The "Bear" Necessities in Crypto and Tech

private markets. We're gonna explore how startups are getting creative as they try to stay afloat and Bitcoin dipping below dollars, How long does the crypto crunch keep up? And is their hope on the horizon. We'll discuss all that in a moment. But first it looked like we'd end the day for sure in bear market territory. But a late afternoon bounce back saved the day. Is it only a matter of time though, bloom said Ludlow here to walk through the movers and who is feeling the most pain? Right?

Get you get to Friday afternoon and you see this on the screen, zero point zero one percent flat on the SMP five and you think it's been a nothing kind of day. Not so volatility across equity markets. There was this late come back on the SMP five hundred. We escaped that bare market territory, that bear market label. But you look at the NAZAC one hundred was still softed by three tenths and one percent, very tech heavy index,

trading at its lowest level since November. On a weekly basis, SMPI also lower by around three percent in seventh consecutive weekly decline, which we'll talk about later in the show. Bitcoin has also been interesting. It kind of held its own earlier in Friday's session above thirty thousand dollars be token, but fell away frankly in the latter hours of Friday's trading, now just above dollars per token. In this volatility and equity markets, it was much more chill in the bond markets.

You look at the US tenure yield two point eight percent. Yes we're down five basis points, but it wasn't one of these days where we saw a big twelve or four teen basis point jump or decline. Much more calm bond market, even though we did see a move into haven assets risk off kind of sentiment. You see the dollar getting strength as well. Ultimately, this is the story

coming me into my Bloomberg terminal. A bear market label or a bear market territory is where we're falling on an index or an asset from its most recent high. We were at that level throughout much of Friday's session, but that late comeback sees us down eighteen point six percent from that January third high on the SMP five. The question really is the direction to travel from this point. Do we continue to see pressure on equity markets or

do we turn a corner going into next week. We're hoping to turn a corner m because I'll be honest, it's been a stressful week. I'm exhausted, you're exhausted, and we could all do with some positivity. Lastly, some specific movies. We want to talk about Apple Interesting up two tens of one percent on Friday's session, but it's been a real drag on the index throughout the week. And Tesla actually also it's lost a hundred ten billion dollars a

market cap over the last five days or so. It has been a real drag on the index, and you forget and one hand, we're thinking about the FED, we're thinking about inflation, we're looking for the outlook on higher rates. But we still have supply chain problems, we still have lockdowns in China, and we're really focused on the impact on US corporates that that's having dear really interesting earnings, disappoint a big plunge on that stock down Foard, a

big drag on the SMP five. What's the story there, supply chain issues. And lastly, I'm looking at ross stores down. The other big story of the week, retail, the consumer, the missed estimates, the cut forecasts, the tepid outlook. The world is changing m and there's a lot to considering the markets obviously interesting indeed on the back of those

targeting results, thank you. While we're seeing tech stocks down across the board, as and mentioned, I want to talk about all this and more with Robert Kentwell, portfolio manager at Upholdings, the firm behind the compound Kings et F which includes a number of megacat tech stocks, and also joined by Dan Eyes, managing director of red Bush Securities, who cover some of the biggest names in the eye of this storm. Robert, I want to start with you, how much farther do you think we have to go

before we hit bottom here? Well, that was a pretty negative setup. Uh, let's see, Uh, let's see if we can find a silver lining in all this. Um. You know, the one thing that's been particularly unique to us about this sell off has been how uniform it's been across so many different technology companies, from e commerce to media to software, and but that doesn't necessarily reveal what's been

happening underneath the surface. So in retail and an e commerce and the media, you've been seeing subscriptions canceled, you can see spending pullback, you've been seeing margins compressed from all the supply chain issues that you've been talking about. But one area that stuck out to us is cloud computing. And you take a business like Amazon that's down thirty seven percent year to day, that has an enormous amount of wealth destruction in a single in a single security.

But because AWS has still performed so well, Amazon's prices actually down about fifth year sixty on evaluation basis. And so what we've been telling investors in an environment like this is you're being given one of these few opportunities to ditch some of these losers, ditch these companies that are burning cash with flawed business models, because you're getting opportunities by great businesses like aws or service now that have actually been growing in spite of what the market

has been saying about their share Robert, who are the losers? Well, uh, there's you certainly have the carbonas. I mean, the companies that have had these extremely marketing driven growth stories that are very expensive to fund. You know, you and I we talked a lot about the right sharing companies last time we were together. Peloton obviously falls into this group. But any business where you see them spending more of their gross profit on marketing dollars than any other opex

slide item, that's usually a red flag. And those tend to be the companies now if you throw a screen up of you know, take gross profit minus marketing, those are the businesses that right now are all struggling the most because it's only getting more and more expensive to acquire customers when you get into these demand m evaporating climates like the one that we're in right now. Dan, you of course cover some of the biggest names that

are in focus here. For example, Apple, which you know, facing some some some some challenges that are you know now facing companies across the board. How do you think Apple weathers this? Do you think Apple has further to fall? And you know, does Apple keep innovating? Is this is safe by right now? I mean, look, I think it continues to be a rock with Gibraltar stock and a business model in terms of where we see iPhone the

name on the other side of the storm. And I believe, as we've talked about holding up much better, they're expect expectation. But I think right now is your other guests talking about everything that you can get thrown out in risk off environment that creates the opportunities to own these means. And when you look at Apple, we think the services business and women is worked over a trillion dollars microsofts another example, it's all going to be induscriminate and selling.

That's the opportunity. You know, in terms of how we're handholding horns, Robert, is Apple it aimed to you that stands out as something that will survive the storm. I mean Apple, you know you're not gonna find a lot of people who don't think Apple is going to keep innovating. Yeah, it's like it's fine. I mean, it's it's a safe place to put money. It's probably not the place where you're gonna get these, you know, devastatingly awesome investment returns

for the next ten years. That's what I think is also really exciting about a market like this is you get to even look past the fundamentals some of these businesses right now, and investors are reevaluating saying which pieces of technology you're actually gonna matter the most over the

next ten years. And everything was focused around the iPhone in the app store for the last ten years, and those are likely to continue to remain important, but they're gonna look much more mature, and you see that in some of the regulatory dealings that you know, we're having to shake out with with businesses like Apple right now. But we think, you know, there's opportunities to look, you know, deeper down, and you know, you did a great interview

to the night with Dave Zuoki over roadblocks. We think that platform has the potential will be one of the most important businesses. It is right now tracking to be bigger than Nintendo. How many assets are there that exists in the market of public investor can participate in to

get to live with that type of household recognition. So whether it's a business like roadblocks for a cloud computing platform like in AWS, or enablers like data down, these are some of the enabling technologies that we think are gonna matter most um this decade. And you then check out that interview with David Buzuki the see of Roadblocks on Studio one. Point out, Dan, I want you to react to some of the things Robert just said there. Let's talk about Apple. Is Apple just the safe that

maybe too safe in this environment? I mean splin adjusted stock six hundred they said the same thing about it shape at a hundred hours and now okay, remember it goes back to your Apple continues to be so much more intervention beyond I think how investors appreciate it because what we've seen install base, it's a billion iPhones or some having upgrade last three and a half years. Then you look at their being intellator room game in terms of the chip side, plus services like Robert talked about,

I think indeeds environments. You have to look at software, fiber security and the years when we believe we're gonna be in terms on the stalwart side and Apple is going to be one of them, and it's one the haters will continue to hate. But to see more. In my opinion, we will it again to a blue trillion

dollar mark up once the inscriminate selling stops. Okay uh, And I can't let you go without talking about Tesla, which is you know now no longer the top stock in Kathy Wood's flagship fund of course, facing some um different forces based on what's going on with the Musk and Twitter deal. What do you think, well, the story for Tesla will continue to be here and and and how much will Tesla stocks suffer from the uncertainty over whether or not it's CEO is going to buy Twitter?

M Well, the book first off, in terms of China and the zero COVID situation, that's been a huge headwind. I think you know they're op soft deliveries and that's over our price target this week. When it comes to Twitter, it's become a full on circus show that's almost turned into a twilight zone. And you know, you look at Musk, he opened Pandora's box and tomm in about the need

to hand holding. You know, it continues to be uncertainty not just Twitter in terms on the test of stock perspective throw distraction situation, that's something he needs to give comfort to investors at a turn where risk goships are getting thrown out the window. Robert, what's your take on this Tesla Twitter situation and and now the fact that they are intricately entwined and do I have to have a take? Uh? Of course everybody has to have a take.

Look Twitter Twitters. I actually think no matter what happens, whether Elon bias Twitter or not, I do believe that Twitter is going to turn out to be a better company three or four years down the road as a result of this moment of turmoil because it is forcing the company looking where to reevaluate its business model. They're realizing that they can get away with charging their biggest accounts, uh for you know, tweeting, and they should be right.

We're on Twitter, it's on we pay to be on Twitter, but they don't charge us anything. So there's absolutely a way to unlock you know, traditional social media modernization mechanisms. They haven't taken advantage of that. No matter who's runing a company posts all this stuff that's gifts or about um, you know, we think that's now much more likely to happen. Um. We're actually we're kind of wondering pay you know, Twitter Board, maybe you reopen the process up, like why didn't you

run a full process to begin with? Why didn't we get multiple bidders in here? Why did you, you know, do a deal with Elon all by himself? You know, why didn't you see if Google wanted to take a swing at it? Because who knows, the regulators haven't been quite as aggressive as people feared that they might be. So we think that this saga is far from over and that there's a wide range of potential outcomes for Twitter.

And as it pertains the test lad, it's still a car company, um, and so it doesn't kind of fall into our software and digital advertising universe that we follow really closely. All Right, I knew you'd have a take, So I'm glad I've asked. Thank you for sharing that with us, Robert Kentwell of Upholdings, Dan, I've always good to have you as well. We'll see what next week.

Called belts are tightening across the board and startups are also feeling the pain, with valuations being cut and layoffs underway. For more. Now I'm joined by Johnny Price, the vice president of fundraising, we founder. So Johnny, first of all, you know, we see what's happening in the public markets. It's a lot more difficult to understand exactly what's happening in the private markets. What are you seeing? Just how much uncertainty and quite frankly panic is there. Yeah, there's

a lot of uncertainty. It's the right word. UM. I think we're seeing less contraction, especially early stage. I think growth stage is contracting a little more in recent months. Early stage, I think we're seeing less to date. UM getting kind of mixed reactions from vcs and founders that I'm talking to. UM, But obviously I'm not sure if

you saw that. You know why Combinator, you know, their founders recently saying, you know, buckle up, you know, raining rain in the spending, get to default alive, get to profitability asap because it could be a rough a few few months and years ahead. Well exactly, you've got y combinators saying that, You've got other vcs sending out their

black Swan membos. On the other hand, I saw this from Ali Partov, who's an early stage investor he tweeted, Unlike vcs predicting doom, I'm bullish for early stage startup. This downturn differs from two thousand and two thousand eight. If you're an early stage CEO, don't panic, don't obsess about extending runway, obsessed about making something people want. There's a whole thread below it. What's your reaction to that? Would you agree? Um? Yeah, I think you could argue that. Um.

I think I'm I'm a little more pessimistic. Maybe. I think it's going to be harder and harder for early stage founders to raise counsel over the coming six months. Um uh because um there's uh less Um. Vcs are gonna just be tightening their belts. You know, we're going to see the valuations in the public market compressed the great stage early stage. UM. I just think it's going to be harder for early stage founders to raise I think post post two thousand and eight we saw that.

I think we're going to see that again in two So we found funder focuses on something called community rounds, which of course is different from venture capital funding and also typical crowdfunding. As I understand it, Can you explain what that means. Yeah, absolutely, So we found us a platform that's let anyone invest in startups they love UM. So for eighty years, the securities laws of this country, as you know, didn't allow ordinary Americans to invest in startups.

You had to be accredited to invest in early stage companies. UM. The Jobs Act of twelve that was rolled up to the sec now allows everyone and not just created investors, not just switch people to invest in startups they love UM. And so what we're trying to do we founder UM, is to popularize this concept of community around. When the Jobs Out was rolled out, it was called equity crowdfunding. UM. This is how you introduced this segment. We don't love

this term crowdfunding. We're trying to rebrand it as a community around. You. You owe twenty five cents to the square jar Emily fees in the word crowd funding earlier. And so the idea with a community around is that startup founders can raise up to five million dollars per year from their customers from their community UM and uh, you know, alongside conventional investors vcs and angels. Mercury is

a great example UM. Recently they raised a one twenty million Series B from Andrewson and Co. Two and then opened up a five million dollar allocation to let their customers invest on the same terms, um and in my

ce EO with no factor. Mark and then has called those two and a half thousand we founder investors his favorite investors, you know, letting his customers invest, he thinks is a good thing to do at you know, face the avenue puts a little more cash in the bank at a time when, as we've been talking about, that's probably not the worst thing in the world, and most importantly, you know, generally a good thing to do for startup

founders to be delighting their customers by learning them investing them. Right. It give us an idea how much money has actually been community raised, though right now it still seems to be the exception, not the rule. Doesn't it have to scale up dramatically if the next Uber or Facebook or Google is going to be community funded. Yeah. Absolutely, It's still a very small percent of early stage capital right now. So as a signage your VC an angel dollars, community

arounds are very very small. Um. You know, it's it's been growing so that the job the jobs that was right up with the sec in twenty sixteen. In March of twenty one, the SEC rolled out some improvements to the regulations that increased the amount that startup finnessting raised from a million to five million per year UM. And since then we've seen significant growth in the sector and

sector overall group by about four acts in one. And I think the froth the early stage VC market in twenties twenty one was actually a break on the sector. I think in twenty two will be countercyclical. We'll see you can have me back in a year's time and and see if that prediction has has been born out.

But as early stage VC pulls back in two, which we expect, I think that more and more early stage founders will be looking to their customers, looking to the community, looking to we fund this million investors UM to to you know, be a buffer and enable them to raise capital where otherwise they might be struggling. To to your point, it's not a panacea, you know, this is still uh, this is hopefully a silver silver lining on on a

day of pretty dark clouds. UM. It's still a relatively small part of UM you know, tital early stage capital formation. You can only rate five million dollars per year. Um. But yeah, we're seeing we're seeing positive, positive trends. Another string though that can be pulled for sure. Johnny Price, vice president of we Funder, thank you. Coming up. We are going to Miami, going to get a check on the crypto market. That is next. This is Bloomer Bitcoin

dropping below twenty dollars. What will the weekend hold as crypto continues to trade. I'm joined out by Bloomberg Intelligence. Is Mike mcglog with us from our Miami bureau, So Mike talk to us about the factors at play here. It seems like cryptocurrencies are so tightly correlated with what we're seeing in equities, which is the opposite of what many in masters hope they would do. We're getting there, Emily,

It's just gonna take a little time. But right now it's a significant fact that you've pointed out is the stock markets going down. The tide is ebbing. The Fed's jaw boning has got to reduce set ability for people to buy stuff, reduce set risk those risk assets and bitcoining the theorem and cryptos are prime part of that. Remember, they went up the most, they have to come down. But the way you started this segment, I think is the most significant thing is what's going to happen this weekend.

So it's five thirty on that afternoon and the East coast all markets are shut, but Bitcoin is trading, and that's what the markets starting to realize. This is the world's most fluid seven global trading vehicle with price discovering and no one else's liability, and that's starting to trickle inch what I'm sensing his bids blow. Bitcoin offers above in the stock market. And a key fact this week is bitcoins down about two percent and nazex down about

four percent. So bitcoins actually I'll perform in this week despite the fact that it's much higher volatility. Okay, now, not all digital tokens are being viewed equally. Are there any winners here? Well, I think bitcoin is gonna be the biggest winner, along with gold and protectionant potentially long bonds. Gold was up about two percent this week in Bitcoin

is the digital version of gold. But the way I view gold now is if you're not allocating some of the bigcoin and your gold investor, then you're missing out. But that's the key thing to remember. But the bottom line that's really happening in this space is the proliferation of crypto dollars. Now, we heard about what happened with an algorithmic dour crypto dollar that broke down people call

the stable coins. But on coin market cap now the top of among the top four cryptos, there's two crypto dollars. There's bitcoin, Ethereum, tether and usdcoin. And this is what happened during the bear market two thousand and eighteen. The only thing that was going up was the proliferation was increasing market cap of dollars. And I think that's what we're seeing in the spaces. It's just a better way to transact, that's crypto dollars. All right, Well, we'll be

watching to see just how wild this weekend is. Indeed, Bloomberg's Mike mcglow for us in Miami and go and I'll let you get started with your weekend. Thanks Mike, Welcome back to Bloomer Technology. Emily Chain in San Francisco. Want to get back to bloom brooks Ad Ludlow for more on the SMP five hundreds losing straight again, the longest one in a couple of decades exactly. So it's interesting, like at the top of the show, we were talking about how we ended flat on the SMP five hundred,

but there was volatility. Your guests said, perhaps I was being a little bit dramatic, you know, I love drama and being a diva on a Friday about the market. But over the course of a week, that's a lot of red on the screen. The SMP five hundred down three. The declines in technology heavy indexes like then as that one D, the n Y s Fang Plus Index, which is made of the megacaps, and the US listed shares

of China tech companies also seeing big declines. And there's really good reporting on the Bloomberg that if you have a four or one K where you think you're diversified because you're tracking the SP five hundred, well you're US is exposed. If you strip out the five biggest megacap tech stocks, the declines this week would have been lesser. The reality is this chart. Look on the far right

hand side. That block of red. The seventh consecutive weekly declined for the SMP five hundred driven by tech the likes of Apple, the longest weekly losing streak since two thousand and one. That's a lot to take on board, and we started having discussions about how analogous, how similar what we're seeing now is like what we saw in two thousand, two thousand one in the dot com bold. Now, full disclosure, I wasn't doing this in two thousand, two

thousand one. Right now, I'm a little older than you, but I was yet either no no comment, but I've read about it. Fortunately, you have a guest who I'm sure has studied the charts and the historical data. But this is the question, right, are we seeing what we saw the dot com bubble and what happens next? Right? Indeed, Ed Ludlow, thank you well. From Apple to Teslas, some of the biggest names in the SMP, fueling this relentless sell off that briefly pushed the broad equities benchmark into

bear market territory. From more, I want to bring in that guest, Eric Freeman, US Bank Wealth Management ce I. Oh, so, Eric, is this different than the dot com bust or not? Emily actually was working, in fact, about a couple of blocks away from where you are right now during the dot com rise in San Francisco. So I would say that we do think it's a little bit different. This time only. The biggest factor behind that is more of

a macro step back with the Fed funds. Back then at six and a half percent, that was a really elevated level. Right now we think we probably peak it like three and a quarter three and a half for Fed funds. So I do think that in terms of the selling that we saw back then, it was relentless.

It certainly feels relentless now. But we do think that there again there's there's more of a calming effect that should emerge, let's call it a little later this this year, so we'd expect a little more volatility, Emily, But again we don't have the same Fed funds backdrop that we had back then, so a little more optimistic than I was then. So you use the word relentless, I'm wondering, does that also mean you think this sell off is unwarranted given the fundamentals. I mean, we did see a

lot of companies, especially tech companies, miss on their results. Yeah, I don't think it's unwarranted. As as tough as it is to to experience, Emily, I think that that when you go from Fed funds projections that the Fed has has put out, there were basically nothing. You've had this whole repricing that started with a two year and the three year treasury and all their as two classes have to react. So ultimately our viewpoint is that the the

overall repricing is probably in the sixth seventh ending. We think there's probably a little more left to go, especially if you start to see a evidence of demand and destruction. We're not seeing that quite yet, but some of the retail earning that we saw with the past couple of weeks indicate that there's some tough stutting heads still. So again, we do think there's probably a little more downside left, but not quite the snare we saw way back in

two thousand, two thousand and one. Well, we are calling

a bottom here, like how much worse does this get? Yeah, I think that that for us, the you know, the downside snare is probably down under five or seven percent across broad SMP, probably a little more than that for NASTAC and I think at that point and the Fed has a decision to make, that would be the market setting a very clear signal that this is a this is a challenging environment, and that we're starting to see some erosion of both corporate profits as well as consumer activity.

So we think that that would be really a heads up period where if the FED says, you know what, we see it, but we still have to contain inflation, that would be we think probably a trapdoor for a little more downside. But again, the first test I think in earnest will probably come down under five or seven percent from where we are right here. Where do you see the opportunities in tech? I mean there's a lot

of confusion. For example, you know Netflix having you know, its first subscriber loss in a decade, and then Disney pulls through with surprisingly optimistic subscriber numbers. Yeah, I think a couple of areas that we find attractive. One would be software as a service. We we think that that that installed base plus the ongoing maintenance revenue is attractive. That's certainly a model that you've seen adopted from a number of different different companies. So we still think there's

there's an opportunity there. I would say, just on a broader basis, and only if you look at the bias from CFOs and CEOs, they recognize that we're not getting more productive as an economy. So we do think that that communications infrastructure, even though it's obviously been challenging, we still think that's an area that as we see more hybrid workflows continue, that's the spot that we think as some opportunity we would be moving up in cap and

up in quality. Again, this is more of a of a duck and cover type of strategy in the near term, but again we think software is a service as well as what we're seeing with respect to broad infrastructure remain attractive. And what about on the flip side, we have a guess earlier reference the losers saying it's time to get

out of the losers. Who do you think the losers are? Well, I think there's you know, there's there's a saying that's probably approp to right now that it's it's too late to sell and it's too early to buy on on some of those, uh, some of those more challenge business models. So I would say that the super consumer heavy businesses, those are the ones that would be would be more risk. So let's call it the nice to have subscription models. Those aren't areas that we think will be will be attractive.

If you look particularly at what we're seeing from a macro perspective, Emily there really is some erosion in and of course spending power because of inflation, but we do think the wealth effect is relevant here. You talked about crypto earlier, talked about just portfolios in general. We start seeing home values in your backyard of the Bay Area as well as other areas that of course have been very,

very strong. That's the next leg that we think that some of those again secondary in tertiary of subscription models are more more at risk. How bullish are you on crypto, because you know we're touching on this earlier. I think a lot of crypto investors have been hoping to see crypto break away or be immune to um, you know, broader equity sell offs, but that's so far hasn't really

been the case. Yeah, you know, it's something that if you look at the correlations across broad crypto, and if you look across the correlations of assets that we're supposed to act differently than they did, they're really gear. They're early levered. I mean, even if you look at at at NASTAC, which appropriately so is thought of as a as a really tech heavy index, the worst performing subset

of of NASTAC is actually the industrial components. So I think what that says is that sensitivity towards the consumer is becoming more of a challenge. And if you also look at some of the issues that we're seeing right now across currency and currency risking, and the dollar has been a one way trade higher, that's another factor that I think the correlations between dollar, correlations towards consumer, those are things that have been the other way than people

expected at the start of the year. All right, Eric Friedman, we will see what next week brings. Thanks for sharing your perspective here with US US Bank Wealth Management. CEE. I am it is time now for our crypto report, and it seems that crypto winter in full swing. For more on this, I'm joined by Coveta Guptashi is the founder and general partner at Delta Blockchain Funds. So Kvita, I want your take, just how long is winter gonna lask and how cold is it going to get? Like

how much lower is before I'm going to go? Hi, Emilee, thank you so much for having me um. I think it's just the beginning of crypto winter, to be very honest, and uh, I am very surprised that people are expecting that it's going to continue to over around thirty K. I do expect it to go down to somewhere between fourteen K, eighteen K, maybe twenty two K as a stable point. But remember this is we have seen this in the past two times. This is nothing new, right.

Every time it goes up to an all time high, there is a point when it comes down to and find the new lower point as a base point to stand around. I still feel that we are if we have already entered crypto winter, we're gonna stay here for at least year to year and a half, and we should we Yeah, I I don't believe that bitcoin is going to go back to forty five, fifty or sixty

K for another year and a half. We will see another all time high, but that will be for ethereum to actually especially for either because I believe this is the time and people are going to build and they're gonna have a lot of technology with major adopt option. Look at what FTX just announced, which is going to bring a lot more people into the space, and that adoption is going to trigger back us to another big

high cycle. So let's just game this out for for for a moment, you think Bitcoin, for example, we'll stay in the twenty dollar range for the next year, year and a half. Potentially, Yeah, we can see some more depths and we can see some more high but I don't think that we're going to see it going back to sixty to seventy k during the winter time anytime soon. Huh. So then what does the new high become after that? I mean a lot of investors are getting in just

waiting for that. I think a lot of people have been talking about bitcoin at hundred k, and I I can't really predict whether it would be hundred k or not, but I can definitely say it's going to find a new high, which was last time sixty four something. But as I said, every time, if you look at the history and look at the data every time, if it has gone back, it's not purely space culative anymore. Speculation is definitely a part of it, but it's also the

adoption of technology. It's also the adoption by big companies and institutions. Tesla holding it on the balance sheet makes it goes up. Twitter having uh basically tipping mechanism on Bitcoin makes it go up. And I feel like the same thing with ethereum and other technology driven tokens that we're going to see the adoption making it go all time high, but I don't think it's going to happen

in another year, two year and a half. I'm curious what you think about what's happening at coin base, and you know, the most established platform for the trading of cryptocurrency, you know, and obviously their business is, you know, somewhat divorced from you know, the actual trading of cryptocurrency. What do you make of what do you think the fate of coin basis, I mean coin bases, a centralized exchange.

I don't see all the speculation about coin based going bankrupt. Honestly, I don't believe that because the technology is so strong, and I do understand that when the when it is really deep, you don't see that much of trading volume and exchange making money out of the trading volume or the defiance taking, et cetera. Will not have that much of cash to show. So there are four thirty million losses.

I completely understand when our companies into an expansion mode and suddenly crypto prize is dumb, this is what you expect. But will that make them disappear? I don't think so. I do believe that they have already announced that they're going to have a hiding freeze, They're gonna take care of cost, etcetera. And I do see them whether the storm honestly speaking, but with different measures, and that there

we keep hearing it is time to build that. I'd love to get a little more specific when it comes to crypto projects. What do you think makes it and why what gets washed out? I think a lot of fluff gets washed out. As a as a pre seat, seed stage, early take investor, for over five six years in the space, I can tell you every time there is a high anyone who thinks, oh, I have an idea,

the idea thinks is like hundred million dollar evaluation. Now you're coming back to fifteen million dollar valuation with the product or the m v P associated with it. Last time we saw Defy really really getting built during the crypto winter, and that's pushing the adoption and the money coming into the space, which also had n f T associated with that before that in two thousands, sixteen and seventeen.

The I see, oh, the smart contract on Etherium is what made us come down, come up from the crypto winter and height of sev hundred dollars free, and I think as we go into the space, I think multi chain indexing search results, a lot of analytics platform V see that's gonna really gonna build out, and maybe a whole new, whole new infrastructure platform. I mean, people have been buying n f t s from multimillion dollars. We really don't have a proper infrastructure for n f t

s right now. And I'm very excited about what's gonna come out of this crypto winter. Curious about your thoughts on Elon Musk potentially taking over Twitter, you know, given its role in the crypto community and Elon Musks role in the crypto community himself, do you think decentralized social media is actually possible with blockchain technology As of the current technology which I have seen in the space, I don't think so. Identity has been a huge problem in

the space. We still need to figure out a lot of indexing, identity, trust associated but should social media and reputation system is a huge problem which were still figuring it out. Um. But in the future, can there be a technology where it could be truly decentralized? Absolutely, that would be an ideal day. But No, it cannot be possible. It's not possible that any technology you have seen in the space so far. So are you calling Elon Musk's laugh?

Then I I think he's a visionary. He probably thinks that over years he's gonna build. It's like when ten years back he went and said he's going to put people on Mars. I mean, he has put a spacecraft on there. There hasn't been a human being out there, but hopefully the next ten to fifteen years there would be. And I think that's what he's looking for. A decentralized social media, which is a novel idea and something which would be great for the tech and people and mental health.

I guess. But is it possible today in an year, two year, three year, I don't think so. All right, So looking forward, you know the market is still reeling from the Terra debacle. What's next? What's next for stable coins? We have to make a differentiation Like Terra vo was is a programmatic stable coin. Right when the definition of stable coin came, it is like back to some FIA currency and one is to one. So USDC had to show in their audits, like how much reserves do they

really have? In dollars, cash, cash equivalent, bonds, tosties, etcetera, etcetera to support it, and so did us t t to a particular percentage. I think Terta is different. It has been on the programmatic side. So one thing which we have learned though the decentralized world will always push away from fear. Then try to have a different version of programmatic stable coin which is pegged by its own cryptocurrency. We do have a lot of issues and a lot

of gaps as of now, which Terta just showed. Um, will there ever be a programmatic stable coin? I absolutely hundred person beliefs. So would would that be in an year or two during this cryptos winters? I don't think so, because a lot of trust has been shaken and a lot of people got wiped out. All right, Gupta alta blockchain fund founder, thanks for giving it to us straight, appreciate it more. Sols Accomb, this is boomer. I want to get back to the markets and bring back our

at ludlow one final time. So the big question is does this volatility continue next week or not. There was an investor earlier in the show who thought you were being a little traumatic. Yeah, they thought it was being traumatic. I mean, if we knew the answer to which way markets would go, we'd all be very rich, right if you're an investment manager or retail investor. We can do is financial journalists look at the past data and what's really interesting and think about the sp We almost fell

into a bear market. That's a decline from the most recent high. We've seen this before on an inch day basis. I'm going to give you the history. I'm sorry for a Friday to thousand eleven, two thousand eighteen, the market on an inch date basis, some cases when beyond as a decline, but it never actually closed in a bear market, and we never even got close to those levels in the weeks that followed. So it's a psychological test for the market, and really a conversation is what is it

that we're worried about? What is is it inflation? Is it the Fed? Where do we look for some hope? Well, and it was interesting hearing our guests speak throughout the show that the fundamental the macro economic issues are very different right now from what we saw in two thousand one, for example, And we should bring it back to tech. I mean, remember some of these companies like Apple that

are now feeling a lot of pain. These are like amazing companies, strong balance sheets, you know, But there's so much happening at once. When we talk about check broadly, we have to remember what the story is here. The FED is going to raise rates, and higher rates discount the present value of future profits, making tech stocks less attractive as an option. But at the same time, we're worried about whether the FED can fight inflation without causing recession.

In other words, if they raise rates too quickly and in two bigger increments, the economy might crash. And no one does well in a bad economy like that, not even the likes of Apple. But if you look at the companies and their fundamentals, and if you talk about a company like Apple, which was on the brink of bankruptcy literally in the late nineties, it's a completely different story.

Apple is going to keep making new products people want to buy, and they've got a lot of cash, they have innovation, they have scale, And then we wonder what's going on in the rest of the world. We put aside the FED, we put aside the inflation picture, and we worry about supply chains, the lockdowns, in China them a big problem has been We're really sorry, guys, we missed earnings because we couldn't sell enough products. Why because our supply chains are in and the question is how

our investors is going to interpret it? And there are is also this Tesla Twitter Elon Musk overhang, which is because of a completely different narrative. Yes, Tesla has supply chain issues, right, what is Elon must gonna buy Twitter? Is he going to is he gonna take Tesla? Tell whether that or what I thought I was going to get through an entire show without talking about Elon Musk. I really thought this would be the day. There's two things,

key man risk. Elon Musk is very busy. He's the CEO of Tesla, and the market's asking is he distracted? That's the simple way of looking at it. But also with Twitter, you know all of this indecision about will the deal happened, won't it happen? Twitter didn't really suffer like the rest of tech stocks. It hasn't seen the declines that other tech companies have. And there's a question why, Well, because it was subject to a takeover deal, a take private deal. But if you factor in the cell off

we've seen in tech. Should Twitter be revalued and should Elon must come back in at a lower price? I don't know who knows Twitter's annual meeting next week, You're going to be there, going to be a big moment. Where are we talking about this a lot? So don't forget it yet at Ludlow. Thank you. That does it for this edition of Bloomberg Technology. Have a wonderful weekend every one Wall Street week with my colleague David Weston coming up next, He's going to be talking about inflation

and all of this. In just a moment, Monday shouted and Oryon of Adobe