Hello, and welcome to What Goes Up a weekly markets podcast. My name is Mike Reagan. I'm a senior editor at Bloomberg and I'm Aldana Higher Across Acid reporter at Bloomberg. And this week on the show, well, we didn't see this coming, but turned out to be the year when the crazy things we normally talked about at the end of the podcast turned into the things we talked about during the serious part of the show too, with crypto executives being called before Congress, tokens that started out as jokes skyrocketing to tens of billions of dollars in value, n f t s of board apes selling for millions of dollars, coin based, going public, you name it. It was hard to avoid the crypto headlines this year and wonder what it all means going forward. We're gonna talk to the woman leading Bloomberg's coverage of it all about what a wild year was and what's a lookout for in two And speaking of crazy and wild things, are operators are standing by to take your crazy things. So if anybody saw something that they wanted to flag or wanted to let us know about, you can call us on the crazy things hotline. That's six four six three two four three four zero. Leave us a voicemail. Maybe we'll play it on the show. And as always, you can always tweet at us as well. But first I want to bring in Stacy Marie Ishmael. She's the managing editor for Crypto at Bloomberg. Welcome to the show. Hi, thanks so much for having me. Stacy also my neighbor in the office. Although I'm getting kicked out of that row about kicked out. They're moving me closer to the men's room, which for a guy my agees is a good it's an upgrade, So I'll take let's Stacy, I just want you to tell the listeners a little bit about yourself. I mean, how does such a nice, smart, level headed woman, what career path takes her into this crazy world of crypto that you found yourself in. Give us sort of your your your resume in a nutshell here. Sure. So, I'm a person who has bounced between technology and media for a long long time, and my very first job in journalism as a kind of a baby reporter, was covering structured finance credit to false swaps and derivatives from two thousands sticks to two thousand nine, which you know, it was an interesting time for a baby reporter. While yeah, it was, you know, it's what you do. Um you sort of get you get thrown into the deep end. You start writing these stories about market in disease of credit to false swaps that seven people read, and then for lots of different subprime and housing related reasons six months later that everybody in the whole country in the world are reading. So, you know, I come at finance from this perspective of what goes up must go down, But sometimes it goes sideways, and you don't always understand what the structural transmission mechanisms might be. Something that looks totally un correlated actually turns out to be a hundred percent correlated with something else. And that's a perspective that I found really helpful in in crypto, where you have to both take it I suppose seriously but not literally when when you're thinking about these things. And I also have you know, a technology background of workers technology companies. I have more kind of technical skills. I know, I know enough programming and codes be dangerous, which has also come in really handy from the perspective of evaluating on understanding some of the white papers in crypto about like why you should trust this OME token, or just on understanding how disruptive some of the conversations that we're having about the underpinnings of blockchain can be for the rest of the sector. So just to start out really broadly speaking, I know you wrote an article for Bloomberg recently. It's titled Wall Street Finally Learned it Can't ignore Crypto and n f T S. So I was hoping we could start out with you just sort of talking about the year in crypto. It seems like the big theme was street acceptance. We heard that over and udging or otherwise, right exactly, So maybe can you later lay that out for us and what some of those factors were and why that is important for the crypto community. Three three good questions at once. Okay, So I'll start with what what happened? Right, which is if you think back to you know, millions of years ago in January one, when so much of the conversation about crypto was tied up in scams, fraud and ransomware, right, if you were if you were talking about bitcoin, you were talking about how somebody lost all of this and you know, I think that that really had set been the tone and set the tone for all but the truest of believers for quite a long time. I think there are a lot of media companies, Bloomberg included, that had much more sophisticated coverage of crypto than just it's all scams all the time. But you know, if you were to ask a person on the street, odds are that if they had heard about it, they either thought it was totally sketchy or they also were like Team by Gold, you know, high, high guns and in basement kind of kind of stereotype. And then a few things happened all at once, right, which is that you had the beginnings of fairly significant price appreciation because coin base went public and coin based being this major major exchange and hopefully helped well, I think the people who were backing it, who helped hope that it would help institutionalize the idea of this is something that you can take seriously. Look it's it's serious enough for this to be part of the public markets. And that was in kind of March April, those conversations were happening, and you you started to see that first run up in prices. I would also say that right around that time, when some of the buzz around meme stocks was kind of hitting its peak, there was a lot of overlap between people who were spending a lot of time on Reddit forums talking about its etcetera. With people who are spending a lot of time in Discord talking about different crypto tokens. And I have what I sometimes call my unified unified theory of crypto, which is that it's roughly the same groups of folks who are interested in sports, betting, poker, video games, n f t S, Wall Street Bets, Discord, Reddit, Twitch, and YouTube. And not everybody is part of every single one of those communities, but chances are that if you belong to any one of them, you are adjacent to people who belong to the others. And I think there was a lot of interesting overlap and conversation between some of the folks who were like die hard on meme stocks and you know, trading those in robin hood with people who were like, hey, have you heard about the theory um maybe you should, maybe you should add that to your portfolio. And this is kind of what I mean about when you you have to say crypto seriously but not always literally, which is like you you wouldn't look back and say, Okay, Wall Street now has to take crypto seriously because of Wall Street bets. But you could also say one of the reasons that Wall Street is taking crypto seriously is because another thing that was driving material performance and markets from the equities perspective, there were similar trends driving material performance in crypto, you know, a totally different asset class. And then, of course, I think one of the biggest things that happened, and they happened within not too far apart from each other, is al Salvador was like we're all in on bitcoin, and China was like bitcoing completely legal, and you had these totally different approaches to the asset class that had you know, some interesting ripple effects, right, which is one folks were like, well, if this is serious enough for an entire country to ban it, and it's also seriously enough for an entire country to go all in on on bitcoin, perhaps we should pay more attention. Right. So, whether you were pro or con the fact that this asset class had is into sovereign attention as it were, was I think another marker for folks that Okay, they can't just be like la la la, I don't know what's going on here. They really need to engage with it in a serious way. So if your portfolio included emerging market exposure of any kind, or your portfolio included TESLA, or it included micro strategy, you know you were suddenly having to be way more up to speed on Bitcoin than you were maybe comfortable with or even aware of. Right, so all of all of this is happening in a very short amount of time. You know, we we kind of go from like, ah, this is all bad and ran somewhere to like WHOA, I need to I need to understand this better. And then you have this incredible run up in prices. Well, you know, at the time of recording, like crypto is obviously nowhere near the old time highs that we hit in November. You know, we're about thirties down from the peak depending on the day, but we are still so far above you know, the when you could buy a bitcoin for like eight hundred dollars that it's almost a different universe. And I think that when you when you consider as Mike question in the intro, you have n f T selling for millions of dollars, you have single tokens experiencing three thousand percent appreciation in a given window. You have bitcoin trading above sixty dollars. If you are a serious person in financial markets, there is too much money on the table, whatever your personal opinion of the asset class might be, to ignore that. Yeah, absolutely, I love your unifying theory there, you know, I pictured is like a big ven diagram with all these little bubbles, but all of them sort of dip into the crypto space. Uh, to some I know personally, I know a lot of I have some friends who were online poker players who you know, when there was a crackdown on that all of a sudden, the only way you could really bet on online poker was was with crypto, you know. So it's it's interesting the different sort of you avenues that you can get sucked into it. Um. But Stacy, I wanted to talk sort of from the journalistic perspective because along with the growth of crypto, there's been this whole new growth of media companies covering crypto, and you know, whatever that happens there, You know, these publications have some sort of vested interest in the space, and to me, there's a risk of sort of coverage that that borders on cheerleading, you know, and I don't want to use cheerleading in a derogatory term, Bildona. I'm the father of two cheerleaders. I actually I could be pressed into service. Is like a backspot in a stunt group if needed. So I I all all the respect it is for if we if you ever want to do a stunt at work, let you know, you know all the respect in the world for cheerleading. Um. But you know from that notion of and I think I know the answer. I think Plato knows the answer. But to listeners out there who are used to reading a different type of coverage of crypto, how how do you approach Bloomberg's coverage? And how how my it be different than say and I'm la going to name any names, but a website that obviously has has direct skin in the game of the crypto world more so than we would. Yeah, I mean this is this is the perpetual question of trade magazines, right in the sense of and you know, for a place where if you're direct owner is incentivized because they participate in the crypto ecosystem to have all prices go up that can present interesting editorial challenges and compromises. But it's I think, as a as a universe of media, it's not something we're totally unfamiliar with. What I would say that I'm trying to bring to Bloomberg is, in terms of crypto coverage, is a phrase that I use a lot, which is rigorous skepticism, And that is to say, I'm not actually interested in being cynical or nihilistic about the asset class. I'm not interested in starting from a place of well, all of this is, you know, potentially fraudulent, Like I don't think that's journalistically useful, and I also think it's untrue, right, Like is there an above average number of sketchiness happening at all times? Yeah? Sure, but it's it's not that's not the entirety of the universe. Similarly, I'm not like a starry eyed believer, who will, you know, take for granted any claim that a aggressively well funded crypto ceo makes about this is the pathway to wealth redistribution. Like, sure, how, give me, give me evidence, give me examples, you know, like, show me materially what this means in practice. Um, And I think that's that's where I would like all of our coverage to live right that we are appropriately curious and we're appropriately questioning, but we are sufficiently open minded that we don't miss interesting stories. So, speaking of some of the conversations we've been having internally, know we're we've been working on a lot of stories that are you know, looking at the year and review for crypto and for bitcoin and for all these other offshoots, and so I'm wondering, you know, I've been asking a lot of people like what will it take to continue to see the market mature? And I'm wondering how you're thinking about that. I think any markets in which you have individual tokens or groups of tokens that can go up or down by two percent in one day is not mature yet. And I think that when you're in a situation in which individual CEOs tweeting about their puppies can cause entirely new classes of things to spring into existence, I would also say it's not you know, fully baked from from that kind of perspective, and so I look at a couple of different things. If you think about, you know, some traditional markers, like what's the depth of the liquidity, right, what's the what's the sort of proportion of pure momentum driven speculation to fundamental analysis and investment. Like how many people are huddling, as it were, not merely because they think that if they outlast everybody else there will be gains for them, but because they're making a more fundamental bet on something else. I look at the frankly, the quality of the executive bench of a lot of these crypto companies, Like, you know, what is what is the experience of the folks involved, What are their backgrounds? How do they spend a lot of time on Twitter raging against the machine or are they doing work? You know, it's it's things that you tend to from a more traditional perspective. You see a lot of activity happening in crypto that makes you think that there is a degree of un seriousness which can be funny but is also troubling. Um I'll give an example. You know, just this year, we have seen a tremendous number of outages and downtime across you know, even some of the biggest players in the space. And it'll be while you can't log in for x amount of time, or you can't withdraw or you can't liquidate this particular position, or you've been locked out of your accounts for X number of days. And if you are a person who's used to sort of technology, and perhaps some of our listeners might remember when if you use Twitter, you would see the fail whale, like every five minutes, it's like, oh Twitter is down again, and it's like that that can be funny for a while, but then you start to have people who are like, hang on a minute, this is my primary bank account, or I have positions that at risk of being liquidated here because the market is moving against me and I can't log into my account to adjust an adapt accordingly, you start to move into one actually needing customer service, like actually needing to be able to service and meet the needs of your customers who might be facing some kind of difficulty and to way better reliability and uptime. Right, It's like you get past the point of trillions of dollars where joking around on your social platforms while people are locked out of their accounts goes from like funny, ha ha, we're all in this together to just unprofessional and inappropriate. You know, Stacey, I want to sort of unpack something you said earlier on there in that answer, and um, it really it's to an interesting quote I saw recently, and I wish I had written down who who tweeted it or said it, but it was it was basically the notion that defied the centralized finance is a solution in search of a problem. And you know, people kind of been saying that about crypto all all along. But I do think you know, it's it's ah, you know something that is a criticism of DeFi. That's that's worth talking about, you know, you know, the real believers and DeFi will tell you, well, it's you know, it's opens the doors to the unbanked and to the populations that have been sort of neglected by traditional financial services. Is there validity to that? I mean, is that sort of just the nice bow you put on top of a real gambler's market to make it look like, you know, it's a virtue signal? It a little bit, But how do you think of that, you know, the whole world of the centralized finance and you know the ability to to solve real world problems that people might be having with the traditional financial system. Sure, if I put my curious and also skeptical hat on for a second. I think back to a couple of things. I think back to when people were like why do we need email? Fox machines are great and then or or like this internet thing will never take off, or video chatting never gonna need that we were in person constantly, right, Like there's always a moment when you are standing at a technological fork in the road where whatever you are doing right now seems still fine, adequate, appropriate, well suited to whatever. The problem is that anything that isn't that seems ridiculous, right, And I think there are certain there is a risk in in some of the discussion of Defy that is that idea of what we have now is fine, Like what you're talking about is overly complicated and doesn't make any sense and it's never gonna work, right, And now we say this while recording on zoom in in in full video for something organized by email that we will publish through the Internet. So I think there's some of that, But I also think that there are insufficiently compelling arguments for some of the valuations and some of the claims that we see in Defy right, Because I think it's like you could argue that the the mare fact of being able to offer twelve a p y in a lowish interest rates environment is like useful for people who are looking for yield. Right, That's that's certainly a problem that's being solved through some applications of Defy. You could argue that the idea of smart contract is kind of genius actually, that you know, you have this notion of within an agreed set of parameters and variables, you can automate things right now that are otherwise very manual. Any lawyers listening to this like hatesmart contracts because it's so potentially ultimating them out of jobs. But you know, there's like lots of interesting stuff out there, But there isn't, you know, to use a phrase from our colleague Olga Crief, there isn't a killer app for defy yet other than like, here's like yield farming with super attractive interest rates, or here's a handful of particularly technical or you know, niche uses that some people find really helpful, but for the vast majority, their eyes glaze over when you try to explain to them how it works. I'm glad you brought up the fax machine. I'm so old all Donna. When I was a baby reporter, the newspaper had a fax machine, but like the police department didn't, and the funeral homes didn't, So you know, I'd have to to the police station take notes on all the police reports. You know, the funeral home would call and and read me in about thirty seconds, the super long o bit that that I'd have to take down, and you know, so uh to me, the facts machine was revolutionary when when those places starting to get I can see where Paul Krugman was coming from when he said, you know, the internet is is just going to be as influential as the facts machine. I've got it to be pretty influential. I'm imagining baby Mike Reagan reporter. I'll bring by the fax machine here, browner hair, you know, otherwise not the same Stacy. I also wanted to ask you, speaking of all things defy, there's also this trend of regular, you know, old school traditional financial products, things like e t f s maybe also moving into the DeFi space, or some version of it moving into the DeFi space. I'm wondering if you're surprised by sort of that whole world recreating itself in the crypto world not at all. Um, you know, sort me say this because as we said, we're basically deskmates where I'm like everything old is new and crypto, which is you know, the idea that in whatever you have a starry eyed industry that's like, we're going to change the world, but first we're going to rebuild everything we've left behind. We're gonna make them better, but we're going to start from recreating this infrastructure. It happens all the time because inventing things that are genuinely new and have never existed before is you know, super hard actually, um, And what I what I also think is that there are parts of crypto, there are parts of defy that let you do certain things more efficiently potentially or you know, with less friction, even if the underlyings are very similar. Right. So you know, we've we've kind of looked at different things around what would it mean if remittances didn't take days on average but instead took hours and you could initiate them from WhatsApp Right, You're still doing the same thing. You're moving money across borders, but the cost of moving that money and the convenience of moving that money is like transformational in in its distinctiveness. And so I don't think that the that recreating old things in a in a with a new code of paint is necessarily a bad thing. And it's often helpful to help skeptics migrate along with you because somebody's like, oh, I understand E T S, or I understand tokenization, or understand fractional shares, and so I have now a useful mental model to approach something that I couldn't make head or tail of before. As they said, I wanted to get into the n f T market a little bit. You know, it's fascinating me because NFC has really started out as sort of this, you know, it seemed to come from the artistic community more than anything else, and kind of the the outsider community. And there's obviously, you know, uh, sort of an appeal and and uh a natural nous, a sort of I don't know if it's it's something to feel good about. I feel like, but then, you know, every day I come in now and there's some corporation or some celebrity in my inbox talking about a new corporate sponsored n f T or some celebrity getting involved in it. It seems to me to kind of cancel out that sort of grassroots artist end of it. You know, is there attention there? Do you think? And you know, I know it's impossible to say which way it goes, but does the sort of corporate you know, intrusion on the n f T market kind of kind of ruin you know, the fun on the arts side of it. This is the absolute punk rocker in you. It's like down down with the man him, absolutely, and so I mean it. I'll say a couple of things about that. One is, when people think about n f T s right now, they often will have a visual in mind, because you know, the thing's selling for dollars seventy million dollars. Are visual representations that are akin to or in some cases are art, right, So I don't necessarily consider an ape smoking a cigarette high art, but it is it is highly visual. And then there are some pretty cool and interesting experiments you know, from like folks like everybody, from people to banks see that are much more in that like fine art with a digital perspective, um kind of persuasion. But but the visual is not what defines the n f T right, What defines the idea of the of an n f T is this idea of uniqueness and that you can only have one, not because the thing itself is not replicable, but because there is a one to one ownership claim. And so I do think that right now, art is where n f t s have like captured the popular imagination, and there is some fun outsider energy just as much as there is you know, massive corporations like a MC and Marvel and others being like, ha ha, we can make more money on this. Here's a spider Man n f T for you. But I also think n f T s are like massively under imagined in their ultimate potential right because it's like you could represent anything with an n f T. It's it's it's a container for ownership. And I think when you know, it could be drawings, it could be music. I um, I was reading a story that an unreleased Whitney Houston track was just sold as an n f T. Right, It's like it is a container that represents authenticity. And I am looking forward to folks putting more interesting things in those containers over time. And I'm also looking for there to be kind of a shakeout. I mean, you know, my you and me are probably old enough to remember when like A O L was a thing. There you go and in addition to all of the unused cd s with an hour of A L access that so many of us connected over the years, brands would like claim their A O L identity right and they were like, we have to set up shop on a O L. And then it was like, well, we have to have our own dot com presence, and it's like we have to have our own Facebook page, we have to have our own Twitter handle. There's always a digital brand rush to make sure that one they have some control over their intellectual property on whatever the hot new thing is, and to that if there's any money to be made or any audience engagement to be generated, that they don't miss out on it. And then there's a shakeout right where the brands who understand how to like interact on that platform survive and the ones who don't don't. So I I it's a great point about sort of the potential of of what an n f T can be. I always bring up the notion of the z racing, you know, based digital thoroughbred horses that can race each other and can breed and you know, sort of recreating the whole horse racing industry in n f T. Whenever I talk about it to like, I won't say it used the word degenerate, but a gambling enthusiast friend of mine there. You know, they may roll their eyes at the notion of n f T S, but then you mentioned that and then explained, right, but horse racing Okay, now this is this changes everything. Yeah. I want to give a shout out to my in laws who just last year got rid of their A O L dial up internet. Wow. I know, I know they've been paying all these years. I think it was like a monthly fee. So and there are the listeners of the podcast, So shout out to the in laws. Hello, shout out. But just to wrap everything up, obviously a big through line here is that there were all these new people who entered the market for whatever reason, as you laid out at the start out of the show, and I know we are constantly thinking about, just as we are with the stock market, thinking about whether or not these new investors are going to stick around. I know for a while the idea was that as economies everywhere start to reopen, that people will become less interested. There won't be as much stimulus, etcetera, etcetera. So do you think that this huge new wave of investors is here to stay. I think every generation looks for a place to put their money. And I also think that it's never been true that investing is a solitary act, because I've certainly read a lot of coverage that is like, oh, you know, they're just saying that it's about community, but it's actually just about money. Like yeah, but you know, fund managers in the mad Men era, we're all trying to impress their smoking buddies with like whatever, whatever their picks were. That there's always been an element of social approval to portfolio management, even when new approval is the rejection of the status clue, right, you want to be the contrarian, you want to be the bear in a bowl market. And so I think when people underestimate the social and community elements of crypto, they miss a very large part of the story because unlike you know, the previous times when your social universe will like your fellow men at the country club, because let's be clear, there are mostly no woman there. Now it's the five thousand people in the discord with you, right, and they can be all over the world, and they're going to come at things from different places, and that is you know, discord is it's a big chat for him. It's like slack, it's like a well, a messenger, but it's a place where people are communicating, and it's it's built into how we live our lives. And I don't think that communication is going to go away. And I don't think the expectation of I'm going to ask perfect strangers what gotchi? They're gonna buy U? I don't think that's going away either. And so even if we see a major shakeout, I mean, like we are down again from the high um, all of this money still needs places to go and folks. So yeah, sure some folks will reallocate them. They be like I can't handle this volatility and buy some bonds. But I don't think it's going to disappear just because some people have moved on to the next thing. Like there are signs, you know, even with what I said about the relative immaturity of the asset class, there are absolutely signs of institutionalization. Right, you mentioned e t s. Right, there are so many more ways to get exposure to something that is still offering really impressive returns and yields compared with you know, lots of other things out there. All it's basically before we get to our crazy things of the year, not just the week. I think we've got to do over the year this time, just briefly. What so, where do you see the whole plot line going for crypto? And you know, both the regulatory front and just the the space itself, you know what, I know, it's impossible. It's such a fast moving space to try to predict what I feel like if I could answer that question, i'd be I'd be a hedge fund. Fair enough, fair enough, you know, the journalist. But I do think the biggest open question in crypto is what a regulator is going to do. You know, I don't think it's going to be an all or nothing. It's all all in in the in Salvador way or all against in the China way. I think there's and I actually think that is much harder in some ways, because it means if you're interested in this space, you have to become an expert on the regulatory regimes of like fifty different governments and you know, an equal number of central banks, but the amounts of uncertainty over whether just in state by state in the US, for example, you are allowed to like access meta mask or some other kind of wallets is considerable, and that is certainly weighing on consumer access because institutional investors will always find ways around um whatever regulations are. And then I would say the second thing is we'll probably start to see some price normalization across various types of asset classes. And I don't think the price normalization necessarily means we're going to decline in another for I think there's going to be more of a reliable median for certain types of things. You know, like the the NFC market right now is such a barbell. It's like hundreds of millions of dollars or two. It's like and there's there's you know, significant concentration on the two end, and a handful of examples on the hundreds of millions of dollars, and and that's not super sustainable or attractive or interesting, right Like it's it's hard to become a mass market product if you either offer very little or you offer a ton, but only if you have significance capital too to guess into that space. And so I think we'll probably start to see a little bit more of a shake out there, just so things kind of settled to a place that make more intuitive sense to folks. Tiden up your straight jackets. It's time for the craziest things we saw in markets this week. Stand clear of the craziest things we saw this year. What's the craziest crypto or other story in markets he saw this year? Well, I've been thinking a lot about this because obviously I covered a lot of them, and it was really hard to make up my mind. But something that I read recently is sticking out, and Stacy a little bit already was alluding to this. So Stacy earlier had said at the start of the year it was all scams all the time, and so and so lost their crypto keys, etcetera, etcetera. And there actually is this amazing story from the New Yorker called half a billion in bitcoin lost in the dump. So my second shout out today that one goes out to the New Yorker. It's an amazing story of this person who claims to be the fifth person to have been mining bitcoin like way way long ago, and he unfortunately lost his hard drive that has all the information on it. So he's trying so hard to literally dig it out from a dump in England. Is that the guy he's like in Wales? Yeah? Right, I remember reading about that. Yeah. And he's trying to the UK, trying to pay off the operator to let him in with the metal. I mean, is finding it though, But it's something like a few hund million dollars worth five it's I think it's five hundred million dollars right, yeah, So, but it's amazing he has all these blueprints for how he's going to dig it up little by little and have it go through metal detectors and all these people who are going to be working on it. Who's going to get a cut and you just you you feel his pain. But at the same time, I love the idea of it being about, you know, him actually just losing a little computer a piece, so, but an actual physical thing that he lost. If I were him, my first line of questioning would be, like, did any employees of the dump retire early? I I want to know who they It's a really good point. That's that's who I That would my investigation would start there. But Stacy, how about you? I don't suppose you saw anything crazy? And crypto markets show every everything is super chill all the time. Um, in October, if there were a bunch of headlines about the fact that, like, whoa, this crypto punk, which is a collection of n f T has just sold for five hundred million dollars. What's happening? Mind is blown And then we're like, wait a minute, the person who sold and bought the crypto punk is of the same it was. You know, it was wastrating, right, and like the person was doing it for the lulls whatever. But it was enabled by a kind of a smart contract, a flash loan, right, which is the idea that you could just in the space of seconds, like the time it takes to perform that transaction on the blockchain, put something up for sale, borrow a bunch of money to buy it back, and then repay that money in the process of selling it back to yourself. Like this just with computer code was fascinating to me because I thought, okay, one, here's the world for which regulates is a completely unprepared and it's just sort of another example of you know, there will be some folks who always have alpha because they understand different ways to end run the system, right and you know, you could argue that wash trading is kind of victim lest crime. The I R S might have perspectives on that, the mere fact that the cost of that transaction was minimal to this person because like flash loans are generally on collateralized, like you don't have to put up a bunch of money to borrow it. Like what what are the if you think expansively about what that might mean for more interesting transactions. It was a little bit mind blowing that. Yeah, and it goes back to your point of everything old is new again. I think I was supposed to write a story about that night. Prodecy we do about it? Then that you were busy is another year, the new opportunity for more balls to drop. So we're recording this a couple of weeks early here, right in the middle of December, and mine was just the really just a couple of nights ago, Stacy, when we're sitting there and you all of a sudden said, the price of bitcoin is up about eight million percent or something. I forget the exact number, but some data era happened I guess somewhere between coin base and coin market cap, where prices just went bananas. You know, I don't even know what the top tick of bitcoin was and that that error, but it was. It was something in the hundreds of millions, I think, maybe even in the billions, and even shiba you know. I think at one point it was worth twenty nine thousand dollars uh per shiba, you know, which is worth way below it a fraction of a penny. But it does, you know, it goes back to that notion of where how the industry needs to mature and and where it's going. I mean, to me, what was amazing is people just left it off. You know, people were doing screenshots of their accounts with billions of trillionaire a trillionaire and a hundred billion dollars in my coin basis. I mean, in a way, it makes me think, well, the users kind of have matured enough to know an error when they see it. So maybe maybe that's part of it, is the user base. Now it's not just sort of the plumbing of the market and everything, but the users themselves kind of know when they say it, you know what I mean. I think I think the reason that that was okay was that everything went up. That's true, I mean, because you know, imagine let's say everything had massively gone down and that had triggered like liquidations for instance, or you know, or like blew through someone's stop orders. We might have been having a very different conversation yesterday. Then that would not be as funny, would not have been as a funny joke. Well, I think instinctively, you know, that's kind of what you worry about. You could you could see theoretically, you know, something happening to cause a massive you know, dropping bitcoin to see a massive million, ten million percent rally would seem, you know, on its face, less pausible. I guess I know. With that said, I don't know. I it's hard gonna be hard to top the crazy things of words. I hopefully I'm chexing it. We have. We've got plenty of more crazy stories to write next year. What do you think filled out of Yeah, for sure, no way that it's not going to be crazy again. Stacyvil that is most excited about bitcoin and crypto being seven because that means she gets to work on the weekends, like she she does not have to like figure out something like absolutely not. My eyes go wide every time somebody brings it up. There they go. They did just go eyes. I think the laser beams shot out of her eyes on that one too. Anyway, I think that's all the time we have it. Stacy. Is so great to have you on the show, and we're definitely gonna bring you back a few times to make sense of all this because it's here to stay like it or not, it's here today exactly. Thank you Stacy a pleasure What Goes Up. We'll be back next week. Until then, you can find us on the Bloomberg Terminal website and app or wherever you get your podcasts. We'd love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter, follow me at Reaganonymous. Will Dotta Hirich is that Will Dota Hirich. You can also follow Bloomberg Podcasts at podcast and Thank you to Charlie Pellett of Bloomberg Radio. What Goes Up is produced by Laura Carlson. The head of Bloomberg Podcast is Francesco Levy. Thanks for listening, See you next time. Four

Hello, and welcome to What Goes Up a weekly markets podcast. My name is Mike Reagan. I'm a senior editor at Bloomberg and I'm Aldana Higher Across Acid reporter at Bloomberg. And this week on the show, well, we didn't see this coming, but turned out to be the year when the crazy things we normally talked about at the end of the podcast turned into the things we talked about during the serious part of the show too, with crypto executives being called before Congress, tokens that started out as jokes skyrocketing to tens of billions of dollars in value, n f t s of board apes selling for millions of dollars, coin based, going public, you name it. It was hard to avoid the crypto headlines this year and wonder what it all means going forward. We're gonna talk to the woman leading Bloomberg's coverage of it all about what a wild year was and what's a lookout for in two And speaking of crazy and wild things, are operators are standing by to take your crazy things. So if anybody saw something that they wanted to flag or wanted to let us know about, you can call us on the crazy things hotline. That's six four six three two four three four zero. Leave us a voicemail. Maybe we'll play it on the show. And as always, you can always tweet at us as well. But first I want to bring in Stacy Marie Ishmael. She's the managing editor for Crypto at Bloomberg. Welcome to the show. Hi, thanks so much for having me. Stacy also my neighbor in the office. Although I'm getting kicked out of that row about kicked out. They're moving me closer to the men's room, which for a guy my agees is a good it's an upgrade, So I'll take let's Stacy, I just want you to tell the listeners a little bit about yourself. I mean, how does such a nice, smart, level headed woman, what career path takes her into this crazy world of crypto that you found yourself in. Give us sort of your your your resume in a nutshell here. Sure. So, I'm a person who has bounced between technology and media for a long long time, and my very first job in journalism as a kind of a baby reporter, was covering structured finance credit to false swaps and derivatives from two thousands sticks to two thousand nine, which you know, it was an interesting time for a baby reporter. While yeah, it was, you know, it's what you do. Um you sort of get you get thrown into the deep end. You start writing these stories about market in disease of credit to false swaps that seven people read, and then for lots of different subprime and housing related reasons six months later that everybody in the whole country in the world are reading. So, you know, I come at finance from this perspective of what goes up must go down, But sometimes it goes sideways, and you don't always understand what the structural transmission mechanisms might be. Something that looks totally un correlated actually turns out to be a hundred percent correlated with something else. And that's a perspective that I found really helpful in in crypto, where you have to both take it I suppose seriously but not literally when when you're thinking about these things. And I also have you know, a technology background of workers technology companies. I have more kind of technical skills. I know, I know enough programming and codes be dangerous, which has also come in really handy from the perspective of evaluating on understanding some of the white papers in crypto about like why you should trust this OME token, or just on understanding how disruptive some of the conversations that we're having about the underpinnings of blockchain can be for the rest of the sector. So just to start out really broadly speaking, I know you wrote an article for Bloomberg recently. It's titled Wall Street Finally Learned it Can't ignore Crypto and n f T S. So I was hoping we could start out with you just sort of talking about the year in crypto. It seems like the big theme was street acceptance. We heard that over and udging or otherwise, right exactly, So maybe can you later lay that out for us and what some of those factors were and why that is important for the crypto community. Three three good questions at once. Okay, So I'll start with what what happened? Right, which is if you think back to you know, millions of years ago in January one, when so much of the conversation about crypto was tied up in scams, fraud and ransomware, right, if you were if you were talking about bitcoin, you were talking about how somebody lost all of this and you know, I think that that really had set been the tone and set the tone for all but the truest of believers for quite a long time. I think there are a lot of media companies, Bloomberg included, that had much more sophisticated coverage of crypto than just it's all scams all the time. But you know, if you were to ask a person on the street, odds are that if they had heard about it, they either thought it was totally sketchy or they also were like Team by Gold, you know, high, high guns and in basement kind of kind of stereotype. And then a few things happened all at once, right, which is that you had the beginnings of fairly significant price appreciation because coin base went public and coin based being this major major exchange and hopefully helped well, I think the people who were backing it, who helped hope that it would help institutionalize the idea of this is something that you can take seriously. Look it's it's serious enough for this to be part of the public markets. And that was in kind of March April, those conversations were happening, and you you started to see that first run up in prices. I would also say that right around that time, when some of the buzz around meme stocks was kind of hitting its peak, there was a lot of overlap between people who were spending a lot of time on Reddit forums talking about its etcetera. With people who are spending a lot of time in Discord talking about different crypto tokens. And I have what I sometimes call my unified unified theory of crypto, which is that it's roughly the same groups of folks who are interested in sports, betting, poker, video games, n f t S, Wall Street Bets, Discord, Reddit, Twitch, and YouTube. And not everybody is part of every single one of those communities, but chances are that if you belong to any one of them, you are adjacent to people who belong to the others. And I think there was a lot of interesting overlap and conversation between some of the folks who were like die hard on meme stocks and you know, trading those in robin hood with people who were like, hey, have you heard about the theory um maybe you should, maybe you should add that to your portfolio. And this is kind of what I mean about when you you have to say crypto seriously but not always literally, which is like you you wouldn't look back and say, Okay, Wall Street now has to take crypto seriously because of Wall Street bets. But you could also say one of the reasons that Wall Street is taking crypto seriously is because another thing that was driving material performance and markets from the equities perspective, there were similar trends driving material performance in crypto, you know, a totally different asset class. And then, of course, I think one of the biggest things that happened, and they happened within not too far apart from each other, is al Salvador was like we're all in on bitcoin, and China was like bitcoing completely legal, and you had these totally different approaches to the asset class that had you know, some interesting ripple effects, right, which is one folks were like, well, if this is serious enough for an entire country to ban it, and it's also seriously enough for an entire country to go all in on on bitcoin, perhaps we should pay more attention. Right. So, whether you were pro or con the fact that this asset class had is into sovereign attention as it were, was I think another marker for folks that Okay, they can't just be like la la la, I don't know what's going on here. They really need to engage with it in a serious way. So if your portfolio included emerging market exposure of any kind, or your portfolio included TESLA, or it included micro strategy, you know you were suddenly having to be way more up to speed on Bitcoin than you were maybe comfortable with or even aware of. Right, so all of all of this is happening in a very short amount of time. You know, we we kind of go from like, ah, this is all bad and ran somewhere to like WHOA, I need to I need to understand this better. And then you have this incredible run up in prices. Well, you know, at the time of recording, like crypto is obviously nowhere near the old time highs that we hit in November. You know, we're about thirties down from the peak depending on the day, but we are still so far above you know, the when you could buy a bitcoin for like eight hundred dollars that it's almost a different universe. And I think that when you when you consider as Mike question in the intro, you have n f T selling for millions of dollars, you have single tokens experiencing three thousand percent appreciation in a given window. You have bitcoin trading above sixty dollars. If you are a serious person in financial markets, there is too much money on the table, whatever your personal opinion of the asset class might be, to ignore that. Yeah, absolutely, I love your unifying theory there, you know, I pictured is like a big ven diagram with all these little bubbles, but all of them sort of dip into the crypto space. Uh, to some I know personally, I know a lot of I have some friends who were online poker players who you know, when there was a crackdown on that all of a sudden, the only way you could really bet on online poker was was with crypto, you know. So it's it's interesting the different sort of you avenues that you can get sucked into it. Um. But Stacy, I wanted to talk sort of from the journalistic perspective because along with the growth of crypto, there's been this whole new growth of media companies covering crypto, and you know, whatever that happens there, You know, these publications have some sort of vested interest in the space, and to me, there's a risk of sort of coverage that that borders on cheerleading, you know, and I don't want to use cheerleading in a derogatory term, Bildona. I'm the father of two cheerleaders. I actually I could be pressed into service. Is like a backspot in a stunt group if needed. So I I all all the respect it is for if we if you ever want to do a stunt at work, let you know, you know all the respect in the world for cheerleading. Um. But you know from that notion of and I think I know the answer. I think Plato knows the answer. But to listeners out there who are used to reading a different type of coverage of crypto, how how do you approach Bloomberg's coverage? And how how my it be different than say and I'm la going to name any names, but a website that obviously has has direct skin in the game of the crypto world more so than we would. Yeah, I mean this is this is the perpetual question of trade magazines, right in the sense of and you know, for a place where if you're direct owner is incentivized because they participate in the crypto ecosystem to have all prices go up that can present interesting editorial challenges and compromises. But it's I think, as a as a universe of media, it's not something we're totally unfamiliar with. What I would say that I'm trying to bring to Bloomberg is, in terms of crypto coverage, is a phrase that I use a lot, which is rigorous skepticism, And that is to say, I'm not actually interested in being cynical or nihilistic about the asset class. I'm not interested in starting from a place of well, all of this is, you know, potentially fraudulent, Like I don't think that's journalistically useful, and I also think it's untrue, right, Like is there an above average number of sketchiness happening at all times? Yeah? Sure, but it's it's not that's not the entirety of the universe. Similarly, I'm not like a starry eyed believer, who will, you know, take for granted any claim that a aggressively well funded crypto ceo makes about this is the pathway to wealth redistribution. Like, sure, how, give me, give me evidence, give me examples, you know, like, show me materially what this means in practice. Um, And I think that's that's where I would like all of our coverage to live right that we are appropriately curious and we're appropriately questioning, but we are sufficiently open minded that we don't miss interesting stories. So, speaking of some of the conversations we've been having internally, know we're we've been working on a lot of stories that are you know, looking at the year and review for crypto and for bitcoin and for all these other offshoots, and so I'm wondering, you know, I've been asking a lot of people like what will it take to continue to see the market mature? And I'm wondering how you're thinking about that. I think any markets in which you have individual tokens or groups of tokens that can go up or down by two percent in one day is not mature yet. And I think that when you're in a situation in which individual CEOs tweeting about their puppies can cause entirely new classes of things to spring into existence, I would also say it's not you know, fully baked from from that kind of perspective, and so I look at a couple of different things. If you think about, you know, some traditional markers, like what's the depth of the liquidity, right, what's the what's the sort of proportion of pure momentum driven speculation to fundamental analysis and investment. Like how many people are huddling, as it were, not merely because they think that if they outlast everybody else there will be gains for them, but because they're making a more fundamental bet on something else. I look at the frankly, the quality of the executive bench of a lot of these crypto companies, Like, you know, what is what is the experience of the folks involved, What are their backgrounds? How do they spend a lot of time on Twitter raging against the machine or are they doing work? You know, it's it's things that you tend to from a more traditional perspective. You see a lot of activity happening in crypto that makes you think that there is a degree of un seriousness which can be funny but is also troubling. Um I'll give an example. You know, just this year, we have seen a tremendous number of outages and downtime across you know, even some of the biggest players in the space. And it'll be while you can't log in for x amount of time, or you can't withdraw or you can't liquidate this particular position, or you've been locked out of your accounts for X number of days. And if you are a person who's used to sort of technology, and perhaps some of our listeners might remember when if you use Twitter, you would see the fail whale, like every five minutes, it's like, oh Twitter is down again, and it's like that that can be funny for a while, but then you start to have people who are like, hang on a minute, this is my primary bank account, or I have positions that at risk of being liquidated here because the market is moving against me and I can't log into my account to adjust an adapt accordingly, you start to move into one actually needing customer service, like actually needing to be able to service and meet the needs of your customers who might be facing some kind of difficulty and to way better reliability and uptime. Right, It's like you get past the point of trillions of dollars where joking around on your social platforms while people are locked out of their accounts goes from like funny, ha ha, we're all in this together to just unprofessional and inappropriate. You know, Stacey, I want to sort of unpack something you said earlier on there in that answer, and um, it really it's to an interesting quote I saw recently, and I wish I had written down who who tweeted it or said it, but it was it was basically the notion that defied the centralized finance is a solution in search of a problem. And you know, people kind of been saying that about crypto all all along. But I do think you know, it's it's ah, you know something that is a criticism of DeFi. That's that's worth talking about, you know, you know, the real believers and DeFi will tell you, well, it's you know, it's opens the doors to the unbanked and to the populations that have been sort of neglected by traditional financial services. Is there validity to that? I mean, is that sort of just the nice bow you put on top of a real gambler's market to make it look like, you know, it's a virtue signal? It a little bit, But how do you think of that, you know, the whole world of the centralized finance and you know the ability to to solve real world problems that people might be having with the traditional financial system. Sure, if I put my curious and also skeptical hat on for a second. I think back to a couple of things. I think back to when people were like why do we need email? Fox machines are great and then or or like this internet thing will never take off, or video chatting never gonna need that we were in person constantly, right, Like there's always a moment when you are standing at a technological fork in the road where whatever you are doing right now seems still fine, adequate, appropriate, well suited to whatever. The problem is that anything that isn't that seems ridiculous, right, And I think there are certain there is a risk in in some of the discussion of Defy that is that idea of what we have now is fine, Like what you're talking about is overly complicated and doesn't make any sense and it's never gonna work, right, And now we say this while recording on zoom in in in full video for something organized by email that we will publish through the Internet. So I think there's some of that, But I also think that there are insufficiently compelling arguments for some of the valuations and some of the claims that we see in Defy right, Because I think it's like you could argue that the the mare fact of being able to offer twelve a p y in a lowish interest rates environment is like useful for people who are looking for yield. Right, That's that's certainly a problem that's being solved through some applications of Defy. You could argue that the idea of smart contract is kind of genius actually, that you know, you have this notion of within an agreed set of parameters and variables, you can automate things right now that are otherwise very manual. Any lawyers listening to this like hatesmart contracts because it's so potentially ultimating them out of jobs. But you know, there's like lots of interesting stuff out there, But there isn't, you know, to use a phrase from our colleague Olga Crief, there isn't a killer app for defy yet other than like, here's like yield farming with super attractive interest rates, or here's a handful of particularly technical or you know, niche uses that some people find really helpful, but for the vast majority, their eyes glaze over when you try to explain to them how it works. I'm glad you brought up the fax machine. I'm so old all Donna. When I was a baby reporter, the newspaper had a fax machine, but like the police department didn't, and the funeral homes didn't, So you know, I'd have to to the police station take notes on all the police reports. You know, the funeral home would call and and read me in about thirty seconds, the super long o bit that that I'd have to take down, and you know, so uh to me, the facts machine was revolutionary when when those places starting to get I can see where Paul Krugman was coming from when he said, you know, the internet is is just going to be as influential as the facts machine. I've got it to be pretty influential. I'm imagining baby Mike Reagan reporter. I'll bring by the fax machine here, browner hair, you know, otherwise not the same Stacy. I also wanted to ask you, speaking of all things defy, there's also this trend of regular, you know, old school traditional financial products, things like e t f s maybe also moving into the DeFi space, or some version of it moving into the DeFi space. I'm wondering if you're surprised by sort of that whole world recreating itself in the crypto world not at all. Um, you know, sort me say this because as we said, we're basically deskmates where I'm like everything old is new and crypto, which is you know, the idea that in whatever you have a starry eyed industry that's like, we're going to change the world, but first we're going to rebuild everything we've left behind. We're gonna make them better, but we're going to start from recreating this infrastructure. It happens all the time because inventing things that are genuinely new and have never existed before is you know, super hard actually, um, And what I what I also think is that there are parts of crypto, there are parts of defy that let you do certain things more efficiently potentially or you know, with less friction, even if the underlyings are very similar. Right. So you know, we've we've kind of looked at different things around what would it mean if remittances didn't take days on average but instead took hours and you could initiate them from WhatsApp Right, You're still doing the same thing. You're moving money across borders, but the cost of moving that money and the convenience of moving that money is like transformational in in its distinctiveness. And so I don't think that the that recreating old things in a in a with a new code of paint is necessarily a bad thing. And it's often helpful to help skeptics migrate along with you because somebody's like, oh, I understand E T S, or I understand tokenization, or understand fractional shares, and so I have now a useful mental model to approach something that I couldn't make head or tail of before. As they said, I wanted to get into the n f T market a little bit. You know, it's fascinating me because NFC has really started out as sort of this, you know, it seemed to come from the artistic community more than anything else, and kind of the the outsider community. And there's obviously, you know, uh, sort of an appeal and and uh a natural nous, a sort of I don't know if it's it's something to feel good about. I feel like, but then, you know, every day I come in now and there's some corporation or some celebrity in my inbox talking about a new corporate sponsored n f T or some celebrity getting involved in it. It seems to me to kind of cancel out that sort of grassroots artist end of it. You know, is there attention there? Do you think? And you know, I know it's impossible to say which way it goes, but does the sort of corporate you know, intrusion on the n f T market kind of kind of ruin you know, the fun on the arts side of it. This is the absolute punk rocker in you. It's like down down with the man him, absolutely, and so I mean it. I'll say a couple of things about that. One is, when people think about n f T s right now, they often will have a visual in mind, because you know, the thing's selling for dollars seventy million dollars. Are visual representations that are akin to or in some cases are art, right, So I don't necessarily consider an ape smoking a cigarette high art, but it is it is highly visual. And then there are some pretty cool and interesting experiments you know, from like folks like everybody, from people to banks see that are much more in that like fine art with a digital perspective, um kind of persuasion. But but the visual is not what defines the n f T right, What defines the idea of the of an n f T is this idea of uniqueness and that you can only have one, not because the thing itself is not replicable, but because there is a one to one ownership claim. And so I do think that right now, art is where n f t s have like captured the popular imagination, and there is some fun outsider energy just as much as there is you know, massive corporations like a MC and Marvel and others being like, ha ha, we can make more money on this. Here's a spider Man n f T for you. But I also think n f T s are like massively under imagined in their ultimate potential right because it's like you could represent anything with an n f T. It's it's it's a container for ownership. And I think when you know, it could be drawings, it could be music. I um, I was reading a story that an unreleased Whitney Houston track was just sold as an n f T. Right, It's like it is a container that represents authenticity. And I am looking forward to folks putting more interesting things in those containers over time. And I'm also looking for there to be kind of a shakeout. I mean, you know, my you and me are probably old enough to remember when like A O L was a thing. There you go and in addition to all of the unused cd s with an hour of A L access that so many of us connected over the years, brands would like claim their A O L identity right and they were like, we have to set up shop on a O L. And then it was like, well, we have to have our own dot com presence, and it's like we have to have our own Facebook page, we have to have our own Twitter handle. There's always a digital brand rush to make sure that one they have some control over their intellectual property on whatever the hot new thing is, and to that if there's any money to be made or any audience engagement to be generated, that they don't miss out on it. And then there's a shakeout right where the brands who understand how to like interact on that platform survive and the ones who don't don't. So I I it's a great point about sort of the potential of of what an n f T can be. I always bring up the notion of the z racing, you know, based digital thoroughbred horses that can race each other and can breed and you know, sort of recreating the whole horse racing industry in n f T. Whenever I talk about it to like, I won't say it used the word degenerate, but a gambling enthusiast friend of mine there. You know, they may roll their eyes at the notion of n f T S, but then you mentioned that and then explained, right, but horse racing Okay, now this is this changes everything. Yeah. I want to give a shout out to my in laws who just last year got rid of their A O L dial up internet. Wow. I know, I know they've been paying all these years. I think it was like a monthly fee. So and there are the listeners of the podcast, So shout out to the in laws. Hello, shout out. But just to wrap everything up, obviously a big through line here is that there were all these new people who entered the market for whatever reason, as you laid out at the start out of the show, and I know we are constantly thinking about, just as we are with the stock market, thinking about whether or not these new investors are going to stick around. I know for a while the idea was that as economies everywhere start to reopen, that people will become less interested. There won't be as much stimulus, etcetera, etcetera. So do you think that this huge new wave of investors is here to stay. I think every generation looks for a place to put their money. And I also think that it's never been true that investing is a solitary act, because I've certainly read a lot of coverage that is like, oh, you know, they're just saying that it's about community, but it's actually just about money. Like yeah, but you know, fund managers in the mad Men era, we're all trying to impress their smoking buddies with like whatever, whatever their picks were. That there's always been an element of social approval to portfolio management, even when new approval is the rejection of the status clue, right, you want to be the contrarian, you want to be the bear in a bowl market. And so I think when people underestimate the social and community elements of crypto, they miss a very large part of the story because unlike you know, the previous times when your social universe will like your fellow men at the country club, because let's be clear, there are mostly no woman there. Now it's the five thousand people in the discord with you, right, and they can be all over the world, and they're going to come at things from different places, and that is you know, discord is it's a big chat for him. It's like slack, it's like a well, a messenger, but it's a place where people are communicating, and it's it's built into how we live our lives. And I don't think that communication is going to go away. And I don't think the expectation of I'm going to ask perfect strangers what gotchi? They're gonna buy U? I don't think that's going away either. And so even if we see a major shakeout, I mean, like we are down again from the high um, all of this money still needs places to go and folks. So yeah, sure some folks will reallocate them. They be like I can't handle this volatility and buy some bonds. But I don't think it's going to disappear just because some people have moved on to the next thing. Like there are signs, you know, even with what I said about the relative immaturity of the asset class, there are absolutely signs of institutionalization. Right, you mentioned e t s. Right, there are so many more ways to get exposure to something that is still offering really impressive returns and yields compared with you know, lots of other things out there. All it's basically before we get to our crazy things of the year, not just the week. I think we've got to do over the year this time, just briefly. What so, where do you see the whole plot line going for crypto? And you know, both the regulatory front and just the the space itself, you know what, I know, it's impossible. It's such a fast moving space to try to predict what I feel like if I could answer that question, i'd be I'd be a hedge fund. Fair enough, fair enough, you know, the journalist. But I do think the biggest open question in crypto is what a regulator is going to do. You know, I don't think it's going to be an all or nothing. It's all all in in the in Salvador way or all against in the China way. I think there's and I actually think that is much harder in some ways, because it means if you're interested in this space, you have to become an expert on the regulatory regimes of like fifty different governments and you know, an equal number of central banks, but the amounts of uncertainty over whether just in state by state in the US, for example, you are allowed to like access meta mask or some other kind of wallets is considerable, and that is certainly weighing on consumer access because institutional investors will always find ways around um whatever regulations are. And then I would say the second thing is we'll probably start to see some price normalization across various types of asset classes. And I don't think the price normalization necessarily means we're going to decline in another for I think there's going to be more of a reliable median for certain types of things. You know, like the the NFC market right now is such a barbell. It's like hundreds of millions of dollars or two. It's like and there's there's you know, significant concentration on the two end, and a handful of examples on the hundreds of millions of dollars, and and that's not super sustainable or attractive or interesting, right Like it's it's hard to become a mass market product if you either offer very little or you offer a ton, but only if you have significance capital too to guess into that space. And so I think we'll probably start to see a little bit more of a shake out there, just so things kind of settled to a place that make more intuitive sense to folks. Tiden up your straight jackets. It's time for the craziest things we saw in markets this week. Stand clear of the craziest things we saw this year. What's the craziest crypto or other story in markets he saw this year? Well, I've been thinking a lot about this because obviously I covered a lot of them, and it was really hard to make up my mind. But something that I read recently is sticking out, and Stacy a little bit already was alluding to this. So Stacy earlier had said at the start of the year it was all scams all the time, and so and so lost their crypto keys, etcetera, etcetera. And there actually is this amazing story from the New Yorker called half a billion in bitcoin lost in the dump. So my second shout out today that one goes out to the New Yorker. It's an amazing story of this person who claims to be the fifth person to have been mining bitcoin like way way long ago, and he unfortunately lost his hard drive that has all the information on it. So he's trying so hard to literally dig it out from a dump in England. Is that the guy he's like in Wales? Yeah? Right, I remember reading about that. Yeah. And he's trying to the UK, trying to pay off the operator to let him in with the metal. I mean, is finding it though, But it's something like a few hund million dollars worth five it's I think it's five hundred million dollars right, yeah, So, but it's amazing he has all these blueprints for how he's going to dig it up little by little and have it go through metal detectors and all these people who are going to be working on it. Who's going to get a cut and you just you you feel his pain. But at the same time, I love the idea of it being about, you know, him actually just losing a little computer a piece, so, but an actual physical thing that he lost. If I were him, my first line of questioning would be, like, did any employees of the dump retire early? I I want to know who they It's a really good point. That's that's who I That would my investigation would start there. But Stacy, how about you? I don't suppose you saw anything crazy? And crypto markets show every everything is super chill all the time. Um, in October, if there were a bunch of headlines about the fact that, like, whoa, this crypto punk, which is a collection of n f T has just sold for five hundred million dollars. What's happening? Mind is blown And then we're like, wait a minute, the person who sold and bought the crypto punk is of the same it was. You know, it was wastrating, right, and like the person was doing it for the lulls whatever. But it was enabled by a kind of a smart contract, a flash loan, right, which is the idea that you could just in the space of seconds, like the time it takes to perform that transaction on the blockchain, put something up for sale, borrow a bunch of money to buy it back, and then repay that money in the process of selling it back to yourself. Like this just with computer code was fascinating to me because I thought, okay, one, here's the world for which regulates is a completely unprepared and it's just sort of another example of you know, there will be some folks who always have alpha because they understand different ways to end run the system, right and you know, you could argue that wash trading is kind of victim lest crime. The I R S might have perspectives on that, the mere fact that the cost of that transaction was minimal to this person because like flash loans are generally on collateralized, like you don't have to put up a bunch of money to borrow it. Like what what are the if you think expansively about what that might mean for more interesting transactions. It was a little bit mind blowing that. Yeah, and it goes back to your point of everything old is new again. I think I was supposed to write a story about that night. Prodecy we do about it? Then that you were busy is another year, the new opportunity for more balls to drop. So we're recording this a couple of weeks early here, right in the middle of December, and mine was just the really just a couple of nights ago, Stacy, when we're sitting there and you all of a sudden said, the price of bitcoin is up about eight million percent or something. I forget the exact number, but some data era happened I guess somewhere between coin base and coin market cap, where prices just went bananas. You know, I don't even know what the top tick of bitcoin was and that that error, but it was. It was something in the hundreds of millions, I think, maybe even in the billions, and even shiba you know. I think at one point it was worth twenty nine thousand dollars uh per shiba, you know, which is worth way below it a fraction of a penny. But it does, you know, it goes back to that notion of where how the industry needs to mature and and where it's going. I mean, to me, what was amazing is people just left it off. You know, people were doing screenshots of their accounts with billions of trillionaire a trillionaire and a hundred billion dollars in my coin basis. I mean, in a way, it makes me think, well, the users kind of have matured enough to know an error when they see it. So maybe maybe that's part of it, is the user base. Now it's not just sort of the plumbing of the market and everything, but the users themselves kind of know when they say it, you know what I mean. I think I think the reason that that was okay was that everything went up. That's true, I mean, because you know, imagine let's say everything had massively gone down and that had triggered like liquidations for instance, or you know, or like blew through someone's stop orders. We might have been having a very different conversation yesterday. Then that would not be as funny, would not have been as a funny joke. Well, I think instinctively, you know, that's kind of what you worry about. You could you could see theoretically, you know, something happening to cause a massive you know, dropping bitcoin to see a massive million, ten million percent rally would seem, you know, on its face, less pausible. I guess I know. With that said, I don't know. I it's hard gonna be hard to top the crazy things of words. I hopefully I'm chexing it. We have. We've got plenty of more crazy stories to write next year. What do you think filled out of Yeah, for sure, no way that it's not going to be crazy again. Stacyvil that is most excited about bitcoin and crypto being seven because that means she gets to work on the weekends, like she she does not have to like figure out something like absolutely not. My eyes go wide every time somebody brings it up. There they go. They did just go eyes. I think the laser beams shot out of her eyes on that one too. Anyway, I think that's all the time we have it. Stacy. Is so great to have you on the show, and we're definitely gonna bring you back a few times to make sense of all this because it's here to stay like it or not, it's here today exactly. Thank you Stacy a pleasure What Goes Up. We'll be back next week. Until then, you can find us on the Bloomberg Terminal website and app or wherever you get your podcasts. We'd love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter, follow me at Reaganonymous. Will Dotta Hirich is that Will Dota Hirich. You can also follow Bloomberg Podcasts at podcast and Thank you to Charlie Pellett of Bloomberg Radio. What Goes Up is produced by Laura Carlson. The head of Bloomberg Podcast is Francesco Levy. Thanks for listening, See you next time. Four