Tech Selloff Continues and Bitcoin Goes Below $31K

spared in this sell off. Bitcoin slipping down below thirty two, down more than from its all time high. My conversation with Galaxy Digitals Michael Novegratz about where he thinks the bottom might be, and look out below how the slide inequities is affecting the once hot I p O market. Will talk to one textio who says, with the traditional IPO press, it's actually a scam kicking things off. Victoria Green, she's a chief investment officer. I'm fanning partner over at

g squad. Victoria perfect to have your voice, because what do you make of whether we're going to see capitulation in the market sometime soon, whether the correlations are all sort of working against the tech investor right now. I don't think it's going to capitulate yet. You know the number one invested adage right now, if don't fight the FED, and I think the FED is going up, they're gonna hike, They're gonna tighten. And that's a little bit tough on

on tech and growth right now. And honestly, and not all stocks are created equal. Right now, I'm kind of staying out with the new and in with the old. Are of the new stuff, the pandemic darlings that are now pandemic duds are not really performing the same as some of the old tech. You look at your IBM, your Cisco, your broad cooms and and and more of

the value text. So right now, we really do think you want to be owning companies that are giving you the earnings now, that have a sustainable path forward on how they're going to grow their earning, not just on a wing in a prayer and what they hope will happen. And so I think you see a lot of these stocks getting punished. I mean, Amazon down thirty three percent since the end of March, and that company obviously prints billions upon billions of cash. But I think investors are

looking where are we going to find growths? How are you going to grow your earnings? Why is Microsoft off one of the four percent? People questioning the growth of that sort of a business as well? Or is this the sort of at the moment everything the baby goes out with a baffof it's a following tide following all boats. You know, that's a horrible way of putting it. But at baby and bathwater. Absolutely there's nowhere to hide right now. If you're looking for green on the screen, it is

very minimal, especially in the tech sector. I don't think there's anything wrong with earning Microsoft. They had great earning uh and obviously they've got a good potential, but I think they're getting dragged down with everyone else. You're seeing this correlation with with bitcoin, with tech stocks, with the arc funds, and we actually con termed about the Holy trinity, and you're seeing that correlation live up to it. It's it's billing right now because you really can't see one

move without the other one. And you're not seeing bitcoin be aheads at all. You're seeing it not in head inflation, and you're seeing it more and more developed into a tradeable stock type investment that has no earning, so you know what it is. I think we're finding out a

little bit more what it is. When you're chief investment officer, are you looking at well, either is this a by the dip moment and you know when everyone else is fearful be greedy, or is there something that you need to see some sort of bottom, some sort of clearing of the deck by the Federal Reserve, some sort of sign of of peak inflation before you start thinking, Okay, now is a safe moment to be allocating cash. Uh, we're not quite buyed yet of the tech sector. I

think it's a little early. I don't think we think of situation yet. The sad's not going to rescue us here. I think there are some people holding out, some hope that maybe they won't be as hawkish because look at how bad the markets then. But we're holding tight. We've been looking more at value. I think with tech, you know there are some selective names. You look at some of the semis that have sold off or cybersecurity that there are very good companies you're seeing it just it

doesn't matter who you are, you're going down. I think it's early to come in, and if you look at the technicals, we're kind of in the middle ground right now, and and I think that means there's more to ball. There's nothing to rescue us really soon. What is the sign of capitulation for you, Victoria, I mean, I think we need a Billy show nine percent down there. I think we need to sign some support and some putting

on the technical side. And I think, obviously, you know, have we reached Pete Pocket said, I don't think so. I think they're going to run off their balance sheet. So I think maybe this summer we can see it move around. You know, I don't see us avoiding a second. So I'm not moving very fast right now because I see a little bit more pain in the cards, especially

for the sector. Meanwhile, forty five pm New York time, it was announced by Grinder that it is going to go public through a Tiger's back at two point one billions on evaluation. I mean, I've seen headline after headline, Bank of America, Goldman City, all these banks backing away from being exposed to special purpose acquisition companies. They're worried about the regulation effect right about being in some way affected by it, do this companies still coming to the market.

Do you see still spacks but purchasing companies. I think stacks work when they have a target in mind and they can acquire it. You know, it's just kind of a backdoor I p O. I think what they're trying to limit is a spack raising capital on hopes and dreams and not really having a set target. And you saw a lot of SPACs fail and the banks got rich, the sponsors got rich, and the underlying clients tended to

not do well. So obviously the SEC stepping in uh really made people back off the similar to other I p O s, I think the fact is not going to be dead, but I think it's going to go back to doing what it was supposed to do, which was kind of bring a company to market with a little bit of a backdoor. But then it became open season and everybody was just raising all this money to eventually go buy something, and there aren't enough targets, and you saw multiple SPACs fail, and you know you have

to wonder. Obviously, with Bumble and everything else, this is a crowded space. But the Grinder has put a pretty decent niche in their market, and it is a is a viable product. Um. I think they're really targeting the facts that that didn't really have a target, and investors really got hurt by putting the money with This person knows what they're doing. They're going to be able to find this company for me and then eventually not finding

what they wanted. There's a global element to this, of course, Yes, we're very fearful of the FED of inflation of very close to home things, but of course this is also the perfect year political storm. This is an inflationary pressure that is worldwide. This is also a story of slowdown, particularly in China. How much you're looking at those global effects from that at the moment, Victoria, are you very

much focused on what's affecting the US economy? Well, I mean the supply chain issue in China is going to affect us greatly. You know, we we barely got out of COVID and we kind of ductap together this recovery. We weren't really on that pilt of a footing, even though the market had this tremendous rally off that mark, and then we look around and you see what's happening in Shanghai. The zero COVID policies in China and the

supply chain back up. We're still very vulnerable to that supply chain back up, you know, moving a factory and actually shoring up your supply chain from maybe we have some other options and people are sitting on some more inventory. It's not easy to build. You can't build a factory and get it going in a year. So our supply chains better. No, you have pressure coming from the war in Ukraine. You're cutting rushed out of the market. You

have China shutting down, Shanghai shutting down. You see all of those chips backed up at the Shanghai port, very revenuscent of what was happening outside of the port of l A and you're already putting pressure on on what wasn't really a great supply chain to begin with. So the world is getting smaller. And when the world gets smaller, you know we cut out Russia. China's shutting down a little bit. How are you going to find your growth right now? If you have less trading partners and you're

paying more. So I think there's a lot of pain still to be had. I'm not uber bear. I think we can find footing. I don't think this is an o A, but I think you need to be very aware of what you own right now and how how at risk you are to your earnings holding up. Are they sustainable? You know? And then you look at a Netflix and realize that, hey, some of these these high fire megacaps. You know, it takes one or two bad earnings for Booker a Netflix and suddenly they lose value.

Victoria Green can talk all afternoon to you. Thank you so much, Chief investment officer for g squared. Fascinating discussion, of course, coming from what is a boutique independent advisory fun Meanwhile, coming up more on the text sell off what that means for the I p O landscape. We're just talking about it with Victoria. We'll discuss all this and more with mobile analytics company Amplitude as net. This

is a bloomberg. We're seeing the end of a long era of free money that our economy, in the global economy has been in, you know, going back all the way to September eleven. Well, it's a bit of a blood bath out there. So companies that were already in the ip O window hoping to go public this year, that window is shut late stage growth companies are pulling back. Early stage companies are not getting rounds done. I mean, there's a real venture chill afoot. Unfortunately, it's certainly a

tough market out there, as you acknowledge. But you know, at the same time at DoorDash, we're focused on the fundermentals, and the fundomentals for doordesh are incredibly strong. You know, we're not happy about obviously what's been happening with tech stocks or our stock, but at the same time, you know, new world that we're entering, and I just think about the fundamental value proposition that Toyot provides, you know, to

our customers. You know, we just keep our eye on the ball, which is serving our customers, and I think that's what a lot of companies are are probably just doing there in this time. A few tech executives there that we've been having across the Blue Bow Technology Show in the last week or so, reacting to the tech sell off. We want to talk to another CEO, Amplitudes.

Spencer Skates is with us company joined the public market and or a direct listing less than a year ago back in September, and you go to the Heady Heights of about a ten billion dollar market cap and and I'm afraid it's a lot less than that now, Spencer, And of course, I'm sure you're gonna say, look, I on the prize, keep focused on the business, But what do you do when your investors must be a little shell shopped? Yeah, and again, I think we delivered a

phenomenal Q one result on our last earnings call. We're really excited about being out in the public markets. One of the number one things I had to emphasize with the team is that short term market volatility is just not in your control. You can still deliver everything you commit to as a company. You can grow the business. We had one of our most phenomenal growth years last year, being up sixty every year, and you can still get hit in the public markets because of things outside of

your control. And so we're seeing that happened very broadly across the sector. You know, even companies that meet or exceed earnings expectations get hit um and so it really tests what c e O s and what teams are in it for the long term versus short. Yeah, well said on that, and I'm interested is to how you make sure that your talent remains in the long term, because when you've had an exit moment, when you've of course people got a lot of money exposed to the

share price. Now, how do you ensure that people remain as focused on the long term as you are. Well, we actually brought the entire company through a whole exercise where we actually pretended we were a public before we went out into the markets, where we simulated a stock price for the company, and we hadn't go way up, and then we had to go way down, um, and

then we had to come back to the middle. And the key thing for everyone to understand and take away was that even if they delivered the results, even if they achieved their goals, even if they were successful as a company, that the stock price could have tremendous volatility. And so the only thing that we could control was whether we hit our goals, whether we ship products, whether we make customers happy, um. And to stay focused on that, and if you stay focused on that, that will result

in success in the long term. Some of the best tech companies got started during down terms and recessions. Sales Force started in the early two thousand's, uh, you know, face books started around then as well. Lots of great companies like Airbnb started during the financial crisis in two thousand and eight UM and so it's really now is that is one of the best times to build and

grow a large tech company. And so this is where you see a lot of noise being removed from the market, where companies who are not as good will have to go through layoffs, will have to kind of pull back their investments as money isn't available and as free as it is now as it was in the past. And it's really for those who have robust, durable businesses that will be able to weather the next few years. And so that's something that we've always done very well here

at Amplitude. And the robustness of your business is also put determined by the demand and by companies willing to spend on products such as ourselves. Do you feel like the sentiment is there, that the confidence is there for people to be buying Amplitude services. Oh yeah, we had, you know, That's why we were very proud of the Q one results that we had. We had a lot of great companies decided to either come on to Amplitude for the first time, companies like Barnes and Noble or

brain Security. We had a lot of companies expand on us in a big way. PayPal was a big uh as a big expansion growth this quarter. We had Square, we had Okay, Cupid, we had IBM, we had the weather channels. So tons and tons of companies out there really willing to make investments with Amplitude, and that goes back to the rising power of the product organization. So you know what we do here at Amplitude is we

help companies build data driven products UM. And so what Adobe is for marketing and salesforces, for sales team, Amplitude is for product teams and so all the same megatrends around people driving growth through products. So product like growth, people needing data DRIM products UM, digital optimization being the next wave after digital transformation, all of those data points are still very much ringing, ringing true today. Okay, And do you have what is it that continues to perhaps

be a limitation to you? Of course? Does it? Is it talent? I feel that everyone's talking about how facely everyone is fighting for at the moment, how having to pay up for the information rey pressures. That is that something you feel confident in a way you currently stand spensive. Yeah, you know, talent is always a challenge for every company and it's no different here at Amplitude. And that's honestly my number one concern before we went out into the

public markets. People ask me, hey, what do you think the biggest risk to Amplitude is UM and I kept going back to talent and our ability to make them successful. Here in Amplitude. We're really confident UM in the market opportunity here, you know, thirty seven billion dollars of total adjustable market for what we do. We're really confident and

that we have a best in class product. We had a number of awards that continue to come out about cementing Amplitude as the number one product analytics platform in the space UM. And so it really comes down to our ability to execute on that and that's that's the talent Now. I think in the sessiony environment, you know, a lot of ways, talent becomes cheaper and more accessible because there's less opportunities out there. So it's a it's a really great opportunity for us and to go play offense.

We have this really strong balance sheet here at Amplitude, and you know, we are continuing to make investments in talent across the board, Spencer, Skates, Applitude CEO Mata. Of course, parent company of Facebook, is opening its first physical store and it's a brick and mortar bed on the metaverse Matter hopes giving consumers chance to try out the VR, the a R hardware, while the little boost interest in the future of digital interactions. Companies had a meta store.

That's Martin Gilliad spoke to take a listen. What we learned from this store will definitely go into how we build the product and where we actually continue to sell it. Why Burling Game and not San Francisco or New York City or London. Yeah, this great question. So Burling Game is the headquarters of Reality ants, and we felt that it was important to have the customer experience that we're

creating very closely. Where we're creating a product. We want that to be senator to how we continue to build innovation in the future, and so this felt like the perfect place to put our very first experience. I've been in a few different situations where you see a product in pop up format, right, you're in a mall, you're walking perhaps in some kind of outlets area. Could you guys look at pop ups maybe you know, doing temporary

pop ups in different cities around the world. Well, I think what we will learn from this experience is where we should be in the kind of experiences we should create. A lot of the experiences that we've built in Browning Game Store are unique. It's the first time some of these have actually existed anywhere. And I'm sure as you saw from our our quest to a demo UM, and as we learn more, we'll decide where and how those who show up around the world. Is this a luxury experience?

Do you want it to be a luxury experience? We actually wanted to be an approachable experience. We want people to feel comfortable asking questions. We've built it so that people can pick up the products and they can test it out, and we have these great associates so you can ask questions, UM, and it can be so much more um than what people read about. This one of those things where you have to experience. And that's what stores built around. Told me what it's like going into

the stool, What am I going to touch? Feel? Experience? While I'm that Yeah, so there's a couple of things. Um. Obviously, we have our products here around our reband stories where you can try glasses on that offer the ability to take pictures and video, which I personally appreciated having intended a wedding last week where I was able to actually be at the wedding while I was actually sharing it

with other people. We have portal which actually I'm speaking to you on today, UM, that allows you to have these conversations not just for work, but even with family. And I think about the pandemic when my my son had an opportunity to reach stories to his grandmother every night,

which was amazing. And then obviously, UM, probably the most exciting thing that people say when they walk into store is a mixed reality screen with Quest two that allows them to actually not just try the product, but allow everyone who's with them to see how they are experiencing the game as well. And that experience allows it to be and one that is shared with many, even though

it's experienced by a few. Martin, are you open to the idea that the store experiment might not work the actually the best way for Meta to grow its hardware reach virtual reality reach is online. Well, the store is not an experiment, it is it is a continued investment from us to make sure that we can get um feedback from our consumers, but also an opportunity for us to keep building and make sure the seas at the

center of what people are experiencing with our hardware. And you're the head of Meta Store, so I'll ask you again you want to open some more stores and where I think as we learn more about how people are experiencing this will will be able to communicate with that means later. Right now, we're focused on what we are creating and growing gaming the experiences that people will have here. Martin gilliad that of course hand a Meta Store talking

to our own ed Ludlow. Welcome back to Bluemberg Technology. I'm Caroline Hyde in New York. Let's get back to the markets, because well we've all been so focused on it for the day, for the last three days, and of course the shares a ribban I want to watch. The ev maker saw its biggest drop on record after a lock up on its shares expired on Sunday night. Ed Ludlow is here with the details. Remind us what what happened with the lock up expiry. This of course

didn't go too well for Rivian Right. So, Ribban had this huge ip O in November, and as is often the case when they have an I p O, some of the biggest investors and insiders and employees are restricted in what they can do with their shares. Initially, the lock up on Sunday night basically meant that seven hundred and twenty million shares of Ribban suddenly became available for

public trading. They could be sold, and we had news reports over the weekend that Ford, which is one of the biggest Ribbean investors, had sold a block of eight million shares at a discount from Friday's close, and it's it's just not good for sentiment. You know, when one of your biggest shareholder does trade when the lock up lifts, it kind of sends jitters throughout the market. And you look at how Rivian shares have performed since that post i p O peak, where they were at hundred and

seventy two dollars a share. We're now down below twenty five dollars a share, the stocks fall at seven percent, and all things considered, when we come to lock ops it it went as badly as it possibly could have gone badly as possibly could have gone. Meanwhile, of course there is one person or andy, one investor that's not selling, right. Yeah, So Abdulla Teacher Meil is a big Saudi family conglomerate.

They are the third biggest shareholder in Rivian, behind tro Price, a big name on Wall Street of course, and Amazon, which is another big investor in customer Ribban. And they told me we have no intention to sell down our stake to sell the shares, and they gave a very public backing of Rivian's management. But we didn't have the

same explicit backing from Amazon. For example, Amazon said they were committed to working with Rivian, but they didn't comment on a rule out selling the shares at a later date, And so there's a lot psychology around this. What's really interesting though is throughout the day Monday, there's lots of data suggest retail investors are now looking at ribbyan right, it's cheaper option. They were oversubscribed in the I p O, A lot of retail investors missed out, so there could

be some upward trajectory from here. But it was just a really rough day, biggest drop on record, rough day for Ribban, rough day for many ed We thank you so much. Let's talk about more of that roughness shall we call it, and the text sell off happening right here, right now? What does it mean in the public markets? What does that spin over affect to the private markets? Want to bring in Race Capital partner Edith Young for

more on this. Of course, early stage Silicon Valley venture capital funds so not unaware of what's happening in the public markets and the and the race to enter those public markets. What do you make of currently let's talk stocks first. How much are we seeing this ripple effect affecting valuations in the private markets and people's desire to

build right here right now? Yeah, I think, as Caroline as an investor that really focused on early stage infrastructure software, the market is brutal and it's certainly will impact a lot of evaluation in the private market. Um But having said that, I think the particular in the world of Web three and Web two infrastructure software just there's still so much more to be built, um Like for us particular at the early stage, I think valuation is not

particular impact us yet. But at the same time, I'm still really really bullish on some of the companies that we invested in, Still you know, Salana. Obviously a little bit more on the crypto side. Ft X is a little bit you still private I'm so bullish on while they're building, but early stage is still missing a lot of building block. So I'm excited about Bundler, which is sort of storage for Web three, notified, which is like

communication of Web three. There's still so much more to be built, but we need to just hang tight um and not get too scared with what's going on. Okay, let's talk about the crypto market, because you mentioned to companies very exposed basing themselves on one three in the future.

Thereof when you see the biggest cryptocurrency, Bitcoin getting hammered so much, when you see the spillover effects of a VC money that's been placed into these sorts of businesses and and now a pullback and perhaps that sort of risk tolerance. Does that mean that people are going to be worrying about the rest of the crypto space. How do how does the spillover effect happen? Well, I think crypto and the Web three space is not purely just

about bitcoin prices or talking prices. It's really about the technology sire things in my head. You know, in many in many cases, SLANA is basically building the AWS and the Web three infrastructure, and not that along that there's still back up recovery, communication storage. It's still not there yet. I think if we look at the crypto market, if you're purely just looking exchanges, obviously it's a little bit crazy.

But you know, three years ago or even five years ago, when I first got into it, bitcoin prices with three thousand dollars. Today is still ten x um. And you know three three or four years ago, come by market ab about four billion, but today is so over I think one point three one point five trillion. So in that sense, overall market is not going away, but we definitely will see some ripple effect of what's going on.

But I'm so super bullish because there's so much more things and the fundamental for the technology, which is not about crazy trading, it's about founders often and I think, of course when you mentioned Solano, when you mentioned f t X thing as Sam Bankman Free SPF have been on a podcast of Bloomberg's recently Odd Lots by my Alcohegue, Joe's Wisenthal and a healthy dose of cynicism coming from SPF when it came to well, what's happening in terms of VC money, in terms of far yield farming, in

terms of you know, what's been built, in terms of in terms of I know, the lunars of this world. Do you think this is a healthy sort of rebalancing in the market that will stop seeing just money, that these sort of momentum trades that are happening within crypto. Yeah, Carolina.

When I spoke with Emily and in December about what's going to happen in twenty two, I predicted that, you know, crypto prices usually dropped in the beginning of the year, and there's certainly half and you know, I think for us that with SPF and I'm really really thankful that got to invest in f t X pretty much early on in I think like the key thing is really about, you know, making sure that we do that we don't

do crazy things. I think, you know, investors is no longer just about investing, is really about helping our founders to build, to make sure that we're compliance, to make sure that you know, operating wise, you know, we're here to help them and we for many many um as you just talk about Ravan and with the lock up. A lot of the investor just sell off right after the six months lock up for many many of our companies. For Salana, I've been holding since eighteen. I still will hold.

It's all about being long term and not being a short term investor. I mean, at the end of the day, I'm not a hedge fund. I'm not here to tray and make sure term money. It's really about like long term holding, supporting the ecosystem. The ecosystem needs to be supported with the regulation as well, and of course FTX front and central with the proposal that's going through at the moment in terms of you know, the future of

options or derivatives and and intermediation within that. I was suppoke to the new chairman of this a CFTC a little bit earlier and how do you feel regulation is getting to grips with this new ecosystem. I think I think, you know, coming from the White House for for a

few more. I think too about two or three months ago, having the executive order to basically indicated the President Brighten really wanted to support, you know, regulate is a good sign for the ecosystem long term, and particularly with st X, the ft T token is not available for US market.

I think, you know, they make a really really conscious choice to move headquarters to the Bahamas, which I went two weeks ago with the fts on front, which is amazingly successful and having a very clear line being drawn what's being offered to the U S customers versus the rest of the world is very, very different. In addition to ft X, you know, coin Based, which already gone public, is making a huge effort to make sure that we all regulate k y C a m L no compliance.

This is a really really good thing for the crypto market long term, and we are raised Capital are here to support all these initiatives, Edith. So it's great catching up with the Race Capital planner, Edith Young, stay well, thank you very much. Indeed, meanwhile, coming up while bitcoins, we're just talking about it slumping at a level that was last seen in July. We're here from Galaxy Digitals.

Mike demograds on that very fact as a brim bag time for our crypto report now with Bitcoin of courls extending losses, even dropping below almost thirty thousand at one point on Monday, this is the first time it goes a slow since back in July. It's declined from a November record high. Crypto contributor Shnani Bassak is hey with

more brutal setting pressure, brutal, brutal, brutal solid pressure. And you take a look over here at Caroline, we've been talking about this one year merry go round, the crypto investors have really gone through, and Bitcoin being the brunt of that, the biggest cryptocurrency here. And you look at where we've gone more than ten percent lower over the last couple of days, now getting a little bit of

lift about thirty one thousand. Again. You and I have talked to novgrads a little bit earlier today with a real worry that they could fall below thirty thousand if the NASDAC also continued to decline. That is a low that he expects. Listen, but it's not just Bitcoin that we want to talk about, although that there is a lot of momentum in that downward pressure there you see over the last couple of days. Let's talk about a cryptocurrencies, even stable coins. A lot of worry that you see

over there with ust being unpegged to the dollar. I want to pull up this tweet from investor Jim Bianco of Bianco Research, and the worry that USC down more than four percent and under ninety cents at one point, the worry that a downward move in a stable coin like that can qualify bitcoin backed by bitcoin exactly the most important part there is there a more selling that needs to be done to peg that stable coin to the dollars. So there's a lot of worries here about

how one asset will correlate to another asset. And let's take a listen to here of what Nobs had to say about the selling pressure when we were forty thousand literally just a week ago. And so the pace of this move has been severe, Right, it's correlated with the risk off that you're seeing all assets, right, the rise of the dollar um. And so I still think thirty should hold. Right, We'll see if twelve thousand holds the NASDAC and we bounce uh in the next few days.

Uh that I think you'll see Bitcoin thirty thirty thousand will hold. If the Nasdaq falls and we head towards eleven thousand, you know there's a shot that thirty thousand goes. I would tell you getting away from price, which is hard to do it today, when the markets down ten percent um, it's really interesting if you just look back at all the adoption that's happened this year. I mean the first quarter, loan venture funds have put fourteen billion

dollars into the ecosystem. And so this is a an asset class, right blockchain, digital assets, Bitcoin that is getting tremendous investment, tremendous interest. And so while the short term you know, outlook is painful and it's and it's gonna be, like I said, volatable with the rest of assets, has the FED adjusts from free money to to normalize conditions, Um, my medium term conviction hasn't wavered. I really do still see this as a very excit aiding asset class with

a lot of momentum. And my infracorrelation because I think that was the main hope, the prayer this saying that was going to these institution investors that have come into crypto is that this is a non correlated asset. But thus far it's very correlated in a large part, probably because more institutional players have come in and they're having to sell as they seen the NASCA go down. Listen, it had less correlation until there was free money forever. Right.

The correlation increased dramatically after COVID because every central bank took a fire hose of liquidity and sprayed on the tarmac, and so it made all assets. You can look at the correlation of you know, fine wines or baseball cards or any collectible to the NASDAC to assets, and so we're unwinding this era of free money, and so it's not surprising to me that Bickmin, which was ahead of its free money, is selling off. I do think those correlations will break down or will lessen the moment we

find some stability in the market. But right now, if your investor, you've got hundred fires to put out, did you over commit to venture? Do you have enough liquidity to pay your private equity commitments? Oh my goodness. I used to be in risk parity and that doesn't seem to be working at all anymore. And so very few people want to put on new risk in a moment of this kind of tumult. And so I think once the tumult stops, I think that's a word, tumult um.

Once the chaos stops, then I think you're going to see the allocators who have been doing all their homework. Listen, I just went around the country and to a bunch of conferences. Is I am wildly convicted that there's infrastructure being put in place to bring lots of capital into the space. So again it's it's it's surviving this this unwigned that investors have to to manage. When you talk about the unmined, though, Mike, you seem to be talking about a lot of people that maybe just saw the

opportunity here. These weren't sort of the early adopters, weren't necessarily the crypto faithful, if you will, at least not in the traditional sense here. For those crypto faithful out there here, do they look at this type of market and think you add to positions, you buy into this dip, or do you just kind of stay the course and wait for whatever shakeout is happening to end. Listen, for the guys who have been in cryptal a long time,

longer than me, this is par for the course. Um, for most people who manage institutional money or manage lots of money, this is unbelievably painful, and so you use the same kind of risk analysis you do when you're training other assets. Right, I would tell you though that the new institutional players that are coming in are coming

in with a very long term focus. I mean, and you can put black Rock and black Stone and Citadel and Apollo into that bucket, right, those are four of the biggest names and investing and that they're getting in right, They're they're working on infrastructure and trying to help create

institutional frameworks to bring their clients in. And so I don't think this asset class is going away because we've had all your clients, your analysts today, I've been asking you about the recession probabilities and how you prepare for that. How do you prepare for that? So I think we are going to go into a recession in some ways that will be good for crypto because it will finally get interest rates calm and down again. Like I'm sure

we'll have crypto adoption both from investors. We're already seeing it with companies, right. So, But as a classes always get prices, always get ahead of where the actual you know, building of a company is. Right, Testa wasn't even you know, selling cars, and they had a decent market cap, and so you gotta got to keep the story up until

you can build product that then generates the revenue. That's the process that's happening in crypto, and so what crypto needs is stability and the non crypto markets at that point, you'll see stability in crypto and you'll see fast adoption and Caroline that was of course Galaxy Digitals, my over Grads Galaxy Digital micro Strategy. Both of these companies dropped more than today in the market. So you see that crypto decline actually exacerbated a lot more in those firms

exposed to cryptocurrencies. Talk to us about exacerbating. Do you think that the pressure with Luda and the fact that a bitcoin backed stable coin means that you have more setting pressure on people on the you know, on the treasury. Is this going to be a really ugly feedback loop. That's a big concern here that there could be ripple

of ripple effects across de five markets. The question is how low does that peg have to go, how much decoupling does it have to be, and how long does it have to last for the Lunar Foundation for us t to keep on having to sell bitcoin into that decline.

Hine always so smart when it comes to crypto. We thank you for that and and D the interview with Mike Novel Grads, Let's get back to the set off that we've seen across well every asset cast today basically apart from bonds, stocks tumbling to a new thirteen months LOWD Michael Antonellie's with us a bout joining us to discuss the tech side of this, in particular because it was the NASDA then I was one hundred now basically in in correction mode, down ten percent in the last

three days. How much further do we fall before capitulation? Well, you don't have to go very far to look for superlatives about how bad it's been for the NASDAC. You're talking about about a drop year today, which is the worst year. You'rest starter year on record by a lot. The next closest is nineteen seventy three, which was down

about seventeen percent. So, uh, you know, not only that, my friend Luke Kawa Bloomberg alumni, he said, uh, he said, this is the biggest non recessionary six month contraction the NASA one forward pe uh in history. So this, this this repricing just been vicious, very vicious, and very rapid. But when you think about the last few years. Maybe this starting to make a little bit of a sense.

If you look at the past, say from twenty nineteen, at the end of one the Nasdaq is up about a hundred and six and that's like one hundred annualizing it about thirty eight percent a year for three years. That's that's a lot. That's a lot. You know, when you look at this pullback, it makes sense from the perspective of the fantas hiking rates. We're trying to take some steam out of the markets, were trying to tighten financial conditions. Mike, why didn't you tell us about this

at the start of this year? Well, using valuations is a very very difficult tool. It's proven to be historically difficult, historically difficult. But what sort of depths we plumbed in terms of valuations visa v the rest of the years? And and indeed, why is company I can understand the thesis of like get out of companies that don't have any E in their PAYE, but what about companies that really do, like Apple, Amazon, Microsoft, Why are they sort

of being thrown out? I mean they those are certainly the largest holders and the ones that we watched the most because of those cracked. That really pretends a very bad market. If you look at some of these really big names, you know, one of one of the things I was looking at today is the fact that most of their big draw downs, okay, the things like a couple here, just throw a couple of like Facebook and

Apple and n Video their biggest draw downs recently. We're in twenty twenty nine, not during COVID, so they were during this pandemic crash. They were about rate heights, same thing back there. So it's very very similar. Multiple compression. The FED just takes these multiples out of the system, and if you look at some of the high fires, you noticed that all of their COVID multiple expansions completely gone, earnings are actually doing okay. So it's all this FED

driven multiple compression. Where can it go to? I mean, right now, I looked at and Video and Adobe and they're both at roughly the same four p E as Clorox. I don't know what that says a pretty well today, Michael,

I don't know whether that. I don't know where the all three of those are too expensive, but Clorox, Adobe and Video kind of have the same formerd PU right now, Okay, is there any technical lines, any any assets that you're looking at, Because it was interesting today correlation started to work in a different way. We actually saw commodities get caught up in this setting. We saw bonds finally becomes

a sort of haven trade. What are you looking for in terms of where to catch shop where tomorrow's trade is going to go. I thought that was important to I really did. I watching the five year note when I woke up, because I just kind of view that as a good proxy for the terminal rate. And it was up to three ten and then it's just the yield started plumbing down to two. Like that. That's maybe a little bit of flight to safety, which we haven't

seen for a while. You see that oil trade down, that means maybe people are having to sell their winners, having to sell the things that have been doing well this year. That's important that that's a little capitulatory to me. I look at two things, like I said that five year note, I want to know that the terminal rates at three or less. I need that stabilize. And then I look at something called discretionary or staples, and I equal weight them to kind of take out Amazon UH

and Tesla. So I equal weight them. And that's what my friends of fatigue is called one of the best strategists in the world. It's kind of a look at risk on risk off. So I want I'm watching that. I need that to make a low. It hasn't. It has not yet. So discretionary overstables equal way that there's a good proxy for risk on risk off. I need that to to to find the bottom too. Michael, I love how you push us forward. We thank you, Michael Antonani.

Of course a bad meanwhile. That does it for this edition of a Bag Technology, But we'll continue to follow this own gu going sell off and the impact it's having across the board. We're back here tomorrow trying buy Tony Fidel of course, he's got his new book, Build and Unorthodox Guide to Making Things Worth Making, as well as get his thoughts on the tech markets. Will also be joined by Falconector's head of institutional coverage, cause from Talking Crypto this is a Bloomberg