romaine: from bloomberg world headquarters in new york, i'm romaine bostick. joe: and i'm joe weisenthal. caroline hyde is off today. let's take a look at where we stand in financial markets after hitting record highs. the question is, what'd you miss ? romaine: it was a historic day

for the markets, at least cryptocurrency. coinbase ushering a new era for cryptocurrencies on wall street. we are talking about an asset class that has been mocked from the start, but moved into mainstream acceptance. the shares did fall from its opening, but trading above its reference price. trading on a for -- fully diluted basis was where it was trading in private markets. and remember those guys -- goldman sachs, j.p. morgan, wells fargo all reported earnings today. are you going to put your money in goldman sachs or crypto? joe: 60/40, but i am not going to tell you which is the 60 end which is the 40. as you mentioned, coinbase going public. it did end up way on the highs. it got as high as $420, $328. romaine: and there is a lot of mocking and joking here, but

this is a significant milestone for the crypto spear. joe: a huge day for crypto. we already know, massive, coinbase, historic, etc. you are the ceo of a competitive exchange. talk to us about the competitive landscape. is this a multi-winner space? >> we were all applause all around with our team, cheering on the coinbase team, making huge strides in the industry. it has been a mocked industry and yet we have seen validation after validation, institutional customers coming in, companies going public, huge milestones that are remarkable across the space. romaine: with coinbase now

public, that brings a lot more scrutiny, rightly or wrongly. i am curious, when you look at the volatility we see in crypto and you are trying to run an actual company based on the fundamental returns of how much you earned in this space here, do those correlations come back to bite you, i guess? katherine: we welcome the success and think there is so much room in this space for users to explore the many options that they have when it comes to entering the digital frontier. we saw these great q1 numbers from coinbase, and i will run through a little bit of this past quarter -- we have a 10 increase in trading volumes, crushing over 1.3 trillion trading dollars today in total.

when you look at that from a perspective, that's 190 x increase of trading activity that we have been able to welcome and in america. if you are curious that there is room for more, the answer is absolutely yes. and who's coming into the space? we do see institutions coming in with excitement. we just launched our institutional page welcoming more of our folks from the old world at morgan stanley and traditional hedge funds, but we also cater so much to those in need of those accessing a digital assets. that's really remarkable, to see that much growth in q1. joe: when you talk about institutions, how much of that is ok, some institution wants to maintain as a part of their portfolio some slug of crypto.

versus, hard-core hedge funds, traders, etc. that want to get into a new asset class that is extremely volatile, and therefore extremely exciting and fun to trade, potentially a lot of profit opportunities. what's the split in terms of what you see when you say institutional trade? katherine: you got a significant amount of diversity and that institutional class, which we cater to all of that, whether you are a high-frequency trader, whether you are interested in arbitrage, whether you are doing buy-and-hold considering the treasury, these are all parts of our business that we build out for, understanding the sophistication levels and strategies of customers coming in needs to be as broad as possible to make sure we have healthy markets. i am keen to understand who is coming into the space. we saw a lot of family offices and big macro players trading with their personal accounts. those signs are exciting, but they are following momentum trading, as they had been in

other asset classes. those guys are absolutely coming in and trading much more every day. romaine: what's the future for finance. do you want to tell us while you are having your ipo right now? catherine: if i had one, i would already be sending out confetti. the billing processes are still in place. it's really just the beginning of what's being done. i am incredibly proud of our team to make this much strides in the markets that people had dubbed oversaturated or overbuilt with crypto exchanges. there is obviously a clear need for more americans to understand this asset class and get access to it. by championing the success of others in this space and considering we can still build this together, we set ourselves out to be the most successful and approachable platform, purposefully low trading fees, and all powered by cutting-edge technology that can really handle the growth. joe: i take you at your word

that you are happy for a competitor and everyone wins and it is more attention, but what is the pitch? if someone is interested in crypto and they have many options, coinbase is the most well-known, what is the key way you see finance u.s. differentiating yourself, and what do you say about the type of person that ends up opening an account versus coinbase? katherine: i don't like to pay fees on things that are digital that are going to be involved in my life on a daily basis. it really takes away the excitement for the steak and the utility in terms of how i look at it. when it comes down to fees, that's what i'm looking for first. next, i want to make sure the platform is built with a market minded individual behind it. the fact that we are understanding where more traders are coming from and going into, that's critical. you will see that in our

technical analysis, in our api having extensive amount of -- for our traders, and we are building this in an asset class that will be able to be nimble while we evolve. romaine: catherine, always appreciate the time. coming up, we will have more perspective from the industry with regards to the coinbase listing. the largest digital asset lender, genesis, will be joining us after the break. from new york, this is bloomberg. ♪

romaine: today we are focused on the direct listing of coinbase. there's a lot of talk here about coinbase's value and the price,

but there is a broader issue here, about the legitimization of the crypto universe here. i guess the institutions are finally coming on board with what a lot of people have been banging the drum about for quite some time. joe: maybe people don't know about this, but there is a bitcoin trade which is free money. i don't mean buying it and hoping it goes up. there is a gap in the stock price and the futures. in theory, you could find a spot to short the futures and make some money on the spread. joining us with more insight, the vice president of institutional lending at the digital currency brokerage genesis. i need to ask you straight up, will you lend me money to buy bitcoin spot and then i can short the futures? >> thanks for having me. it's great to be here.

bitcoin's collateral. that's a conversation we have been having more recently, especially leading up to this ipo. such a monumental day. in short, yes. that's a large source of our demands, and it's a big reason for the demand you see in institutional lending and crypto for cash. romaine: i know crypto has become a real asset when you can do a basis trade off of it. i'm curious about the risks involved in something like that when you have more volatility on the underlined than what you had in some of the traditional basis case here. >> this is the thread that i touched on on twitter. one of the largest ones there is the margin requirement. when you are shorting futures on cme, you are required to put 40%

of the collateral in cash. that could be expensive. it's easier to do the trades from the other side in many ways, where the future is trading below the spot price, and genesis has been around since 2018. our first borrowers were bitcoin borrowers, and that trade has evolved. the way you think about it is, if the price were to go up quite a bit, you could lose out on a lot of margin. that's one of the major risks, among others. joe: obviously it's a big step for the industry, for a company like coinbase to go public, institutional acceptance. what do we need to see on a market structure, infrastructure basis to close that spread so

that it becomes easier to actually do these trades and not face so much risk? >> for sure. there are two major aspects to solving the issues. the first one is physical delivery of futures. right now, a lot of the futures out there are sort of cash tunnels. a one hour average price at the futures window, that introduces some issues with how much size 10 -- trade. the second is the margin requirements. you have to be able to have coin used as margins. it is not a direct point to access. those are two of the major issues, i would say, and we will see how that evolves over time. romaine: do you anticipate seeing more traditional

financial institutions trying to get into this, trying to hone in on this side of the business, offering effectively what you are offering, but maybe with a scale that you don't necessarily have at the moment? >> i think genesis has done a good job about catering to a lot of people who do this trade. a lot of the endowment we are getting right now is on the education side, but prior to that, one of the reasons we are the largest institutional lender in the state, we are catering to the firms that are doing this for quite some time and are very nimble and able to do it. part of what we are doing is education. we have a capacity to do it and we are looking forward to more and more people engaging in the trade. i do think ultimately at some point, we will see how there's a farewell to place like genesis one we have already been involved with facilitating the trades. joe: people have been talking about this basis trade for years and it has been well understood

and sort of known in the crypto community -- probably not many people outside it pay real attention -- have you seen a change lately and the awareness of this opportunity? what kind of clients now are looking into it as an opportunity to essentially pick up some yields in a yield starved world? roshun: yeah, for sure. in 2018, you had a pretty vicious market, where futures were trading at a discount. that introduced a lot of the traditional financing early and crypto, earlier thinking about the space and cme's. they were like, genesis seems like the only spot we could really do it, and taking us through this. the other side is a cash denominated trip. people have a lot of cash. you are seeing more traditional financial firms might not really care to even hold it, setting up

more std type structures, get a lot of cross margins that genesis offers to make the trade a little more friendly from a user perspective or a client perspective. the client is definitely involved. we will see how it continues to develop, but it is a broader conversation for sure. romaine: ro patel, vice president of institutional lending at genesis. goldman sachs and jp morgan reporting monster earnings. we will get into the numbers, next. this is bloomberg. ♪

♪

>> the economy at this point seems to be a bit of an inflection point. that makes sense with ever more widespread vaccinations, with continued support for monetary policy. you can see ridership on airplanes going up and people going back to restaurants. i think the march jobs report we recently got shows what that can look like. romaine: that was fed chair jay powell speaking about the economy a little earlier with david rubenstein, cofounder of carlisle. that was hosted by the economic -- of washington. he also went on to discuss what the fed might do and said that the fed might not raise interest rates until 2022. they are already looking out to 2023, unless there is a meaningful sustained rise in

inflation, we are not going to see the fed do a lot. joe: i think it's an easy job these days, because they say when we get there, we get there, but in the meantime, don't do anything. we also have regular banks, not central banks, reporting earnings today and by and large, really strong numbers. the biggest winner today was wells fargo, gaining 5.5 percent. the actual performance from some of these, like jp morgan, goldman sachs, these were absolutely huge numbers. for more, let's bring in from hannah levitt. big picture, we saw jp morgan down a little bit and -- goldman down a little bit and jp morgan -- jp morgan down a little bit and goldman sachs up a little bit. >> this is objectively a great

quarter for those two firms. we will see what happens when the rest of them report tomorrow and friday, but yeah, things were looking very, very good for those two in a lot of ways. romaine: we are talking about trading revenue for both goldman and jp morgan, also talking about investment banking revenue, which knocked it out of the park at jp morgan. we did hear jamie dimon talk a little bit about loan growth, and he's being a bit muted here. that caused some concerns. what's going on here? >> he later said he made a mistake in that word. the way diamon pu -- the way dimon put it, there's muted demand from borrowers on the demand side and the business side, and other executives

pointed to stimulus checks and ppp and the low cost of tapping the depth market and what we have seen over the past few years as the reason why. his point is that things are actually looking good. aside, things that go out of their earnings and net income, which is money they make on loans minus what they pay for deposits -- it is not a transfer to the bottom line, but they did express optimism about the recovery, which is good for them. joe: on investment banking, i was reading some things a while back about cutting out the middleman, they would be cheaper than ipo's, a threat of the legacy of the wall street business model, but they are just making money. >> we saw huge numbers due to spec mania, and then there is d

espacing, which can make money for banks. romaine: we saw wells fargo outperforming the other banks, which is something we have not seen for a long time. they seem to be turning the corner here. we heard from the cfo earlier, what exactly is the progress they have been making, and what's going on with that asset cap? >> the biggest thing for wells fargo on an earnings day is the essence of bad news is good news at this point. if you take a look at what we have seen over the past few years pretty regularly, that's definitely a huge factor here. and he's been ceo for almost a year and a half now. he spent a long time conducting these reviews and now we are seeing he sold some units, he

wants to shave eventually 10 billion dollars off of their annual expenses. you think about their actions to get the firm back in line with where he thinks that it needs to be, and so that's looking good to investors. on the asset cap, they are still under the asset cap and have been under it for more than three years at this point. there's not much they can say on it. there's not much in terms of updates that they give on these quarterly calls. however, we reported earlier this year that they did get the fed to accept their plan, which is a first step, so there is still work to be done there. it's not coming off tomorrow. but that's a show of progress. joe: rate round about today's results. our thanks to hannah levitt. david westin will be speaking to brian moynihan 5:00 p.m. new york time as part of a special

wall street week. you won't want to miss this. that does it for "what'd you miss?" bloomberg technology is up next. have a great evening. this is bloomberg. ♪

taylor: this is "bloomberg technology." coming up, it is the public debut of the year. going basic going public via a direct listing, shunning the traditional ipo market as it eyes that $100 billion