. Second, they got to feel as if they have a chance for the future. Rescaling upskilling core. And then third is pay and continuous ability to get to a better place.
But it seems like such an easy fix. Why then aren't we getting there? Like paying workers more? We've had guests on talking about a living wage, and then some why aren't we Why isn't it being done?
Because we're not taking full advantage of what's possible. AI is actually an enhancement tool for workers to be able to produce more. I mean, in my business, I can see how much faster people turn out press releases and message points and things like this. Everyone's got to put AI into their workflows. Also, we've got to be sure this reskilling thing so that everyone feels as if he or she can compete, not just the twenty two year old is just out of school.
Because I feel like we've talked reskilling for years.
Yeah's true, but we've never done it. We've never done it in an effective way. And also, business can't do this alone. Business should do this with government and NGOs. And the secret here is NGOs, non governmental organizations, they're local. They're also actually believable for the high grievance people. This is not so business should partner with community organizations.
We were supposed to see reskilling after NAFTA, and obviously that didn't happen to the extent that many people thought it would or were told that it would. And we can see what's happened today as a result of some of the problems in a certain economic economies around the country.
How do you how do these workers use AI if.
They're not in you know, part of the knowledge economy, or if they're not writing press releases, if they're not writing message points like what is the way that for people to embrace AI rather than be scared of it.
So one of our clients, Honeywell, is using AI on the factory floor and making their workers more productive. That's the key to the future. And actually blue collar workers have much less job risk than white collar in insurance and other things where they're repetitive skills, so blue collar
workers could thrive. This is a very important message that most people haven't absorbed and we need to keep telling this, and we also need optimists and back in this country, we need to make sure that people believe again that the country can do better, because in the moment there's this inundation of negativity. And I think competence and ethics will get you so far. But if you want to run an eight minute mile, it's aspirational for me these days, but I have to believe that I can.
Yeah, I think it's I think it's fascinating that we also at the same time, I've been talking about American exceptionalism, like in comparison to what's going on in Europe and so on and so forth. But there's so many people in our society that don't feel that. You know, when we talk about stock market, well, well not everybody's in the market.
Only half the people are in the market, correct.
And I look in my world people I talk to a younger generational like I'm not going to have kids. How am I going to afford kids? I can't even buy a house, Like it's just crazy.
But again, the chance to get to optimism is based on specific actions, and if there's a national reskilling campaign or even by cities. I think this is interesting, Carol, the trust has gone local trust in my mayor, my company. My CEO is much higher than any nobody else. So this is a channel that companies should use.
Great to check in with you.
But Gopa, we've been speaking to you for years. In terms of the twenty fifth year of the trust Barometer, things better or worse?
What's the trend?
I think we're at a precipice. I think we are at a place now where we've got to reverse this trend to grievance because when people are aggressive, they actually reject innovation and they're scared and they fight any change, and we have to get them to a place where they accept change.
Richard, thank you as always. He is the CEO of Edelman and Richard Edelman joining us right here in our studio. I'm Krol Master a long with Tim Stenvic. This is Bloomberg Business Week.