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LIVE FROM BLOOMBERG WORLD HEADQUARTERS IN NEW YORK.
TIM: WELCOME TO "BLOOMBERG CRYPTO." WE HAVE A GREAT PROGRAM COMING UP OVER THE NEXT HALF HOUR. LET'S TAKE A LOOK AT WHERE THINGS STAND THE LAST SIX DAYS FOR BITCOIN. IT HAS BEEN RESILIENT DESPITE THIS GEOPOLITICAL SHOCK THAT HAS SENT ENERGY PRICES. IT HAS HELD ITS RANGE FROM JUST AROUND $65,000 TO AROUND $73,000. IT BROKE THROUGH TO HIT $76,000. THAT IS UP AROUND 13% THIS MONTH. THE QUESTION PEOPLE MIGHT HAVE RIGHT NOW, IS THIS ACTING LIKE A SAFE HAVEN? LET'S FLIP THE CHAR AND LOOK AT HOW FLOWS HAVE BEEN DOING. THEY ARE SURGING IF YOU LOOK OVER THE PAST COUPLE OF WEEKS. BITCOIN ETF'S TOP $763 MILLION. MAYBE THIS RETURN OF SOME INSTITUTIONAL CONFIDENCE.
SCARLETT: THEY ARE DEFINITELY STANDING OUT THIS MONTH AS WINNERS COMPARED WITH VOLATILITY OF MORE TRADITIONAL ASSETS. SINCE THE START OF PRESIDENT TRUMP'S WAR IN IRAN, BITCOIN UP ABOUT 13%. GLOBAL STOCKS AS MEASURED BY THE MSCI WORLD INDEX DOWN 4%. EVEN GOLD HAS SLUMPED ABOUT 5%. ANALYSTS SAY TRADERS ARE UNWINDING THEIR BEARISH OPTIONS THAT BITCOIN WOULD FALL BELOW THE $60,000 LEVEL. AS THESE POSITIONS ARE CLOSED OUT MARKET MAKERS ARE FORCED TO BUY BITCOIN TO BALANCE EXPOSURE. THAT HAS LED TO INFLOWS. THERE IS AN ABSENCE OF SIGNIFICANT CALLS, TRADERS ARE NOT AT THE MOMENT AGGRESSIVELY TAKING ON BULLISH POSITIONS.
TIM: LET'S GET A TEST OF MIKE'S BULLISHNESS. HE IS THE CEO OF BIT COVE. YOU HAVE BEEN IN THE INDUSTRY FOR QUITE A WHILE. BITCO WORKS WITH INSTITUTIONAL INVESTORS HANDLING THE INFRASTRUCTURE AND MORE. I'M CURIOUS WHEN YOU LOOK ACROSS THE LANDSCAPE WHAT YOU ARE SEEING NOT JUST WHEN IT COMES TO PRICES BUT HOW YOU WOULD CHARACTERIZE THE RISK ENVIRONMENT?
MIKE: WE HAVE SEEN A LOT OF CYCLES FROM BITCOIN OVER THE YEARS. IT GOES UP PRETTY EXTREME, IT GOES DOWN PRETTY EXTREME. IF YOU ARE NOT READY FOR MY 60% DRAWDOWNS YOU ARE NOT READY FOR MY 600% GAINS. IN THE MARKET, A COUPLE OF INTERESTING POINTS. BITCOIN HAS ESTABLISHED ITSELF AS A GLOBAL LIQUIDITY VENUE. YOU COULD GO TO BITCOIN SEVEN DAYS A WEEK. IT'S OFTEN ONE OF THE FIRST THINGS THAT WILL BE USED. THAT CAUSES ONE SIDE OF IT WHICH COULD BE DOWNWARD PRESSURE. THE OTHER THING WE HAVE BEEN TALKING ABOUT FOR YEARS, IT'S A HEDGE AGAINST DOLLARS, WHEN THE TRADITIONAL SYSTEM STRUGGLES. WHAT'S GOING ON IN THE MIDDLE EAST IS REMINDING EVERYONE YOU COULD WAKE UP ONE DAY AND HAVE A STRUGGLE WITH YOUR EXISTING BANK ACCOUNT. CERTAINLY IN THOSE REGIONS, ACCESS TO MONEY IS SOMETHING THAT IS VERY MUCH TOP OF MIND. THESE THINGS GO TO ODDS WITH EACH OTHER. ON THE OTHER HAND YOU HAVE SOME THINGS PULLING IT UP. THAT PROVES THE THESIS IN THE GRAND SCHEME.
SCARLETT: CLEARLY LIQUIDITY IS VERY IMPORTANT HERE AS AN INDICATOR OF WHERE THINGS GO. I WONDER HOW MUCH IMPORTANCE YOU PUT ON THIS IDEA THAT THERE'S NOT AS MUCH BULLISH POSITIONING IN BITCOIN, THE REBOUND WE SEE IS DRIVEN MORE BY HEDGE UNWINDS THAN ANYTHING ELSE.
MIKE: THIS HASN'T BEEN SPECIFIC TO THE CRYPTO SECTOR. THIS HAS BEEN TRUE FOR SEVERAL MONTHS. SEVERAL THINGS FROM AI, GLOBAL CRISIS, THEY ARE ALL CAUSING PESSIMISM. DIGITAL ASSETS IN PARTICULAR BITCOIN. THOSE OF US IN SPACE, IT WILL GO UP, IT WILL GO DOWN. IT IS NOT A CAUSE FOR CONCERN.
TIM: LET ME TALK ABOUT THE ENVIRONMENT ON THE REGULATORY LANDSCAPE. YOU RECEIVED APPROVAL TO BECOME A NATIONAL TRUST BANK. I WANT TO UNDERSTAND HOW THIS CHANGED OR AFFECTED YOUR BUSINESS OR CHANGE THE ROADMAP GOING FORWARD ABOUT WHAT IT MEANS THAT YOU COULD DO NOW THAT YOU HAVE THIS.
MIKE: IT HAS ALWAYS TAKEN A SUPERHIGH REGULATED PATH. WE ARE OFTEN THOUGHT OF AS BEING A CUSTODIAL PROVIDER. WE ARE PROVIDING THE FOUNDATION OF THE BOTTOM LAYER OF DIGITAL ASSETS, TECHNOLOGY FINANCIAL SERVICES. YOU HAVE STATE STREET, J.P. MORGAN, THEY BEEN AROUND FOR 100 PLUS YEARS. IT IS VERY WELL ESTABLISHED, UNDERSTOOD SYSTEMS SO THAT FOUNDATION YOU BUILD FINANCIAL SERVICES ON IS SOLID. LAST YEAR UNDER THE PREVIOUS ADMINISTRATION, BASICALLY THE REGULATORS SAY THEY DIDN'T WANT TO PARTICIPATE IN THIS. THEY WORK PERFECTLY FINE. NOW WE HAVE THE OCC NATIONAL BANK CHARTER, IT IS THE SAME LEVEL WE EXPECT FROM ANY BANK HANDLING SECURITIES. WE VERY MUCH HOPE BUSINESS, HELP ALL OF WALL STREET HAVE CONFIDENCE THAT THEY COULD WORK WITH US. SO THAT THEY COULD GET INTO THE INDUSTRY MUCH MORE CONFIDENTLY.
SCARLETT: IN THE CURRENT PART OF THIS CRYPTO CYCLE, WHICH PARTS OF THE MARKET ARE DRIVING THE MOST DEMAND FROM YOUR CLIENTS TODAY?
MIKE: WE'VE GOT EVERY BRAND NAME COMING INTO THE SPACE. MASTERCARD ACQUIRING THEM THIS MORNING. CITIBANK IS THERE, ALL OF THESE ANNOUNCEMENTS ARE COMING OUT. ALL OF THESE CASCADE ON TOP OF EACH OTHER WHILE THE BUILD IS HAPPENING. THESE LARGE FIRMS HAVE A LOT OF CONSIDERATIONS. IT DOESN'T HAPPEN OVERNIGHT. THEY START THE PLANNING PROCESS. THEN THERE IS A BUILDOUT PROCESS. ALL OF THESE THINGS ARE IN PLAY. WE ARE ABOUT TO SEE A BIG EXPLOSION. WE HAVE CURRENTLY SOME EARLY ENTRANCE AROUND OFFSHORE SINGLE STOCK SPV VEHICLES. THESE WILL BE FIGURING OUT HOW TO DO INSIDE THE U.S. WITH REGULATED PARTIES.
TIM: TALK ABOUT THAT. I WAS AT BOKO LAST WEEK, TOKENIZATION MARKETS, WHAT DOES THAT LOOK LIKE IF WE LIVE IN A TOKENIZED EQUITY WORLD?
MIKE: YOU HAVE ALREADY SEEN THE NEW YORK STOCK EXCHANGE MOVING TOWARDS 24/7 MARKETS. WE HAD A NEED FOR A LONG TIME. PROBABLY COULD'VE BUILT IT WITHOUT DIGITAL ASSETS. THEY ABSOLUTELY DESERVE IT FOR DRIVING THIS PARTICULAR TRANSFORMATION. JUST LIKE WE HAVE SEEN WITH STABLECOINS. YOU PUT OF THE SMART CONTRACTS. SAME THING NOW HAPPENS WITH EQUITY. SOME OF THE FEATURES PREVIOUSLY RESERVED FOR THE ULTIMATE HIGH NET WORTH FOLKS COULD COME DOWN. BEING ABLE TO BORROW AGAINST BITCOIN. NOT THAT MANY PEOPLE THAT HAVE $20,000 WORTH OF BITCOIN THAT COULD BORROW 5000 AGAINST IT. THERE'S A LOT OF PEOPLE WITH $20,000 WORTH OF MICROSOFT STOCK THAT COULD BORROW AGAINST THAT. THAT WILL BRING THE COST DOWN. ACCESS WILL GO WAY UP FOR EVERYBODY.
SCARLETT: MIKE IS THE CEO OF BITCO, AND A REGULAR ON BLOOMBERG CRYPTO AS WELL. CRYPTO WINTER MAY BE OUR NEXT GUEST'S BIG OPPORTUNITY. ARIELLA SIMPSON HAS BEEN THROUGH SEVERAL CRYPTO CYCLES. GREAT OF YOU TO SPEAK WITH US. I GUESS WE START BIG PICTURE, YOU HAVE INVESTED THROUGH SEVERAL CYCLES, NOT UNUSUAL TO SEE CRYPTO TAKE BIG LEGS DOWN AND REBOUND JUST AS STRONGLY LATER ON, WHAT IS DIFFERENT THIS TIME?
ARIEL: ONE OF THE FIRST THINGS THAT STANDS OUT IS THE INTERSECTION OF CRYPTO AND AI THAT IS DEFINITELY TAKING THE WORLD BY STORM. WE ARE AT THE VERY EARLY PHASE OF AN INTERSECTION THERE. WE HAVE OBVIOUSLY AGENTIC AI AGENTS TAKING OVER THE WORLD. A LOT OF THE INTERNET WILL NEED TO BE RESHAPED. IT WASN'T DESIGNED FOR AGENTS. MUCH OF THE INTERNET WAS DESIGNED TO AVOID HAVING AGENTS TAKEOVER. NOW AGENTS ARE A GOOD THING. I SEE A LOT OF OPPORTUNITY AT THAT INTERSECTION, DEFINITELY SOMETHING WE HAVEN'T SEEN BEFORE.
TIM: COULD YOU TALK ABOUT OPPORTUNITIES FOR COMPANIES OR ENTREPRENEURS IN THIS SPACE? IF WE THINK ABOUT THE WAY THE INTERNET WAS DESIGNED, WE DON'T WANT IT TO BE DESIGNED FOR BOX AS YOU WERE SAYING THAT BOTS AS -- BOTS AS YOU WERE SAYING. WHEN YOU THINK ABOUT INVESTING IN COMPANIES, WHAT ARE YOU LOOKING FOR?
ARIANNA: A LOT OF THE STORY CENTERS AROUND STABLECOINS. THEY HAVE TAKEN THE WORLD BY STORM. WE HAD THE PASSING OF THE GENIUS ACT THAT PUSH THEM TO THE FOREFRONT AND CLARIFIED THEIR STANDING AND REALLY DROVE AN INCREDIBLE AMOUNT. IN 2025 THERE WAS ABOUT $33 BILLION OF STABLECOIN VOLUME. RATHER AS A SUBSET, AN ADDITIONAL $350 BILLION OF PAYMENTS VOLUME, IF NOT MORE. WE ARE SEEING STABLECOINS DRIVE A LOT OF ACTIVITY. THAT IS A PRETTY NEW TREND. STABLECOINS ARE AN INTERNET NATIVE FORM OF MONEY. IT IS VERY DIFFICULT TO GIVE AN AGENT YOUR CREDIT CARD AND DISPATCH THEM TO DO THINGS. A PERFECT VEHICLE FOR USERS OR BUSINESSES TO BE ABLE TO SET PARAMETERS SO AGENTS COULD TAKE ACTION ON THEIR BEHALF. I THINK THAT'S AN INCREDIBLY INTERESTING INTERSECTION. WE ARE STARTING TO SEE OPENAI, SOME OF THE BIG COMPANIES THAT ARE STILL VERY TECH FORWARD YOU STABLECOINS AGGRESSIVELY. WE ARE STILL ABSOLUTELY IN THE VERY EARLY INNINGS OF THAT.
SCARLETT: ARE YOU SEEING ANY DISRUPTION FROM THE GEOPOLITICAL ENVIRONMENT WE ARE IN? HAS THAT SLOWED THINGS DOWN OR MADE INVESTORS OR COMPANIES STEP BACK A LITTLE BIT?
ARIANNA: I AM A VENTURE INVESTOR. I AM LOOKING AT MAJOR TECHNOLOGY BREAKTHROUGHS FOR THE LONG HAUL. IN GENERAL I THINK THERE IS A LOT OF ACTIVITY IN THE CRYPTO SECTOR AND THE BROADER TECH MARKET. OBVIOUSLY THE MARKETS HAVE BEEN IMPACTED IN THE SHORT TERM. I DON'T EXPECT THAT TO HAVE ANY LONG-TERM LASTING IMPACT.
TIM: BREAKING NEWS, ARIZONA SENATE FILED CRIMINAL CHARGES AGAINST KALSHI FOR OPERATING AN ILLEGAL GAMBLING BUSINESS. SEVERAL STATES HAVE ACCUSED THE PREDICTION MARKET EXCHANGE OF CIRCUMVENTING GAMBLING LAWS. WE HAVE BEEN TALKING ABOUT PREDICTION MARKETS ON THIS PROGRAM. THERE ARE SOME LIKE POLYMARKET THAT OVERLAP WITH THE BLOCKCHAIN. AS SOMEBODY WHO LOOKS OUT AT EARLY STAGE BUSINESSES, JUST CURIOUS ABOUT YOUR THOUGHTS ON THE REGULATORY PICTURE WHEN IT COMES TO PREDICTION MARKETS AND HOW WE ARE SEEING STATES RESPOND?
ARIANNA: I CAN'T COMMENT ON THE ARIZONA CASE IN PARTICULAR. I COULD SAY BECAUSE SHE HAS GONE TO BATTLE -- KALSHI HAS GONE TO BATTLE WITH THE SEC AND OTHERS. THESE BATTLES NEED TO BE PLAYED OUT AND ANSWERED AT THE STATE AND FEDERAL LEVEL. OVERALL I THINK PREDICTION MARKETS HAVE TAUGHT THE PUBLIC'S ATTENTION AND BECOME INCREDIBLY POPULAR OVER THE LAST COUPLE OF YEARS. PEOPLE LOVE KIND OF PUTTING OUT THEIR OPINION ON WHAT IS GOING TO HAPPEN ACROSS SPORTS, CULTURE, ALL KINDS OF DIFFERENT CATEGORIES. I WOULD EXPECT THAT THE PROPER REGULATORY AUTHORITIES SHOULD FIND A WAY TO MAKE FEES -- OF THESE MARKETS WHICH APPEAL TO CONSUMERS ACCESSIBLE.
SCARLETT: FANTASTIC TO SPEAK WITH YOU. THE FORMER GENERAL PARTNER AT HOROWITZ, WE HOPE SHE COMES BACK SOON.
TIM: MORE NEWS WHEN IT COMES TO M&A, MASTERCARD BUYING STABLECOIN STARTUP BBN K. THAT IS NEXT, THIS IS BLOOMBERG.
SCARLETT: YET ANOTHER EXAMPLE OF A WALL STREET PLAYER INVESTING IN ADDITIONAL ASSETS. MASTERCARD WILL HIRE BVNK FOR UP TO 1.8 BILLION DOLLARS. PAIGE SMITH HAS BEEN COVERING THE STORY AND JOINS US ALONGSIDE -- LET ME START WITH YOU. THERE IS A LOT WE LEARNED ABOUT THIS DEAL BUT THERE'S A LOT WE DON'T KNOW. GIVE US THE BASICS.
PAIGE: ONCE AGAIN IT IS AN INTERESTING MOVE FOR THIS MORE TRADITIONAL FINANCIAL PLAYER TO MOVE INTO THE DIGITAL ASSET SPACE. AS IT PERTAINS TO STABLECOIN TECHNOLOGY. YOU THINK OF VISA AND MASTERCARD STICKING TO THEIR LANE. THEY ARE VERY MUCH TRYING TO POSITION THEMSELVES TO TAKE ADVANTAGE OF THESE DIFFERENT FORMS OF PAYMENTS, WHETHER THEY ARE STABLECOIN, DIGITAL ASSETS ACROSS THE BOARD, THAT'S WHAT THEY ARE TRYING TO DO.
TIM: I'M WONDERING ABOUT HOW STABLECOINS ARE GOING TO AFFECT PAYMENTS. IF WE THINK ABOUT IT FROM THE PERSPECTIVE OF CONSUMERS MAYBE WE DON'T SEE THE TECHNOLOGY. HOW DOES THIS ACTUALLY CHANGE THE GAME?
PAIGE: I WILL SHAMELESSLY PLUG OUR REPORT. ACROSS DIFFERENT PAYMENT VERTICALS WE SEE STABLECOINS COMING UP IN DIFFERENT FORMATS. THE BIGGEST BUMP WE SEE IS ACROSS BROADER COMMERCE. IT IS ANOTHER AREA THAT WE SEE A BIG IMPACT FROM STABLECOINS. WE DON'T SEE MUCH COMING ON WITH MORE CONSUMER PAYMENTS. THEY ECHOED THAT CONCERN. THEY ARE THE OTHER, THAT KIND OF STABLECOINS COMING IN.
SCARLETT: WHY DO YOU THINK MASTERCARD IS DOING THIS DEAL NOW?
PAIGE: STABLECOINS ARE SHIFTING ACROSS THE KEY THINGS THAT ARE DRIVING THAT CHANGE. ESPECIALLY THE AGENTIC COMMERCE COMING INTO PLAY. SECONDLY AND VERY OBVIOUSLY THERE'S A LOT MORE REGULATORY ACROSS THE BOARD ON THIS. THEY ARE BUILDING THESE USE CASES. MASTERCARD DECIDED THE SPEED TO MARKET WITH THE CAPABILITY INTERNALLY, THE COMPLIANCE TAG, THE CONNECTIVITY THAT MASTERCARD WOULD'VE TAKEN LONGER IF IT WAS BY ITSELF. IT WAS BASICALLY MASTERCARD BUYING INFRASTRUCTURE AND PLUG AND PLAY.
TIM: YOU POINTED OUT IN THE PIECE YOU WROTE THIS MORNING THAT IT WAS NOT JUST MASTERCARD. TALK TO US ABOUT THE DYNAMICS THERE.
PAIGE: IN TERMS OF THE DYNAMICS AND WHY MASTERCARD IS GOING AFTER THIS, IT HAS CERTAINLY BEEN AN ACQUISITION TARGET. COINBASE WAS ACTUALLY ACQUIRED FOR AROUND $2 BILLION AS WELL. I DO THINK IT'S IMPORTANT TO CIRCLE BACK TO THE IDEA THAT MASTERCARD REALLY IS NOT AIMING TO DISRUPT CONSUMER PAYMENTS. IT IS VERY MUCH MORE FOCUSED ON PAYMENTS, REAL-TIME FLOWS, CROSS-BORDER PAYMENTS. THAT IS REALLY WHERE THE BREAD AND BUTTER OF STABLECOIN TECHNOLOGY IS.
SCARLETT: THAT PRICE TAG INCLUDES $300 MILLION IN CONTINGENT PAYMENTS AS WELL.
TIM: NOT BAD FOR A COMPANY THAT WAS FOUNDED IN 2021.
SCARLETT: THIS IS SOMETHING WE WILL SEE MORE OF. THESE TRADITIONAL PAYMENT MODELS LOOKING TO ROLL OUT THERE DIGITAL INFRASTRUCTURE.
TIM: THAT WILL DO IT FOR BLOOMBERG CRYPTO.
SCARLETT: JOIN US AGAIN NEXT WEEK, SAME TIME. THIS IS BLOOMBERG.