FTX Bankruptcy Hearing and Crypto Contagion

as the savior of crypto. He's turned to the Middle East for cash for a crypto recovery fund, and Zoom's chief financial officer joins us to explain its slowest quarterly sales growth on record and plans to navigate the economic headwinds. But first, let's bring it back closer to our home.

It's a global story, of course, because it hits across the world, the ft X story, and we emerged well from the first ft X bankruptcy hearing on Tuesday, and it included an attorney representing the firm saying a substantium amount of ft x's assets are well missing. I speak it all down, but the most, Katie Greifeld shock Oal, we're almost becoming numb to it to certain degree, Katie, But what did you take away from the first hearing.

It was the fiery first day, I would say, in addition to what you were saying about, you know, the assets either being lost or stolen, this back and forth on the top fifty biggest creditors, the fact that their names are redacted. We don't know who they are. That was an interesting storyline for me because it's really unusual that actually their names wouldn't be made public. But there were at least two groups of crypto creditors. They sent

their lawyers there. One of those lawyers was protecting or were was working for members of that top fifty group, really arguing that their identities should be kept secret, and for now we know that they're going to remain unidentified. That's interesting when you try to map the contagion about what more shoes are we waiting to drop. We would like to know who's on that list, but it's going

to remain under wraps for now. Missing assets also a debate around the assets and who should be doing what about what talk to us about what's happening in parallel in the Bahamas, Katie, Well, that's the thing, who actually, what court has jurisdiction here is going to handle it. That's been a sort of turf turf war that has erupted here. We know that for now, these dueling liquidation proceedings in the Bahamas, they're going to be transferred to Delaware. You're still going to have f t X as US

restructuring advisors and regulators in the Bahamas. They're going to try to work out rules for sharing the information. But for right now, again it looks like that's being transferred to Delaware. Alright, bloom bows, Katie Greifeld, thank you very much. Let's continue the conversation with regular Allagata, CEO of the crypto trading platform Falconnects and Raggy. You have a history with ft X, which we'll get to, but I first want to ask you what are you seeing among your

user base customer base in crypto markets? What does that reflect based on what's happening with ft X in the fallout from it? Absolutely? First off, good to be back. What we're seeing in the broader customer sentiment is definitely the first few weeks were shocked, right because everyone knew that al Meda was a counter party on ft X, but the lack of separation between these counterparties was a huge shock. Now essentially all the customers chatter is all

about which shoe is going to drop next. So people are paying a lot of attention to exchanges specifically, so specifically to Asian exchanges. People are doing extended due diligence and making sure that things are okay there. But everyone is like very cautious at the moment. So your relationship with f t X, you did transact to ft X, Explain your historical relationship with FTX and where it stands now.

So we did have Alameter as one of our trading parties as we started the business, but a few weeks to a month before this entire contagion we stopped. We are on the relationships or zero exposure to Alameter. So it's one of the largest brokerages on the planet. We do work with one of the largest liquidity providers out there, which is ft X. We have a small relative to our balance sheet position on ft X, but we're in

a very good place right now. When with drawls were stopped, did you have assets on the platform rather, could you repeat that again. When with rolls from ft X was stopped, where you left with any assets for other counterparties on that platform. So if I understand your question correctly, I mean about the assets on the platform. So essentially what we're going to see is like this is going to be an extremely complex legal situation, some multiple jurisdictions, multiple assets,

multiple regulators involved. So we're all prepared for a very long run out legal process. So that is that's what us and a lot of our customers are getting up to. The second aspect of it is a lot of information is missing. Today's hearing was a very good starting point, but at the same time we didn't get a lot of material information just yet. So what we're seeing in the debt markets is are essentially people trading the claims is three to five cents on the dollar is where

things are being priced in at the moment. Okay, but any of any assets that you were helping manage and move around, were they trapped in any way? Did you for your immediate reaction function at your business when withdrawals were halted at ft X. So first thing that we were looking at is essentially the news flow and all the information was quite confusing at the start for everyone, right, because it was a shock to the industry. The notion that there is a massive liquidity crisis at ft X

is definitely a surprise to us as well. But at the same time, we were well operating within our risk tolerance, and that is the advantage of coming to a broker versus going directly to an exchange. So we have a specified amount of funds that we did not cross at f A, fd X or any other exchange that's out there. That was the reason why we walked out of this

with a small position relative to our balance sheet. Can you give us any size or scope on how your business has been hit by a lack of faith now in the industry broadly, a lack of trust now any industry broadly. Yeah. SEQ two Q three were record volumes with the record number of customers on boarded for the for the company. But if you look at the last two or three weeks, trust is fundamentally broken and we

see that. But one of the very interesting data point is even within the last two or three weeks, we are not seeing a whole lot of customers actually pause and go away. You know from the conversations that was surprising. That's actually a good news for the sector. The simitely there is a lot of doubt. We need to rebuild trust. But at the same time, you're not seeing institutions walk away completely from the space just yet. What about some

of the funders of you? Of course Series D you announced on social media for example, a hundred and fifty million came to you from backers such as Wellington Management, Tiger Global. Are those VC backers and crossover funds asking you RAGU for more details on your business? Are they are asking for perhaps some over because I think reviews lost his his ability to he but Carolines are asking about your backers, some of your investors, what about them

losing faith? Have your investors been phoning you and saying what is going on? What is our exposure to FDx? Yeah, so a lot of investor conversations, especially if you look at the roster of investors that were associated with fd X, these are some of the biggest names on the planet. As a result, there is definitely a lot of confusion and chaos in the early days within our investors as well. So we did spend a lot of time thinking this through with our investors. In terms of our wist limits,

we walk them through the balance sheet, our approach. The good news here is falconect as a company we never take directional bets and that was extremely powerful because the biggest learning out of the two thousand eight crisis and what eventually led to the Walker rule, is if market infrastructure companies start taking directional bets, the cascade amplification is going to be huge. And for that reason, when we started the company, we always were on the principle of

never take directional bets. That is ultimately where the customers are. Investors got comfortable. But all right, Raggy y'all y'alla Gata, a CEO and co founder of falcon X, thank you coming out. How economic uncertainty is affecting Zoom. This is other tech companies are trimming costs. Will talk all about that and more with Zooms CFO Kelly Seckelberg. Next this is Bloom. Let's talk about the shares of video conferencing player Zoom, and they dropped Tuesday after the company recorded

its slower sales growth on record. Now a number of analysts were reacting to all of it, and you've got the breakdown. Yeah, it's interesting. I mean some analyst did cut price targets. At one point on Tuesday, the stocks down more than ten percent. We closed down almost four percent. But what was really interesting for me was Morgan Stanley maintaining equal weight on the stock price target eighty five

dollars a share. But they're saying that even though growth was better than expected in other ways, it did not slow down as much as feared. They can't get rid of this narrative around this stock, this bearish narrative about Zoom. You and I have been discussing Zoom for what feels like a very long time, but in reality goes back to just the beginning of the pandemic, when this name

became a household name. Right. Still really big under performance year today, Zoom is one of the great laggards, right, especially when we consider some of the names that you and I have tracked so closely down almost six year today. A big question I've got, how do they return of

growth now in this genuine post pandemic period. Carrot Let's ask woman who knows that the same CFO Kelly Syckleberg WU pieces to say, is with us and talk to us, Kelly just about the economic headwinds macro as they are. How do you as a company navigate that, How do you return to growth with your smaller customers in particular. Yeah, So we have two segments of our business, as you well know. We have the enterprise which is supported by our direct organization, and we have the online portion of

our business. And the enterprise segment is growing well. We had twenty year over year growth in Q three And this is where you know, we're seeing this transition from being a really really killer meeting app that everyone knows and loves, as you say, we became known for during the pandemic to becoming a platform that really provides all of your collaboration and communication needs with Zoom Phone, Zoom Contact Center, Zoom One, which is a bundle that brings

them all together. The area that we are seeing headwinds is in our online segment of our business. And this is by its nature more international, so much more impacted by the strengthening dollar and you know the impact of FX and it's having as well as the impact that we're seeing in Europe from the war. And then this is the area that we're seeing a little bit of macro as well. Some of these customers themselves being impacted by seeing contractions and thus returning to you know, cost

cutting potential considerations. We have seen churn in this segment of our business returned to pre pandemic levels. It's down to three point one per cent. But we're seeing some challenges, as I said, headwinds in the new AD and that's what we're really focused on and what we need to stabilize in order for not to have that dampening effect on our long term growth. Your long term growth could

M n A drive APOD. I think you've told about M and in the past, so I guess my question to you is how do you use M and A as a tool for growth? What kinds of companies will help you grow in those areas that are doing better. So what we've seen be successful for us in the past is acquiring companies that have technology that accelerate our building of those technologies. So for example, last year we acquired Solving, which brought conversational AI, which is a much

needed capability into our Zoom contact Center product. We continue to look for opportunities like that which accelerate our development. We also look for opportunities that could be a compliment

to us. So you know, we recently announced at zoom Topia that we have an email and calendar integration also email and calendar services for SMB customers, and that's a perfect example of how we're continuing to extend into productivity tools and also a perfect opportunity to continue that expansion through possible M and A. Let's talk a little bit when there's M and A is also let's talk about a focus on costs And actually Alice were impressed by

that cost control, but how much you having to depend and look at the future costs of your labor In particular, job cuts were hearing from HP just in the last hour or so. So zoom by our nature, we have always been a very frugal company. We had a very interesting situation that during the pandemic, our growth really outpaced our ability to hire an invest and we've been very focused on the last couple of years of getting caught up.

There were areas that we needed to invest in, especially R and D. We're very close now to reaching our long term targets, which means we will think very thoughtfully about hiring and investing going forwards in areas that are focused on driving innovation, driving growth. But of course we want to be ensured that our expenses are not outpacing revenue and need to do that in a very measured way. And that is exactly the message um that our leadership

team has focused on. That we are employeeser for pused on it, especially as we're planning for flight twenty four. Kelly, I mentioned the stock move tuesday, you know, one point down ten percent. All told paid some of those declines, but this was the slowest quarter revenue growth you guys have recorded. How much pressure do you as a management team feel right now? We always talk about this internally.

What we can control is our own execution, and we are aligning our employees around continuing to focus on delivering on our customers needs, on building out go to market infrastructure where we need it. For example, one of our focuses and initiatives is building out our partner ecosystem on an international basis, and keeping everybody focused on that rather than the stock price is really the message and that's what we can control on, So that's what we focus

on it. Zoom, what about control of the competition and of course innovation is to find off some of that. Are you hearing from clients that they just have to caught the nefle they're going with teams or are you hearing that they cannot you know, make the purchase that

they're estimated in this time. You know, we've been really pleased with our renewal rates, especially in the enterprise, as I think we are all convinced now that the flexible work is here to stay, and so organizations realize in order to keep their employees productive and happy, they need to provide them the proper technologies, which includes Zoom meeting Zoom phones, also ensuring that the proper technology is in

the rooms. However, you know, they are being very thoughtful about those purchases, and so we have a very competitive and compelling total cost of ownership. Zoom one is a bundle that brings all of our most needed products together

at a very compelling price point. And so what we do see is more scrutiny around deals, but understanding and showing how we can create value for customers makes Zoom a great alternative even in these environments where my prcf are being thoughtful, very very thoughtful about you know, commitments and investments for the future. Alright, Zoom CFO Kelly Steckelberg, thank you. For joining us here on Bloomberg Technology. EV maker Fiska has finally started building its vehicles two years

after going public. The Ocean SUV just started rolling off assembly lines in Austria. It's targeting forty units in year one and already has over sixty three thousand reservations. I caught up with Henrik Fiske, chairman, CEO and founder of Fiske earlier today after he rang the bell at the ny SC. I think we actually, in my opinion, are maybe just a high point of the recession. I don't think they're going into a recession. I think we're in

the middle of it and getting out of it. And I can really feel that when we talked to our suppliers to getting people back into their facilities. We have had a rough time getting all our suppliers lined up, but we managed it. I think together with Magna. Magna of course as a powerhouse in the automotive industry, so

you know, we're taking a kind of cautious approach. We are only making three vehicles in Q one next year, then jumping really fast up to eight thousand, and the reason for the three D because we want to make sure all our suppliers come with us, but we actually are seeing that our supply chain are very good. It's been tough, but they're there and there with us Henrike

small volume of vehicles. Then in Q one, these vehicles coming here to the United States, and how does the infrastructure look to service the early customers, how do they take delivery? What happens if the car has a servicing issue. So we have first of all our own technicians with mobile technicians which we can send all over the US.

We also have a deal with Bridge Down which have you know, more than two thousand facilities all over the US, so we actually have more service facilities and even some of the largest automakers, so we are very well set up. We already have a couple of service centers, a special power train center in California. If there's any major issues, we can bring the vehicle there. But so far, the quality I've seen of these vehicles coming off the line and Magna is amazing. I've never seen anything like it.

I've been over thirty years in this industry and I feel really good about our product and the quality that was Fisker's chairman, CEO and founder Henry Fiske I'm gonna tell you, Caroline, I've been writing about that company for more than two years. In Monthly Henry Fiske would say November, that's when production will start. In to his credit, it did, and then the backlog of orders, the production that comes, is it actually going to start to be a true competitoriad, Yeah,

it's impossible to say. Their model rights to outsource manufacturing to Magna, a contract manufacturer. And that's why are so confident about how many they can build, about why they will be able to make it so affordable. And you know, you look on the screen there at those pictures, it's more in line with what Americans like bigger cars, right, But whether it will be successful, it will hit those targets. Who knows the world of evs is tricky. Remind me

the price point. It's about forty U S dollars, which if you've got on Tesla's website right now, for example, or a riviewan that's nearer to eight tho. That's an astonishing price point to commit to. And that's what we kept asking him. Or what about supply chains, what about input costs? What about semi conductors? He seems unfazed you always bring out the best of these people as particularly with the long term relationships you have, so he seems

like quite a character. I'm not sure what the whole glove thing was though. Where he rang the bell? Did he tell you completely lost on me? It must be something to do with electrified magician vibes. Magician vibes, Welcome back to Blo meg Technology. M Karine hide in New York and ed in San Francisco. We're talking Apple weight times to get your hands on the brand new, top tier iPhone fourteen Pro, and then they're looking a little worrying for analysts ahead of the key hot holiday season.

Right right, look at the data. If I got on Apple's website right now, try and buy myself an iPhone fourteen pro or where you are in New York, it will tell me the delivery date is December thirty. And there's a growing chorus of analysts that are worried that either consumers are like, well it's not available right now, are wait and that could impact sales for the holiday quarter,

which could impact the stock. This is a stock that's performed just a little better than the SMP five hundred, but still down year to day that's really the supply side of the story. But the demand side is really interesting as well. Ubs Evidence Lab has done it's annual global Smartphone consumer survey and it's interesting. Seven thousand respondents and survey people surveyed across key markets US, UK, Germany, China, Japan.

In the U S and China, the number of respondents that's said they will buy an iPhone at some point in the next twelve months is down around a percentage point from the same period last year. But in other markets like the UK, like Japan and in Germany, actually the number of respondents saying yes affirmatively I will buy an iPhone at some point in the next twelve months is up. It's really interesting as well to look at some of the consumer behavior, especially the installed base age.

In other words, that's a smart way of saying how long consumers holding onto their smartphones. It really crept up in the most recent survey to around twenty months. Imagine holding onto your smartphone for twenty months. But the reasons why are even more informative. Caroline. Why do people upgrade their iPhones because the battery is broken or the battery life is drained, because it's slow or simply because it's damaged.

They don't seem motivated by upgrading to the latest handset because of the tech, really interesting products watch this holiday season. I don't have to imagine twenty months, said I live twenty months. I pushed past twenty months. But in fact, maybe I'm not going to buy any electronics this holiday season. In fact, we came to you our followers on Twitter, our audience are engaged audience about what on holiday are you wanting? What's your shopping list? What's your Sanders list

looking like? And actually most people still want experiences. We're in this post COVID life where we want to go out and enjoy ourselves. Thirty five point five percent of you saying that healthy quarter think it's electronics is where they want their money to be being put to work, apparel, furnishing.

Are we stocked up too much in COVID? And clearly a few just want cold, hard cash or at least a gift version of that and be used to say though, ahead of holiday shopping, we want to get a sense of how people are spending and whether they're being more

thrifty or more thoughtful. My name Ourn's with us Head of sustainability at eBay and re name what you can give us is a really interesting take, particularly of where gen z are putting their money to work, because I certainly have started to rent more of my items, perhaps look for second hand And is that more focused on money and a recession worry or is that more focused on sustainability in the here and that you know, it's

really oath. I think that re commerce is selling and buying of used and pre loved goods is really a dual issue. So people have an opportunity to get online, sell things are laying around their house and make a profit potentially an extra couple of dollars in their pocket as we head into the holiday season. But at the

same time they're holding the environment. Not only does this item get a second life and not go to landfill, but you're also helping to avoid additional carbon emissions being put in the air, which is really critical when we're in a time of a climate crisis. But I what all people setting right now. They're selling just about everything you mentioned that people wanted and then before um electronics of parel, handbags, sporting goods, whatever, whatever you can imagine,

we have it all on eBay. And people are really buying um all those items because they are also contributing to the circular economy. It's it's a dual win. It's a win for your pocket and so win for the planet. Renee eBay story technology name to some people a blast from the past, to be fair, but a lot of the data that I've read throughout Tuesday suggests actually there is a younger audience going to eBay in search of goods selling goods. My question is why, you know? Are

they driven by cost consciousness? Are they driven not so much about cost consciousness or value for money? I want the bang for my buck. Talk us through the spending patterns you're seeing with with the gen Z and millennials, they're not having the same stigma attached to buying used, buying a pre leve item that maybe my generation did. UM. They're seeing that there's there's money to be saved while

you're participating online in the circular economy. But they're also having that added benefit of knowing that they're not contributing extra ways to the landfill, They're not contributing um extra missions to the atmosphere, and so that circularity of seeing us goods being sold and being bought online is really increasing. Um. Over fifty of our survey participants said that they're selling more used goods online and they have in previous years. So we're seeing a real trend here. What are some

of the weird and wonderful things people are buying? Like really weird, really wonderful, really weird and wonderful. There is an old story floating around about somebody trying to I think sell their soul that that didn't really fly, so that got squashed pretty quickly. Um. But the wonderful things are these unique finds. There's a teacup that your grandmother may have had in a set and it was broken, and then that one item is online. You were able to match it and bring it back and put it

with the set that your grandmother had. So there's really a lot of opportunity I think on eBay, not just

for the sellers, but for buyers as well. UM. And I'd also like to mention a related issue that we're working on right now has to actually do with Congress in ten ninety nine K forms, so there's a limit right now on selling on eBay and other market place says of six hundred dollars and if you sell six hundred dollars or more worth of items that could be laying around your home, you're going to get this tax form come January unless Congress acts now to change this

threshold and raise it back up somewhere near where it used to be. Potentially a year ago was twenty dollars. So you can see how this distance and advises the potential for re commerce, the potential for selling goods online that you can make a couple extra dollars as we

head into the holiday season. You know, I think, um, we really do need Congress to take this seriously and take a look out of That's interesting because particularly when you have lent into luxury items, you've been focusing on authenticity, you've been really leaning into well it's now kind of pulled back the whole n f T graze, But the focus on sneakers, on collections of just what people wanted to buy of collectibles, is that going to be hit and what's the price point like as we go into

this slightly slower economy. I don't think I had the data to speak specifically to about christ Coin being the sustainability professional that I am, but I can tell you though that those luxury items that are being resold are just as valuable in terms of avoiding emissions and avoiding waste as they're lower end items. The sweater there in my closet. The average American household from our last service four thousand dollars worth of things in their household that

they can sell. And now we're heading into the holidays. That could be the difference between putting a present under the Christmas tree, or exchanging gifts during quanza, or even putting the turkey on the table. And so we don't want to see this Tenani nine cave form, which is could be really confusing and distance and advising to casual sellers impact. What what we want to see is participation in the circular economy. Okay, eBay Head of sustainability Reneme

More and thank you. It's pivoting to digital assets are convests. CEO Cafe Wood is defending blockchain technology after buying shares of coin based this week. His just some of her conversation with Carol Massa and Tim stand of It on bloom Bug Radio. The infrastructure, the technology has not skipped a beat throughout this entire crisis. In fact, the hash rate Bitcoin's hash rate is at an all time high, and that is a real indication of the security of

the network. On ethereum, we're seeing the total value uh staked at twenty four billion, that is an all time high, So we think the infrastructure is working beautifully UM. As far as coin base, UH, this is an onshore regulated

UH company and wanting to help shape regulations. Brian Armstrong the CEO, and Alicia uh CFO have been leaning in into what's going on right now and saying, Okay, regulators, we need more clarity in order to protect to protect investors, those who wanted to get involved with a certain types of crypto were forced off shore and look at what's happened. So UM, I think that coin base is going to

come out here looking very very strong. It just lost a very big competitor in f t X. Well what is the market missing though, because you know that could be one narrative, Cathy, But at the same time, we haven't exactly seen shares of coin based rally since f t x is collapse. Do you think to you that represents potentially broader concern about just people's interest in crypto Following ft x is collapse. No, I think it's more fear. I think many people say, we don't know what we

don't know? Uh and uh So what we do is we step back, you know, put a little perspective into the situation here, and what do we have. So the entire crypto asset ecosystem is an eight hundred billion dollar ecosystem. Apple is three times larger in terms of market cap. So that's some perspective. Many people are saying, well, okay, is this another Lehman? Could this be uh you know, could could we see the domino effect here? I've just

given you one reason why. The banking system back in oh eight oh nine trillions and trillions of dollars and it was the global banking system. Right now we have it seems from f t X five to ten billion dollars in creditors. If as uh as f t X has filed bankruptcy, they will be making claims. If you look at Lehman, that was one point to trillion dollars in claims. So again, just trying to put perspective, this is fraud. That was all confess Ceo caffe Wood coming

up more on Crypto the Lads. President John wu discusses the crypto contagion and its impact on trust in the blockchain ecosystem. This is Bloomberg Crypto News abound. Let's get you up to speed what they've been following just this week alone, because ftx is attorney told a bankruptcy judge that a substantial amount of assets have been stolen or indeed a missing in what's been considered quote, one of the most abrupt and difficult corporate collapses in the history

of corporate America. That's according to the new ceo class.

Bloomberg has learned that the Binance ceo, of course cz met with Middle East investors to raise money for his crypto recovery funds have been talking about, and of course we reported yesterday Genesis warning potential investors it may have to file for bankruptcy unless it can raise new money, while acknowledging there's a two point eight billion dollar in outstanding loans on its banners sheet, including two related parties such as well as parent company d c G for

more on the state of the industry. The person who's behind a lot of this breaking news is Shenani Bass actually with US and other Labs President John who pleased to say is with us as well, and first and foremost, John, let's let's talk about how exhausted you are. What is it like the sentiment you're in the underlying technology, You're about getting new rails for financial for traditional finance to run on in a more crypto cryptom, more underlying efficient

technological manner. Are people being put off coming to at the moment a little bit um? I would, I have to say, definitely lack of trust. Now in the space, there were a lot of people who are already distrustful in the space to begin with, and with all of these things that the drama that's happened in the last few months, they feel like they are gonna equate that with the entire space. I'm in the middle. I see a lot of activity. I speak to all different types

of partners, builders, exchanges, market makers. I can tell you it's actually really just a small percentage of these people. But these small percentage of people have a lot of control because they're in large, centralized entities, and these are the really the bad actors. Most people are good. Speaking of large and centralized that news about f t X not disclosing the names of the fifty creditors, the top fifty.

This is supposed to be an industry about trust. Is there a problem here to not know who those top fifty creditors are? As a crypto native, I generally believe in full transparency and disclosing everything. But in the situation we're in right now, I almost feel like not disclosing the name is actually good because it could create bank runs at some of these places. UM, that's there are still operating wealth. Talk to us therefore, about what you

worry in terms of contagion. You've talked about the lack of trust. You talked about the worry of a lack of transparency. Everyone is now looking at the exchange they use, or or the tokens that some of the exchanges have of course issued themselves. It's contagion and the most shoes to drop. Do you think so? I think you guys

are in a great job of covering Genesis. Um in my seat, I actually think Genesis is a bigger issue in terms of the capital markets of crypto than even f t X. Genesis was the largest lender out there. They've done unsecure as well as colorized lending. There's really no one else doing that lending. They without them in the markets, all the people in the value chain, all the companies like market makers who need to borrow in

order to do market making. You're gonna see liquid, you get sapped out of the markets, spreads widen, no investors want to come in, and you have a vicious cycle. So the genesis is a very important part of the

crypto capital markets. And therefore how much does it set it back if we do see a bankruptcy filing, for example, by such a juggnal such as Genesis many many years um, We're gonna need some white knight to come in, maybe a traditional UH finance player who's dabble in this space and is willing to come in and take some risk.

If you look at a lot of things out there in terms of instruments that trade, there's clearly a different sentiment from the ratified community towards crypto versus the crypto native community. And you can look at at the prices

in terms of the futures curve. The CME futures curve is so you know, the out months are really negative for bitcoin and etherium, whereas the perpetuals in the crypto native markets, which are also undated futures are flatter, so it's not backwardation like the What do you think about trades like that? You look at that CME futures contract arbitrage, you look at what's happening with the great scale big contrast. These are financial assets like any other financial asset right now.

Is it a good money making opportunity or is it too risky to trade? It's an incredible arbitrage opportunity that you can make, you know, on an annualized basis. But the issue really is you can't find a counterpart to help you put that trade because nothing is flowing in the markets right now. The largest lender out there has a trickle ripple effect to everyone else is not lending. So if they're not lending, counterparties are not taking risk either.

What does the crypto market look like without that kind of leverage anymore? We go back to the previous cycle. We're talking about two thousand fifteen to two thousand eighteen UM. Leverage needs to be controlled. Leverage is not bad in every economy and every marketplace. You need lending and barring to some extent, otherwise you don't have money growth, and we need some of that back into this market to

get the markets going again. I'm interested in this talk of a traditional finance giant, maybe a kind of crossover investor who's doubled already, who could do that and have the will of the regulators, the will of well Washington on their side. Well, first of all, I think all the existing players and this is all done, I think the companies in this current crypto capital markets will be gone are still around. Um, they're gonna have to take

a leadership role. They're gonna work. They need to work with regulators and come up with good regulation, even if it's bad. Regulation is better than no regulation. And then you'll have perhaps banks come in to pick up the pieces and by parts of the market structure because they'll be more comfortable and they'll inject a lot of liquidity.

Or you have traditional market makers, whether it's Citadel coming in they've dabbled in the citical securities, or a Jain Street or well known high frequency funds who are very adept in this market market making side. But what about the traditional players here we reported this morning for example, Apollo is looking to list a digital assets strategy on a blockchain. You're doing something similar with a bunch of

counterparties including KKR. So are they concerned given the broader rhetoric around crypto because those tokens, your your blockchain has a token as well. Everyone is a little concerned. I cannot say no, one's concerned. But with that said, even if the capital markets and crypto are broken, the technology

is still continuing. So Apollo's announcement of raising a fund using a tokenized version of that of a labs of a launch tokenizing part of a KKR fund really shows that the technology and the innovation is going to continue and the benefits will accrue to the people who are in the space. And it's interesting. One of the conversations I had with Mike Cagney, who's the CEO figure about this particular announcement, was that stable coins could be an

onboarding ramp for these private equity funds. Can that happen? Is there enough security in the stable coin system as it exists today for it to be a feeder essentially into the traditional financial system in a bigger way? Well, yes, in terms of the security, and that's the ultimate benefit. When you have multi parties that need to exchange information and payment simultaneously, that's the real benefits of a blotching technology.

So do you need that token in that sense, whether it's a stable coin or a different token, that's the real benefits. So you can provide to our cutting costs and creating more efficiency in existing financial systems. And let's not forget it was just last week that the New York Fed was talking about digital dollar and pilots there. So there's still innovation to be had. And ave Labs president John when we thank him for coming on and just talking about the space and where we get some

sleep Gloomberg Shinnali Bassett as well. All over this story going viral. Saudi Arabia scoring one of the biggest World Cup upsets ever by beating Luna Messi's Argentina to one on Tuesday. Messi gave Argentina an early lead with the penalty kick, but Saara Arabia scored two goals within five minutes of each other in the second half of their clinch victory. Now the Argentina loss has spillover effects into

crypto as well. You wouldn't believe it, but the Argentina fan token offered three partnerships with Socios crashed a quarter cent. According to reports that Argentina is among international teams and some domestic clubs that offer fan tokens. For example, Portugal's token is down ahead of the match against Ghana on Thursday, and ed I can't get over the amount of things that are going viral around soccer at the moment, or

football as we would call it. Because Renaldo Ronaldo from Man United with five hundred million Instagram followers, he's walking and I understand Man United is what considering its options for sale. Ronaldo is out of United, it is official. And then the owners, the Glazers minority equity owners come out and say, yeah, we're looking at options for the club.

And it's all across Instagram, Twitter, you name it. We should be talking about the World Cup on the pitch, that's what's happening off it that continues to dominate the headlines and what people are talking about on social just extraordinary. My entire Twitter, Instagram, whatever wall that you're looking at, TikTok is a flood of World Cup news. This man owning Instagram of course because amount of followers. That does it.

For this edition D of Gloomberg Technology Wednesday, We've got auto desk Okay, yeah, and check out our podcasts and all the platforms you usually go to. This is Bloomberg,