caroline: from bloomberg's world headquarters in new york, i'm caroline hyde. romaine: stocks rise once again. joe: what did you miss? carolyn: if you're looking after hours, disney shares lower in the late trading as disney plus misses estimates. businesses continue to see disruptions from the pandemic. before the bell, the real

hardliner was elon musk throwing shade on bitcoin. his concern over bitcoins energy usage. the biggest supporters taking on the balance sheet. bitcoin tumbling below 50,000. also, coinbase's earnings. people wanted to see more in terms of digital asset growth. a bit of a pain after hours. joe: with the crypto selloff we got today, we did see coinbase fall during regular trading. after hours, down about 4%. numbers were not that bad but they were not anything that will weigh the doors. there you -- that blew away the doors peered let's bring in katie gry feld. interesting day. feels like the momentum in this space is flagging a little bit

coin has not made a new high in several weeks. all of the excitement was in crazy stuff such as various dog tokens. it felt like today was a long time coming. >>, tim has been lacking -- momentum has been liking for a wyotech bitcoin sold over 15% last night after yvonne musk's two eat. -- after elon musk's tweet. right now, it is down about 10%. people are looking to the coinbase earnings as a catalyst to take us back up to it did not really happen. none of those numbers missed but they were not anything to write home about. if you look at the first quarter net income, it came in at about 770 one million. that was below the upper end of the range the company had forecast.

that isn't being taken as a disappointment. romaine: there was another current that ran through the market. that was the specter of regulation. we had the bloomberg scoop of bytedance being investigated by the justice department. there was a lot of concern about the hack we had with the colonial pipeline. on the regulatory front, is that becoming much more of a real and present danger to the rally? >> it was interesting to see that news hit today that by finance is facing that probe. it has not been reported they are accusing them of doing anything wrong. it was interesting to see that today because the sec chair who was appointed to the chair, he said last week that crypto exchanges do not have a regulatory framework could they

do not fall under the sec's regulatory oversight. he made the case to lawmakers it would like to have more oversight over the exchanges. you have seen those exchanges come under greater scrutiny. that has poured water over the bitcoin etf approval hopes. caroline: all things crypto for us. more ahead. this is bloomberg. ♪

mark: i'm mark crumpton u.s. centers for disease control and prevention announced the most significant shift in federal

guidelines since the start of the coronavirus pandemic. >> anyone who is fully vaccinated can participate in indoor and outdoor activities large or small without wearing a mask or physical distancing. if you are fully vaccinated, you can start doing the things you have stopped doing because of the pandemic. we have all longed for this moment where we can get back to some sense of normalcy. >> whether you are inside or outside, i think it is a great milestone, a great day. it has been made possible by the extraordinary success we have had in vaccinating so many americans so quickly. mark: dr. walensky did specify exemptions. she said masks are required in

some circumstances like cross-border travel. but as prime minister boris johnson says he is anxious about a rise in u.k. coronavirus variant that was identified in india. a study of infections in england has found the variant is becoming more common. the news comes before a scheduled easing of lockdown restrictions in the u.k. india is suffering a resurgence of the virus and concerns have grown around the world about possible new variants. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton should this is blue -- i'm mark crumpton. this is bloomberg. romaine: welcome back. we are focused on crypto. you london mosque once again doing his part to drive it down -- elon musk once again doing

his part to drive it down. joe: he did have that effect because he came out last night and said they are going to hold bitcoin on their balanced rate -- balance sheet. they are no logo going to be selling tesla's. i don't know if anyone is buying. tesla and bitcoin. teslas for bitcoin. we saw the price plummet after the decision to return to currency. caroline: continuing the commentary and getting into chats with -- scenting coverage -- sending coverage. many have come back and said enough. did he really not know this before he decided to start taking on his balance sheet? joe: that is the weird part. let's bring in ed ludlow from san francisco. what is the deal with that? he knew all this.

he understands energy. everyone talked about this from day one. how is it that two months later, fossil fuels? ed: the mission statement of tesla is to transition the world to sustainable energy. elon musk has only ever been consistent on that point. he talks about that is the whole rationale for the company. he talks openly about a carbon tax. he is the chief executive of spacex and has set openly i would happily pay a carbon tax to offset spacex's in mission. -- in mission. he gives the appearance of gang an expert in both fields, energy and cryptocurrency. we have limited wall street reaction. it is a u-turn, which is founded on what you expect to be a good knowledge base. joe: really appreciate your

explanation even though it is still a bit of a head scratcher. our thanks to ed ludlow. running us more -- joining us for more counsel island venture founding partner nick carter. what is bitcoins plan? what is the roadmap to transitioning to proof of stake system and longer relying on computationally intensive mining? >> bitcoin does not have a plan because it has no leader. when individuals or firms have tried to commandeer bitcoin, they have not been successful. bitcoin has no plan. the consensus in the community to the extent it exists is -- the proof of stake is not a desirable alternative. romaine: some people reading between the lines of what elon musk said seem to suggest maybe

he is eyeing an alternative. are there alternatives? >> there are certainly many other systems that purport to do the same thing bitcoin does. there are many clones of bitcoin and many blockchain 3.0 and so on. in my view, none of them have proven to be sufficiently decentralized. if you pull the proof of work element out of bitcoin, you get something completely different. a lot of bitcoiners would question whether you could eliminate proof of work and get the same assurances. caroline: some also saying maybe elon musk is just throwing down the client let. -- the gauntlet. is that the answer? bitcoin does need to remain in some did you fault. he wants to maintain that. our people shifting for cleaner ways to mine it? >> absolutely. there is a big distinction between an energy cost and the actual carbon outlay, which

people often miss. it depends on the source of energy you are using. we know a large share of bitcoin is mind in places like sichuan. we can do a lot better. there are some great secular trends. the chinese province of inner mongolia banned bitcoin mining. we are seeing a lot more rate onshore onto the u.s. the u.s. is a greener grid than china. that is great. i would like to see more from miners in disclosing what their energy mix is. certainly, there is a lot of cause for optimism here. quite contrary to the tone e elon musk is putting out. joe: you worry about bitcoin's

energy usage a lot. the point you make about how there is a difference between energy usage and carbon emissions. do you as a participant in the industry think from a regulatory legal standpoint that one of the bigger risks to the environment is that regulators crackdown on this for precisely this reason, hence your motivation for writing about it so much? >> the motivation to write about it is the debate is poorly informed and a lot of the critiques i see are just not grounded in reality. the facts of the protocol certainly, we are seeing capital become more politicized and informed by esg considerations in the u.s. that is only going to continue. every day, i talked to large allocators that have trepidation about bitcoin because of the environmental impact of the system. it does impact everyone on the

capital allocation, capital management side of the industry. it is already a consideration today and i expect that will only continue to be the case as esg gets fully normalized. that will be the challenge i will posed to bitcoin miners. they want to accumulate the coin. their duty is to render themselves as environmentally friendly as possible or by carbon offsets. romaine: i want to get your thoughts on coinbase. we did get the first earnings report today. we kind of knew the numbers. we did see healthy monthly transaction numbers. what do you generally see as the brights but for coin but -- bright spot for coinbase going forward? >> coinbase is a straightforward business. there revenues are a function of retail trading volumes. those have been strong.

they have not changed. there is not a lot new. pretty much delivering exactly as expected. the price-performance has been somewhat disappointing. not a lot of surprises. what i would like to see would be if they can diversify their revenue a little bit and build it -- mirroring the way the conventional exchanges operate. they tend to have larger data businesses, few crypto exchanges monetize their data. seeing if coinbase can monetize their a um on a net interest model. they still have plenty of room for growth. caroline: full disclosure, my husband is a senior manager at bitcoin -- i coinbase. in some ways, coinbase gets -- bitcoin gets pulled down when coinbase falls. even though we see another they

can institutional player -- we see another institutional player hanging their hat, -- i feel like you are saying this is a high to dip opportunity but at one point does it see a significant sell of coming to the crypto space? >> we have sold off most of the selloffs partly to do with the elon musk defect and the disappointment around that. that is going to affect the broader market. we see this investigation today. i think people are going to realize the sec is going to be more aggressive. the commissioner is going to try to make his mark on the crypto industry and a lot of these exchanges are hosting the trading of ubs products, -- of dubious products. thanks that might be brushing up against securities laws -- things that might be brushing up

against securities laws. joe: is it a problem for bitcoin i cannot buy dog tokens? >> i don't know if you want to be buying the dog tokens. romaine: we will be back in a moment. this is bloomberg. ♪

caroline: we are focused on all things crypto markets. the sec had a warning for investors in mutual funds that have holdings in bitcoin futures. a positive viewpoint coming from the new commissioner of the sec.

joe: most people know this, but the sec saying investors should understand it coin -- should understand bitcoin is highly speculative. bitcoin might go down. we appreciate the sec letting people know. so we are going to be talking more about crypto. i want to bring in the general counsel of o8o1 labs. i want to get your perspective on this idea of electricity cost. do you think blockchain technology tokens can move past the need for computation expensive crypt mining? >> thanks for having me. i think it varies largely. there is a proof of fate, which

moves along to other networks. i think you are seeing a lot of energy consumption focused on not only by people like elon musk but environmental groups as well as neutral funds that have a wide investor base. i think it is hard to give -- more and more, i think you're going to see a focus and criticisms over how the network is run. romaine: a lot more scrutiny from a lot of different angles. let's talk about the regulatory side. this is some of the actions we have seen out of the irs and the justice department. better tracking these payments and trying to see not only if people are paying taxes on them but whether they are using the money or these cryptocurrencies

for something they should not be using them for. >> it is the biggest crypt exchange right now. if you take a look at what happens in bit max, you saw the doj brought a joint action against them and even criminal indictments for individuals running it. boj claims they are not doing enough to prevent money laundering. you have accessed all these funds and currency exchanges so you have to do more. you are going to see a similar focus from the doj with respect to finance. with the irs, what they are interested in is unmasking some of these transactions and individuals who want to stay anonymous. you can see who is paying tax. exchanges want to resist that urge.

you see the tension and often that leads to investigations. caroline: it felt like they saw this coming by the hiring of a new ceo who happens to have a long legal background. he is going to be able to perhaps put his case across. are companies at loggerheads right now or is there going to be a compromise where the future of crypto stays true to itself? >> i think you're going to see a lot more pressure on nexus of cryptocurrency transactions and definitely marketplaces like exchanges. otherwise, it is hard to imagine a world where regulators feel comfortable. a massive amount of on flows on

digital assets they cannot track or receive. when brian picked the position of ceo, he probably knew this was something he would have to build a case against. i will remind everyone this is just an investigation and just because you don't hear about an investigation does not mean it is not happening because these are being done confidentially. this is still very early on. we don't know a lot of facts and it will take some time. caroline: take some time. continuing the conversation on all things crypto. used to work over at goldman sachs. knows his stuff across the spectrum. what are you looking at tomorrow, the next elon musk toy? joe: i think there are some technical lines happening. some moving averages are getting close to touching each other. i'm very curious about those.

i will be checking those out first thing in the morning. romaine: joe is always caught off guard by this question. joe: you ask it every day and i never expect it and i have to make up something every time. romaine: this is bloomberg. ♪

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>> from the heart of where innovation, money and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang.