A G20 Country Will Adopt Bitcoin by Yr-End: CoinShares' Demirors

fifty one thousand dollars per coin. Let's get a sense of what's going on with bitcoin at All Things Crypto. We're fortunate to welcome our next guest, melt Him Demire's chief strategy officer for coin Shares Group. They have about four billion dollars in assets under management. Matt, what do you think is driving your Actually I can't wait to get her on the line because I have so many questions.

One of the products that coin share offers is an e t P and exchange traded product, and of course there haven't been any e t f s yet for buying bitcoin, and I think, you know, it's just why why why is they just haven't been allowed by regulators, you know, the Winkle Vye. We're trying to get one out there, and there are a number of, um, really reputable people working to get to get an e t

F out there. Um. One of the main problems, Paul, is that when you go and buy something like bitcoin that you don't understand in the first place, and you have to figure out where to put it in the wallet, then inevitably, as I did, you lose your password and then it's just lost forever. It's terrifying. So I'd rather be able to buy an e t F or um they sell an e t P and I wonder what

it is. It's apparently it's physically backed e t P. Alright, we have Mel tem back whether Mel Mel temp Demere's chief strategy officer for coin Chairs Group about some Thanks so much for joining us. I'd love to just get your thoughts initially here on what's driving bitcoin at Hey, guys,

great to be here, Thanks for having me. Um. Look, what's driving bitcoin is with driving I think all aspects in the macro market more broadly, a lot of drive powder on the sidelines, over five trillion of cash, higher record savings UM, and we're seeing asset prices going up across the board. Bitcoin is not immune to that. So I think the macro environment is definitely driving some of the inflows into bitcoin, but more than anything else, over the last six months, we have seen the sentiment and

demand for bitcoin shift dramatically. We have corporate treasurers and the renown spot managers, Bridgewater, black Rock, all of the world's largest asset managers now talking about and allocating to bitcoin. So overall, really, the way I think about it is sentiment more a brilliant, more ulish than ever. Sentiment translates into demand. There is more demand than ever. Bitcoin has a limited supply um. Only eighteen and a half million

in circulation today applies CAPTI twenty one million. Happens when you have something rare that there's a lot of demands for. As demand goes up, price goes up. And then the last thing I'll just mention from the market structure perspective, we're seeing record inflows week after week into structured products. Last week alone three million. First two months of this year, especially the first month and a half when we have to into February, over two billions of inflows compared to

seven billion for the entirety of last year. So yeah, I want to ask you about one of those. So I was looking at your exchange traded product. You've got physically backed e t P that offers exposure bitcoin. So what does that mean? Does that mean you hold bitcoin

basically in cold storage? For me if I buy the e t P exactly and more than that, we are the world's first asset manager to actually give you a certified aspectation from Armanino LP, one of the world's large audit firms, every thirty minutes our blockchain wallet and confirmed that that bitcoin is there. You can check that on our website as well. So we are the first ones to provide a blockchain based at a station where you can actually see we hold the bitcoin, you say, which

is pretty cool. Alright, So meltem it was a big news when Elon Muska and Tesla they put a billion five of bitcoin on their balance sheet. When will we see a G twenty economy brace bitcoin? You know what, I think, by the end of this year it will happen that you can you can print that that's bit to a print. I've predicted by the end of this year it will happen. Look at the end of the day. Um, I think there are a lot of jurisdictions right now

that are competing for talent and for business. You look at the exodus of financial services firms from New York. New York is not a friendly state for finance or for cryptocurrency for that matter. So businesses are going to go to jurisdictions where they are welcomed. And certainly as we look at the economic turmoil, UM, that's the resulting from this, this pandemic. The crypto industry is the growing industry, contributes billions of dollars in tax revenue, UM, creates a

lot of jobs. So I would not be surprised if one country, one twenty economy really tries to make itself appealing to crypto entrepreneurs who are dealing with an increasingly challenging regulatory environment. Got a target for us? Where do you think bitcoin is going into? Uh? You know, I say name or price, but no date or name and date and no price. Look, here's what else say. I have a hat that's been made for me that says bitcoin Henry K and I expect all you wearing that

hat for the end of this year. Wow, very good. What's the biggest risk to bitcoin, meltem It's had such a great room. What's the biggest risk thirty seconds the biggest risk, honestly, I think um cyclicality. Right so we're in an a bullish, a bulliant market cycle right now. There is a cyclical trend and bitcoin in a secular and beast. The clickal trends, I think can be challenging

to confidence. It's particularly investor confidence. So I think the thing we're really looking for is the futures curve and its trade or suniments. That's really gonna drive Tyson. Hey, malt Tom, thanks so much for joining us. As always, we love to get your thoughts on all things crypto. Meltemp demers, chief strategy officer for coin Share Group. US retail sales they surged in Januate by the most in

seven months, beating all estimates. So really just some strong numbers showing that the consumer, at least in January was quite active. Let's break down those numbers see what's behind them. We can do that with Craig Johnson. He's the president of Customer Growth Partners, joining us on the phone from Connecticut. Craig, thanks so much for joining us here. You look at the numbers today much better than expected. What do you think are the real drivers behind the consumer here? Well,

I guess as a number of drivers, we weren't surprised. Frankly. We we just issued our annual forecast for reach all um ten days or so ago, and we called for growth of eight point one percent year of a year. And that's exceptional growth, the strongest this century. Um. But if you look at the drivers behind you that you've got to start with personal income. Personal income has been rising. Uh. Job growth has been decent, not great, but over the

last you know, six or six months plus has been strong. Um. And uh. Last but other factor is is that the amount of personal savings that people have, households have on the balance sheet is exceptional. A year ago was about one point two trillion. Now it's double to two point four trillion. That's an an incremental one point two trillion dollars in dry powder available for spending. Uh. So these are some of the factors. Are other things are going anyway?

You know that people feeling better about vaccinations and so forth, and those are the factor key factors. I think it bears repeating your forecast, bears repeating you expect an eight point one percent growth annually in retail sales. And this is not including cars, gas, restaurants. Um that is huge and as you said, the biggest this century. Where do you think consumers are going to spend that money? What are they gonna buy? The Well, it's broad based across categories,

but the strongest growing categories. First of all, anything associated with a home, home of approvement, home furnishings, uh, etcetera. Uh, the online side of it is going to grow about twenty year of a year, again, very strong growth, and this January it was two year of a year. Uh, so that's that's a major category. Um. Uh. Personal care healthy and personal care is growing category. That's gonna rise.

And Uh. The other factor that comes into into it is is a small category but very strong, and that's sporting goods. This has been a stellar year for sporting goods. Anything associated with the outdoors, outdoor living has been strong. Creig. How much of that of your eight point one percent annual forecast is predicated upon additional fiscal stimulus? Um? Uh

really only modestly. We're assuming that there's gonna be First of all, there's existing uh incremental unemployment benefits, etcetera already in the system, and we're anticipating some increase, but only a modest increase. And we're in assuming it has to be the full you know, with one point nine you know, trillion dollars. Uh, it's just even a fraction of that

is included in our forecast. Uh. Most of the growth that we're seeing comes from the basics, in other words, job growth and then income growth that goes along with job growth. UH. And that's the key factor along with this this again the UH buoyant, buoyant factor of having one point two trillion dollars extra dry powder available to spin. Those are the those are the real key drivers. Are

you worried about rates at all? I mean, if people are going to spend money, um, and that's gonna boost prices, you'd assume if demand goes up and not, as you know, more than supply does, does the FED then eventually have to go to neutral and even thinking about shifting into drive. Um, we're anticipating we're already beginning to see some uh increases in pricing, obviously in in the in the energy sector that started to take up a very strongly over recent

days and weeks UH, and home related things. Otherwise, price of lumbers going up. So we are going to see some inflation coming into the mix. We don't anticipate it that it's going to be sufficient enough to be you know, like the olden days of you know, the early nine anything, nothing near that, But we do it just is going to take up a little bit. But we're not you know, the predicting freed UH decisions is above above my pay grade.

But we do anticipate some inflation creeping into into the mix. Correct. It's the biggest risk to your retail sales forecast this year. The biggest risk is if job growth jobs off again, job growth and personal income growth. That's that's that's the predetermined factor of retail sales and really evolved consumers spending UH and UH. The job growth has been a little flattish over the last month. It too strong for the last six or eight months, but but but a little

bit flattish the last month or two. And if that somehow takes a real downturn rather than steadily improving, that would be the biggest factor. And so that's that's something we're keeping our eyes on on it. But there's nothing on the horizon. Uh that that that says job growth is suddenly gonna start to drive dry up. You know, hopefully it'll continue and there won't be the kind of shocks that will uh that will trigger any kind of major job losses, and that would be the biggest risk.

Craig Johnson, thank you so much for joining us. We appreciate your thoughts and sharing retail sales forecast with us on the back of a very strong retail sales number for or January. Craig Johnson, He's the president of Customer Growth of Partners Based. He's up in a New Canaan, Connecticut. Again some very strong retail sales number suggesting that the

consumer is in pretty good shape despite the pandemic. Well, Texas and many other parts of the Midwest are experiencing unprecedented blackouts do in very large parts of just some brutal winter weather that has been just pounding that region of the country for days. Here, let's get the latest on what is going on on what the future might hold. We do that with Liam Denning. He's the energy, mining and commodities calumnists for Bloomberg Opinion. Liam, thanks so much

for joining us here. I know We're just a few days into this real crisis in Texas and other states. What do we know as to what happened? It just seems like it was a you know what some people are calling a perfect storm. Yeah, I mean these events have happened in the past in not to this magnitude, but all that all the way back to which is the first time, Um, we we saw blackouts in that

market or controlled blackouts to deal with a spike in demand. Um, you know that the complex answer will take a few months to come out, but the simple answer is that there was a spike in demand due to cold weather and also a lot of plants went offline again because of cold weather. The system in the power system in Texas is geared mainly to dealing with big increases in demand during the summer for air conditioning. Um, it's not really built or for dealing with a surgeon demand in

in in winter. And that's the problem here. So my my first thought was, Um, the grid is garbage? Is that right? Or do they have a really great grid into access? Uh, it's not so much a question that the grid is garbage. You know what we've seen is is really a bunch of a bunch of plants go offline, and that's due to several factors. So you know, we saw over the weekend, UH and in the last couple of days, you know, people blaming wind turbines because they

stopped turning because of a build up advice. That's true to some degree, but actually the wind turbines are a pretty small part of it. We all. We also saw the much bigger part was with gas plants shutting down, and that was due to a range of factors. Um partly because gas was being diverted to heating people's homes, so they're simply was have fuel available, but also plants just not being built for this weather. So you see valves freeze up, gauges freeze up, even a nuclear plants

shut down rain. Yeah, I saw a report of of of one nuclear reactor shutting down temporarily. I wasn't entirely sure what happened there, um, but but you know, these thermal plants rely on water for cooling, so there may be an issue there if if stuff is freezing up. So it's not so much that the grid is bad, it's it's that the the the infrastructure isn't built to um to take on this kind of event. I mean, if you want to think about it this way, it's

kind of an insurance problem, right. You have these events that happen from time to time, and it costs money to build things in a way that they can deal with it. And the fact is that the Texan market, you know, it's deregulated. The focus is much more on keeping prices low. And so when a plant operator is making that decision, well, do I invest X to deal with an event that might have and once every ten or twenty years, or do I keep my cost down Most of the time they're gonna say, I'll keep my

cost down. So Liam, you know, some arguments are being raised that climate change has to be addressed here as it relates to Texas and others power grids. I eat climate change producing I guess greater swings in whether it's maybe hotter summers colder winters, and that has to be incorporated into the design and maintenance of these systems. Is that getting any traction in places like Texas? Um, I'm sure it will gain traction among some. I'm not sure

it's gaining much traction in the Governor's office as yet. UM. But it's it's un ignorable. I mean, look, Texas never likes to um to be compared to California, but in this respect they're united. You know, California faces growing problems with wildfires due to climate change, and we've seen the havocates reeked on the grid there. Texas is going to face extreme temperature variations as well. And it's not just

the power system that isn't built for it. You know, there's a lot of big houses in Texas that take a lot of heating and cooling. They aren't well and insulated. You know, there's an urban planning issue here as well, and you know it's it's tempting to go on TV and say, well, it's all the wind turbine spault, but um, you know, ideology is a good way of getting people's blood boiling, but it won't actually keep them warm, you know what I mean. I'd say I'm a huge fan

of Texas. Visit Dallas as often as I can, and I just love how big everything is, from the houses to the truck's. The only thing not big is the gas bill when I when I fill up my gigantic F three fifty duly there. Well, I want to ask you throw you a bit of a curve ballium since we got you, and I'm looking through all your opinion columns. I just just recently watched this Bill Gates documentary on Netflix. I'm sure, well, I hope we've all seen it. It's

really good. What do you think about nuclear? I mean, seems like everyone just passes it over right away, but the world's smartest man's figured out a way to make it safe. Well, here's the issue with nuclear. So there is a safety issue, and there's a public perception issue, But I think the bigger problem with nuclear is really a capital markets issue. Right If you if you think about it, if you're going to build a nuclear plant, it's going to cost you, you know, five nine billion

dollars to build this thing. It's probably going to take you the best part of a decade to build it. For that kind of investment to pencil out, you've got to be really certain about what's going to be happening with power prices and demand over the next forty or fifty years. And what we've seen in the past several decades is in deregulated electricity markets, nuclear has become less popular because it costs a lot of money and you have to take a big upfront risk on you know, expose,

expose risk, exposure to two prices and demand. And that's why a lot of these plants you know, don't get built, particularly because they also tend to run over budget, take longer to build. That's why we tend to see more nuclear panths being built in in regulated markets, you know, like like China and that sort of thing. So, you know, nuclear is fine and it has real advantages in terms

of dealing with addressing issues of climate change. The one issue it cannot deal with or has struggled to deal with, is it costs a lot of money and it represents a lot of risk. Liam Denning, thank you so much. We appreciate your thoughts as always on this crazy, crazy story in Texas and other parts of Midwest. Hopefully they get some release soon. Liam Denning, Energy Mining and Commodities Calms for Bloomberg Opinion. You can read liam work and

that of our Bloomberg Opinion columnists. They do great, great work Bloomberg dot Com, Slash Opinion or O P. I N Go on the Turn. Why I recommend you take a look at that work again. Liam Denning on the energy business, and what is going on down in Texas with those rolling blackouts that news reports suggest will go on at least for another couple of days. Well to me, I guess one of the more interesting developments in the US economy over the last decade or so is the

growth of the gig economy. Think Uber and Lift and the in the real key to the economic model for a gig company like Uber and Lift is that they're drivers in this case are deemed contractors and not employees, and that has a lot of implications. Let's dig down deep on that issue. We can do that with josh Idolson, labor reporter for Bloomberg News. So, Josh, you know in California or I know you're based California voted. The voters actually voted to classify Uber Lift drivers as contractors. What

are the implications of that. The implications of that vote substantively and politically have been huge. There was a two million dollar ballot measure campaign by gig companies in California which secured passage of Prop. Twenty two. This measure making workers under California law contractors and not employees if they're doing app based driving, whether it's for delivery or passengers.

That means people are excluded from a whole range of protections that California employment law provides employees, though they are provided an alternate suite of more circumscribed benefits. Why why, why why would I mean? I think of California as a super progressive state, and um, whenever I, well, I take uber's a lot, or I did before the lockdown. Whenever I take an uber, I think this poor guy is working like sixteen hours a day just to pay

off his lease. Um, why would such progressive people vote to m make this guy's life so much harder? Well, some of the polling suggests that some of the people who voted for Prop two thought that it would ensure benefits for workers that they might otherwise not have. Certainly, part of the messaging from the companies, both in advertising and in messages they put in their own apps, suggested that workers would not have these jobs at all if

the ballot measures didn't pass. This is something that has been part of the debate for a long time, is these companies saying their business model and therefore their workers likelihoods,

depend on treating workers as contractors. Meanwhile, you have some workers and advocates and lawmakers who say this is just a new modern version of an argument that companies have always made that they need an accept shin station and have to pay people the same minimum amount for each hour of their work that others do, and the fact that it happens during an app doesn't change the potential nature of that debate. So how does the proposed fifteen

minimum wage does it? That does that impact you know California or just gig economy workers in general. Well, minimum wage is a great example. The federal minimum wage, like the federal labor rights in the National Labor Relations Act, applies to employees, not to contractors. So under federal law, like under state law, if you're considered a contractor, you are excluded from many of the protections that the New

Deal in trines for workers. Now, what makes this particularly complicated is someone can be an employee under one law

and not under another. So while the companies have one Crop twenty two in California, that doesn't in and of itself protect them from being found under federal law, to the employers that are under on the hook for what they haven't done under federal law, Josh, so many, uh so many Americans work now in the gig economy, not just in California but across the country, and I'm just wondering if you have any insight as to how they are being supported by the stimulus measures that we you know,

that we got under President Trump, that we're expecting under President Biden. Are there are there any um exceptions made to try and help these gig workers who are hard

to kind of value. Well, one of the things that was passed last year was the p u A, a separate unemployment system for people that were not considered employees, and there was disagreement amongst some advocates about whether gig workers should be except or accepting that program or pushing to get full unemployment benefits as employees, as some agencies, such as in New York have concluded some of these gig workers are entitled to because they found they actually

are employees and not contracted. Josh talked to us about contractors, because there's a lot of companies use contract employees to kind of you know, on different demand, seasonality thing things like that. What's the impact of gig workers on those folks.

So what gets talked about as the gig economy now in some ways is a face of something that has existed for many, many decades in the United States, as I talked about in Business Week, even in the early years of the National a Relations Act in the nineteen fourt you had William Randolph, First Publishing Company going to the Supreme Court arguing that it's news these were not employees.

And while they lost at court, the company then ultimately was indicated in that Congress passed the law specifically excluding independent contractors. So you've had these controversies about so called misclassification of workers of contractors in industries from construction to education to mixed martial arts the Big economy, and fact is a modern face of that modern face of that. Hey, Josh, thanks so much for joining us. Josh Idols, Bloomberg Labor Reporter,

joining se Careet. Josh's stories featured in the new issue of Bloomberg Business Week magazine, on newsstands and at Bloomberg dot com. But clearly that is a key key issue for the gig economy employees for contractors. This thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews of Apple podcast, Asks or whatever podcast platform you prefer I'm Matt Miller, I'm on Twitter at Matt Miller three. And I'm fall Sweeney. I'm on Twitter

at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio