>> i'm caroline hyde. >> i'm joe weisenthal. >> i'm romaine bostick. financial markets, merger media dominated the headlines. >> the question is, what'd you miss? >> in some ways, elon musk becoming the godfather of crypto. the price of additional coin goes in one direction or the

other. about a quarter of bitcoin's value has been wiped away in a week. was it him that gave it the lift higher back earlier this year when he said tesla would allow purchases? remember on saturday night live when he said dogecoin was a hussle? michael nova gratz may have something to say. first, we have to dig into how the markets started the week. interesting winners on the back of crypto. >> a wild start to the market, everyone focused on the big crypto selloffs over the weekend. crypto is kind of week. elon musk with his tweets, delivering a bit of a blow. not a huge impact rightly on the market other than tack is down, nasdaq down, tesla down over 2%, semiconductors 9%.

some hard drive makers were up because there is a new cryptocurrency called chia that people are mining with hard dives. -- hard drives. let's start big picture. the story is more tech weakness, crypto aside, that drives lower. >> feels like it. if you dig down, you can find hints of risk on. if you look at the sector level, energy did well, financials did well, small caps ended higher but it is the tech underperformance that is the big story. that is what dragged down the s&p 500, the nasdaq and much of it is coming from the chip space. it was the philly stocks index that led losses on the index level. joe: when you look at some of the names that fell, the idea that if you have these inflationary pressures and a stock with a high multiple, maybe that income promise down the road may not be as promised?

>> i think those kinds of fears and those conversations were percolating last week especially after the cpi. today, i think this is about chips and i don't think they are trading on inflation fears. it is more that we have this big shortage of chips that was initially pretty good for chips because there was demand, but now it has gotten to a point where if you can't build something, you can't sell it on that has dragged down the index for several weeks. caroline: a good day for amc and gamestop. people getting out of crypto and into stocks. is that reality? >> i'm getting deja vu because you did see amc up over 7%, after a 36% gain last week. if you look at gamestop come up over 12% today and part of the reason i'm getting deja vu because a lot of this is coming from social media.

i saw #squeezeamc was trending, there are posts about diamond hands on wall street bets. maybe stocks are cool again but we have been tracking this for the better part of a year now. we will be reporting this one out. caroline: you will be at the helm of that. katie, great to get your take. tune in to katie's new show on bloomberg quicktake. coming up, we continue the crypto part of the conversation. michael nova gratz will talk about volatility. this is bloomberg. ♪

joe: there were two big things people talked about coming into today, at&t's deal and cryptocurrency, specifically elon musk and his tweet and cryptocurrency. when does it end? caroline: we have been -- joe: we have been asking that for 10 years. bitcoin not looking great. there you see it, falling through the 100 day moving average, the blue line getting close to the purple line, the 200 day moving average. not that great. joining us for more is mike novogratz alongside son lali bostick. >> i know you had a record quarter, you announced today. you told our colleague that it coin is probably going to consolidate for a while. after bringing in almost $1

billion in profit, how do you keep that up if you also think bitcoin is coming in? >> listen, when i say consolidate, i think bitcoin will be somewhere between 40-55,000 for the next chapter four it builds up enough new momentum to take out the 55,000 and end the year higher. we are not all bitcoin. we are invested across the ecosystem. we have mining, we have a great venture business, we have a lot of nft's and virtual world bets. what we are trying to build his diversity. we look at the crypto ecosystem as thriving. i was on an earnings call, we are a growth business in a growth industry. total market cap of all crypto is about $2 trillion, that is half a percent of global wealth. i think it will be 2%, 3%, 4% in

the years to come. that is what galaxies bet is. >> how concerned are you about short-term volatility introduced by elon musk? >> musk is an important figure in american business. certainly in the global retail sector. he is an icon. he was great for crypto when he was positive for bitcoin. he caused some issues, i think when you take him at face value, what he said was he worries that as bitcoin uses more electricity, which it will, it could have a negative impact on co2 emissions. that is true for every industry. i looked today, youtube uses 2.5 percent of total electricity. we aren't going to say stop using youtube. we use it for things that provide value and i think you will see a response from the industry like you do from every industry, to say in this gap of time before all electricity is

green energy, which i think is seven or eight years away, we should do something to offset our footprints, and that is in banking, crypto, tack, industrial -- technology, and industrial. joe: does it bother you that the industry that you are part of, you are trying to make it respectable and you talk about group -- bringing crypto to wealth management and for inflation protection and for allowing people to make transactions in places where maybe they are more limited. is it problematic that one of the hottest currencies is a joke, doge, and elon musk the face of it all is lifting and -- people into that one and multiplying the jokes? and you have influential people talking about other jokes? does it make it harder to put on , basically make the case that this is a serious industry?

>> yes is the answer. i can tell you a better story. doge's cousin, shiba inu coin, gave one of the smartest guys in the space a giant amount of coins. he donated a bunch to india and donated -- and burned the rest. he said i don't want to play your games. i don't want to discredit the doge community. you are seeing a response to the mall and of the world and the frustration people have with the system. this young generation is said -- has said, we can create our own way of investing. some of it is frivolous and will and in tears, so we try to steer away from projects that don't have long-term sustainability, but it proves that communities can band together. the world has gotten very tribal . when you go on crypto twitter,

you realize how tribal it has gotten. one of my buddies makes a negative doge comment and he gets death threats. that is not good. but let's not miss the forest for the trees. underneath it, there is a huge revolution run by serious people trying to rebuild the financial market infrastructure. joe: you mentioned your investment in the d5 space. one of the cool things about that is the ability to make trades directly on chains who put together, lending on chain, is it a threat as a listed crypto company like yours, like coinbase, if people discover they can bypass regulated institutions and do everything they need directly? >> i tell my guys all the time, we are a bridge between the old way of doing business and the new. we might have to bite off our arm to grow a new one.

we are investing in those protocols. it won't happen overnight. there will be fa's who guide their clients. we spent a lot of money on a big custody business. i think that will be around for a long time. if it was just custody i wouldn't have bought it. we want to build new things on chains that we are excited about. part of galaxy is going to be iterated away like lots of the legacy financial systems. romaine: as we try to bridge these worlds, one question we get from a lot of people is, how can you be exposed to the potential upside in the crypto space, but maybe anchor it toward something that isn't the coins themselves, so about specific companies, whether you are talking about microstrategy or tesla or facebook or something, when you talk about exposure to the crypto space through that angle, what is the selling point? >> one reason we went public in

canada is just that, to give a holistic bet for people that can play the entire ecosystem. microstrategy is a great bet if you want to play bitcoin. and other bitcoin funds. we are the only public vehicle where you are playing the whole ecosystem at this point. the other way is having to buy an index of the d5 coins for a basket, a venture fund. for the public market perspective, there is not a lot of options. romaine: not a lot of options, but at the end of the day these people are looking for a way to tamp down the volatility or avoid the volatility we have seen. is there a way to do that, to edge the volatility out of the equation? >> one of the misnomer's is, if you are trading in a high asset, you have to have a lot of risk on. we tell people it is position sizing.

your first bet into bitcoin or ethereum, don't go leverage it. 2% or 3% bets even on a 20% drawdown, what have you lost? 60 basis points. that is painful but you aren't going to run out of the house with your hair on fire. a lot of this is about sizing. and diversity. we set this business up because we have diversity across businesses and styles and protocols. i think that should give us -- listen, we will still, if the market cap is not higher in one year, we will have a harder time. if it is much lower we won't have made a lot of money. >> what do you do today on a day that bitcoin has been seeing a slow bleed over the past couple days? a lot of rough headlines in the last week or so. are you buying or selling?

are you buying ethereum? what are you doing? >> i think 42,000 should hold on bitcoin so we are buying. we are selling volatility because in times when everyone gets nervous like today, volatility gets really high, so often selling volatility makes sense. we are looking across our portfolio. are there places that haven't reacted? mostly it is business as usual. we have investment committee meetings, new projects coming through the pipe, talking to customers and seeing what they want to do. we are building -- we have 200 people, we will have 400 by the time we settle and close with bit go. we are building a big industry that is not just a bet on bitcoin. joe: it feels to me in conversations like the enthusiasm around bitcoin from a few years ago, i'm hearing a lot of people get excited because

maybe they want a gateway to d5 and maybe it makes sense, the idea of smart contracts and cloud computing. is that your sense, that there are mainstream finance people who are seeing specifically, this is the way into crypto in a way that makes sense? >> it is certainly having a moment. probably for good reason. it is the base level or -- lever protocols that are programmable. it is the most decentralized by a longshot, has the most developers and projects built on it by a longshot and it has a triple whammy. it has payment coins built on top of it. it has defi built on top of it and nft's built on top of it. the three major thrusts of the crypto revolution are being built on top of the theory him. there are competitors that are

faster and process quicker and less decentralized. >> what is the next leg for ethereum, the next use case perhaps that will send it higher? >> everyone always -- ethereum went from 800 to 4000 in five months and people are like, how does it get higher? it has had a great run and people understand that. it consolidates for a while between 3000 and 4000 or 2800 even, that is probably pretty healthy. there are some technical changes coming to the if theory him protocol the summer which -- the theory him -- the ethereum protocol this summer. bitcoin is a finished product. ethereum is a work in progress but it has great momentum behind it. >> i'm curious.

people were excited about the banks. how much money has come in through the wealth fund? morgan stanley made that available. >> morgan stanley was the first to come out of the chute. i think all the other banks are coming. it is a process. i'm optimistic because in the morgan stanley case, they have thousands, thousands and thousands of fa's that had to take a course and learn to understand how to sell bitcoin, what bitcoin was to get a deep understanding of it. and now they are talking to clients. flows continue to come in. think about that. i was one of the lone wolves that you could talk about bitcoin with, and we inherited morgan stanley salesman who are sharing the gospel. i think you will see the same at goldman sachs and jp morgan.

they are growing in numbers at record pace. that can only mean good things. romaine: always appreciate you taking time to be with us, mike. mike novogratz, galaxy digital founder and ceo. coming up, a lot more to talk about. the big crunch. if you tried to buy anything, and hard drive, and mattress, a car, you name it, lumber, you are paying through the nose. that or you can't get one. one of the biggest supply crunches in recent memory, coming up. this is bloomberg. ♪

caroline: as we have documented come over the past few months of the global supply chain has been

constrained in many areas. most famously, lumber. our colleagues put out this really extensive piece that dug into all these odd next, whether it be a mattress company, or across the spectrum to the lumber yards. joe: there is literally nothing it seems that is not in shortage or bottleneck or delay in some way or another right now. there is a logistic manager's index, they have their own pmi which is cool, and it shows the stress levels. warehouse, inventories, stretched across the board. logistical nightmare, as the title says. joining us is our managing editor. tanks for joining us. the question is, when is this going to ease? we know about the shortages and the bottlenecks. are there any signs that things are smoothing out yet? >> thanks for having me. i'm so glad you brought up the

logistics managers index because it was my favorite part of that story. it was a u.s. economic indicator pulled together by a bunch of university professors and it has been unnervingly accurate at predicting what the supply chain going to look like in a years time. i think our story actually says it matches up with actual costs about 90% of the time, so instead of taking out a crystal ball and saying here is what is going to happen, in my opinion i will say that if you look at that gauge, of corporate supply chiefs that are asked about transportation, inventory, warehouse expenses, they are saying very little is going to change between now and 12 months from now. that is a pretty dire situation, considering we are seeing supply chain disruption nearing the worst levels in modern, in recent his early -- recent memory.

caroline: is it the consumer who feels it? >> it is everyone who feels that . the main consequence of all of these bottlenecks and the ensuing price spikes is that consumer prices are rising. we have seen that show up in well-known, better-known barometers like the u.s. consumer price index, which jumped in april by the most since 1982. every day, seems like a manufacturer of something is coming out and saying, we have to raise our prices, we have no choice. we have seen that from toilet paper to diapers to aluminum foil to burritos. at some point you are threatening your bottom line if you don't pass that along, but we are seeing it threatened the economic recovery itself around the world because costs are becoming prohibitive. i have spoken to some homebuilders that are putting things on hold despite demand skyrocketing because they can't guarantee they will have the raw

materials. caroline: such a fascinating story. we urge everyone to read the big crunch. that does it for what you miss? joe: bloomberg technology is next. have a great evening. ♪ wanna help kids get their homework done?

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