announcer: this is bloomberg technology with emily chang. ♪ emily: this is bloomberg technology. coming up, what's old is new. and that goes for netflix, which is starting to look a lot more like traditional cable as it announces its ad supported plan to launch in november. plus, now you can turn any credit or debit card into a bitcoin rewards card thanks to the rewards app. we talk about the company's mission to make bitcoin more accessible to all with ceo alex adelman.

and, apple card users can see rewards automatically deposited into new accounts thanks to its extended partnership with goldman sachs. we talk about apple's continued fintech push. first, stocks roaring back from that selloff sparked by hot inflation numbers. how did tech fare? ed ludlow has been watching all day. ed: it a wild ride. the hot print from september reinforced the idea that the fed will remain aggressive with its rate hike paths. the market stayed sanguine when we look at volatility data like the cboe. the vix index, the market didn't seem to panic, surging back on the nasdaq 100. on the s&p 500, swings of more than 5%. 6% at one point. at one point, down by 3%. let's get technical. look at this bloomberg terminal chart. it was interesting.

technical levels did seem to play a key role. the benchmark s&p 500 at one point was down back below 50% below its post-pandemic rally. that 3500 level. that seems to have triggered program buying. in other words, the algorithms kicked into rebound the market. emily: let's dig into tech and how tech fayard. it has been absolutely dreadful. ed:ed: a few weeks, rates have been pushing higher. the philadelphia semiconductor's, you name it. they have underperformed the broader market. in this case, the s&p 500 as the benchmark for u.s. equities. you know the story, higher rates discount the present value of future profits. particularly the corners of the market that are trade stretch multiples for there is debate about how tech fares because

when we think about mega caps, microsoft and google, they are down more than 30% year-to-date. really trailing the s&p 500. there's also confidence that in a recessionary environment and if the fed goes too far with rate hikes, in the recessionary environment, and they get tech cap fares better because it has an entrenched market system. we are not seeing that play out right now, but there is the feeling that if we do move towards the word recession, you might see tech as a strong play. emily: we can't talk markets without talking chips. a huge week in the semiconductor industry. one that maybe they would rather forget. ed: philadelphia semiconductor's were higher thursday after five days of decline. it has been downtrodden. we have been talking all week about how there is a slowdown in consumer electronics. in other words, the end markets

where those chips go into. the latest news overnight was from tsmc, that cocked capital spending plans and that is a signal to the world of tech that is expected in a slowdown in demand for chip manufacturing. the other big story is this a ramp up in tensions between the u.s. and china. but we are on an upward trajectory for thursday and as we have shown on the screen, the stocks have underperformed to the broader market today. the question is, when do we bought him out? how much further does that have to run? emily: ed ludlow, thank you. netflix will reduce -- introduce an advertising supported plan on november 3, charging seven dollars a month for subscriptions. the streaming service hopes to attract price-sensitive customers at a time when growth has plateaued. joining us is chris palmeri, who helps us cover netflix.

how competitive would you say this price tag is? >> very competitive. this was a lot lower than people anticipated. seven dollars a month is one dollar below disney's eplus. one dollar below hulu. three dollars below hbo max. this is netflix putting a stake in the ground and saying, we are here to get more customers. emily: talk to us about the bigger picture and how this will play out. we are talking about a sea of streaming services. so many options in terms of where to get your content. is it really this price that gives netflix that much more of an edge? >> this is a big moment in the evolution of streaming. netflix's reed hastings file having ads on his service for he thought that not -- service. he thought it was a big

differentiator, and it was. we have now seen the whole industry of all towards having various options. hulu has built a multibillion dollar business with advertising. and potentially that will be the same as netflix. so, everyone now has these different plans getting consumers the option. the irony is that the streaming business looks a lot like traditional tv and on like traditional tv, you can't record shows and skip ads. you are forced to watch the ads. emily: our colleague -- has a new piece in bloomberg businessweek. the headline is "netflix's makeover is everything ted sarandos once hated." talk to us about just how different this is and ted sarandos and reed hastings' new vision. >> there are so many ways the company is changing.

basically everybody copied them. from disney to time warner, everyone came out with streaming services. we are seeing not just the ad supported things that reid didn't want, but they are cracking down on password sharing, which for a long time, they let anybody share passwords. we are seeing experimentation with the new knives out film which is going to be in theaters for a week a month before it comes out in streaming. we are seeing a lot of the changing in the old ways. and they have to change because subscribers were down. emily: do you think competitors will make moves as a result of what netflix has announced? if so, what? >> to some degree, netflix is playing catch up because a lot of folks already have ad supported services. we are seeing a real evolution of the streaming business. a lot more price competition, a lot more offers. all of these big media companies

are using traditional tv to promote their streaming services. they are putting some of their best shows on streaming first. this is a major right in the streaming wars for sure. emily: so, what is your outlook in terms of -- let's say, where is the streaming industry a year from now? we have been talking about espn, all of these potentially interesting and unique moves coming in the midst of a major market downturn. streamers are not going to be immune to that. >> no. and we have seen cutbacks in spending at netflix and all of the big companies. it is very clear that this is the way the industry is going. it is shocking, every week we have seen no evolution. nbc considering taking away an hour of prime time. big shows, dancing with the

stars, now exclusively on disney plus. look at ashley and saar only on hulu. we are seeing this massive migration before our eyes and that is not going to change. there is certainly going to be continued subscribers both in streaming, and hopefully as the industry grows and rationalizes spending, some profit as well. emily: chris palmeri. we will keep following your reporting on this great migration. another story we continue to watch, meta urged a judge to prevent the ftb see attempt to block the acquisition of a virtual reality app. meta says its claims are based on speculation. the ftc alleges meta would kill competition in a new market. the last time ftc brought such a case in 2015 involving sterilization technology. the agency lost. coming up, we are joined by alex

adelman, talking about the future of bitcoin and its promise in a volatile environment. this is bloomberg. ♪

♪ emily: can bitcoin become a global alternative currency? that's the bet of the bitcoin shopping rewards app lolli which just launched a new in-store earnings experience, giving

shoppers the ability to turn any credit card or debit card into a bitcoin rewards card. for more on how it means to launch this in the middle of major market uncertainty, i want to bring in alex adelman and alexis haley and. alexis, of course you are an investor in so many things, but lolli is so important to you. what is so unique about this in-store earnings experience? >> one of the things i have been obsessed with for my very first investment in court to promote which was coinbase back in 2012, is the user experience. something that lolli has pioneered is bringing accessibility in the form of cash back through online shopping to so many people. it just made sense, especially as the world has now moved out of lockdown to make it even easier for people to earn bitcoin simply going through their normal purchasing habits.

emily: alex, tell us how it works and how popular you expect it to be given that we are in a downturn and bitcoin is now back below 20000 and, you know, we've just got a lot of questions about the future. >> we are on a mission to save people money and that money happens to be bitcoin which is the best money in the world. we save people on average 7% on every transaction and upwards of 30% as we most likely go into recession, it is more important now than ever to be saving money at all of your favorite places. within the launch of this new feature, we went from 1000 merchants to over 10,000 merchants you can earn from. emily: alexis, what is your outlook on the markets now given what we are seeing across tech shares, crypto, the high inflation numbers.

jamie dimon says he thinks the market will fall another 20%. how are you thinking about where this is going and how is that impacting your business strategy? >> you hit the nail on the head. there's a lot of uncertainty. in a way, there are products that are countercyclical because they are offering opportunities for consumers to save money, they tend to do better in times of economic uncertainty. that is certainly factored into why we were so excited. broadly, the big advantage to being an early stage investor working with ceos from the start is that no matter what the macro picture looks like it is always a great time to be starting a company and almost more opportunistic during times of this kind of volatility and uncertainty. it sobers up a ceo to have to focus on making something people genuinely need and want and have

viable business models. it's not that i look forward to these times, but they bring out the best in new entrepreneurs who are solving real problems. and we have a lot of real problems that need solving. we are still active and busy investing and obviously i want to see this economy bet -- get its legs back. it is going to take time. emily: what are you telling founders right now? how are you telling them to navigate choppy conditions? >> keep cash on hand. focus on reducing burn. isolate your focus of the company around not just growth at all cost, but real scalable growth. focus on revenue. it is not going to be the story of how quickly or how much you grew in the next six months or a year, it's about how much you were able to accomplish with the money you had. ideally, get yourself in a cash

flow positive situation because then you are ultimately controlling your own desk the -- your own destiny. the companies that, ironically, don't need those outside sources of capital are often the ones who have the most look fundraising. we have really enjoyed seeing the trajectory of lolli and have doubled down. emily: alex, talk to us about how many people are using lolli, the demographics, and how they are actually using rewards. or, are they holding? >> we launched four years ago and have already brought on over 500,000 users. these are across web without workroom extension, and our new mobile app. a lot of users, where we are their first experience into crypto, that's what we want. we wanted to teach people about bitcoin and the importance of

this new world we are entering into, and save people money in the process. right now, some of the statistics, over 30% of our users are female. in 2018 when i was first starting with my co-founder, what we found was less than 4% of crypto users were female. we are proud to share that we are seeing a dramatic increase, given the nature of our business. emily: thank you for sharing. i am curious for your outlook on crypto in particular as the market downturn continues. bitcoin, we are seeing lower volume and lower volatility, but lower volume is kind of a red flag. what is your outlook for bitcoin and for the broader crypto market beyond startups and other places where you are investing? >> i have now been investing and

building through multiple the winters. this is the time when the very best products are getting builds, when a lot of the charlatans and height have exited the building. the folks who are left are genuinely solving problems. the next test for this cycle to get to the next spring, which will come, is going to hinge on user experience. we have an opportunity to really ask and the base of folks who are finding value in this technology. bitcoin rewards are one-way, and what is so interesting is we are also talking about the process of having lolli being your first crypto wallet. through an elegant user experience. e-commerce, or brick and mortar commerce, is something we all do. here is some cash back in the

form of cryptocurrency. i really believe five to 10 years outcome will be will see more cycles. this plays out all over again. every single time we hit a new level of folks who are bought in, who have found utility and value. i am long-term still very excited that there will continue to be volatility, but this is the exact time to be building. if you are a long-term believer in tech, everything is on sale and some great user experiences are going to get else. emily: last question, alex, if lolli is a gateway to this first while that for so many new users, so many women users, how are you playing out a potential lengthened crypto winter into your business? how long does this last? >> as alexis was saying, businesses that save people money do well in recessionary times.

our last company was acquired by -- which had its biggest growth years during the last recession. we think if we can follow that same path, save people more money and bring on more incredible merchants, continue to build new technology, we are going to do very well through this bear market. because people are coming into bitcoin and getting it for free, they don't have to risk investing in it, they are just shopping as normal and getting it back. it is a risk-free way of getting into crypto and continuing into dollar cost average into bitcoin. emily: we will continue to track your progress. alex edelman and alexis ohanian, thank you both. from crypto winter to spring, potentially. apple card users, get ready to start saving. details on their expanded

partnership with goldman sachs this is bloomberg. ♪

emily: apple is teaming up with goldman sachs to create a new high yield savings account for apple credit card customers. the move building on the existing partnership between the companies. joining us with more, mark gurman. what exactly have apple and goldman announced? what is new? >> if you have the wallet app on your phone, which all iphone users do, and the apple card which is a collaboration between apple and goldman sachs, you will be able to take cash back rewards and put it in a new savings account so you can create or generate interest on those cash back rewards. announcer: this is apple card. emily: is this going to be popular?

>> this is going to be an entry-level free savings account built into your phone. i do not think people are going to want to store a lot of money in the account, but the ability to generate interest between 1% and 3%, sometimes they have 6% deals i think is going to be interesting. apple has not said what the interest rate is going to be for comparison, marcus, the consumer high-yield savings account from goldman is 2.15% apy. i imagine apple will be around there as well. this is a major push and it shows how far they are willing to go financial services. emily: how does this fit into apple's larger fintech strategy? >> they have been rebuilding their entire technical infrastructure. this is a new piece of that. they have a pay later service cunning. they are -- longer-term. apple wants to own payments and

create the aii bank. emily: the ibank is coming. coming up from of the vc slowdown and how much is sitting in dry powder on the sidelines. we will be joined by kyle stanford. this is bloomberg. ♪

>> welcome back. while tech made a roaring comeback, one part of the market to get left behind. ed ludlow is here to tell us all about it. >> amazon was one of only 17 stocks the closed lower on thursday. the rest were higher marginal pre-profit. if this one-two punch we were worried about inflation and how that's going to impact the consumer. at one point, etsy closed down 9%. also looking at i buy or amplify etf ibuy which is e-commerce stocks and gig economy stocks. it had a 3% drop but it came

back to close 0.3% lower. there is also concern about prime day to. they said 100 million plus items were ordered from partners in crime early access. what does that even mean? they aren't giving us a dollar value. we are getting a size and scope of how this october did relative to the last window. we had that data that showed consumers were cautious, they spent less money on much cheaper items than they did in previous windows. i know that's not the picture that amazon painted in our show this week but the signs are it was not as strong as we thought it would be and it wasn't that much greater than any other date for prime. real focus on the consumer especially in the context of inflation. emily: thank you.

i want to stick to the markets. but from private perspective. we have been talking about the venture capital slow down and now there is new data to support that. pitch book is out with a new study and the picture is mixed. let's bring in the leave vc analyst at pitch book for a deeper dive. what does the data tell you about how the vc ecosystem is being hit by this? >> the data is really showing a complex picture of what's happening in the venture market. at one end, you have early stage deals that have been very strong. lower than 2021 but higher than historically. at the opposite side, late stage has seen deal value plummet. deals are difficult to get done because of the proximity to the public gets. as we move forward, we are looking to see how the late stages able to respond with the

lack of ipos, it will continue to be a difficult market. the core of vc has shown to still be able to get deals done. emily: let's talk about the total money invested falling to a nine quarter low. where do we go from here? >> again, we need to look at where the deal value fall came from. crossover investors and public market investors have pumped so much capital into the venture market, the expectation of what vc was got inflated in 2021. now investors have pulled back especially from a dollar value standpoint that deal value has dropped significantly very fast. last year and mega deals 100 million and larger, there were $200 billion invested and 80% of those deals included private equity funds or public market investors that had not

traditionally been part of the market. deal value perspective, that's where the decline has come from. is a lot of dry powder out there and a high number of funds ready to make investments. while those investors are probably staking -- taking a step back on the market, that deal value decline is really right now coming from the very top of the market. 1 -- emily: $290 billion in dry powder. how long are they going to hold onto it? when are we going to see this money be more meaningfully invested? >> there needs to be some sort of certainty in the market or least less uncertainty. inflation is still extremely high. the area where the market is as far as the expectation evaluations from founders and the needs of valuation from investors is still a little bit dislocated. we won't see a meaningful amount of capital come back until that

closes. from a dry powder perspective, i think we should look at that as seed and early stage. that is not meant to support unicorns or the altar late stage that has come about the last few years. $290 billion is a huge amount of money, but more importantly the high number of small investors in the market that have closed funds since the beginning of 2020 is going to be important for a deal count especially moving forward. we will be looking toward the public markets to help release some of the pressure at the top of the market before we expect any growth to come back to venture. emily: i spoke with andrew yang earlier this week. he goes way back founded venture for america, ran for president, has a lot of thoughts about the economy. he thinks there's a long way down to go. >> we have a ways to go on the

downslope. i certainly think that folks should try to keep some powder dry. make sure that you have enough cash to make it through for a little bit longer than you might. >> he is saying to keep powder dry for a longer time. how much further down do you think this slope goes? how do you think vc's are going to negotiate not knowing how long this is going to last? >> as far as, we do see a lag in data what we see what we are expecting in the narrative. even from right now, i would expect deal counts to continue to slide and deal values slide more for a few more quarters before it catches that to what we were talking about in the beginning of q4. as far as dry powder, getting

back into the market is going to have a lot to do with the public markets. lps are balanced right now. they've been putting a lot more money to private money and venture-capital now through public folios very much lower than they were. i think they're looking at their vc allocation as a little overweight. having this investors continue to hold onto dry powder, it's very important. we see a lot more in certainty -- uncertainty in the market. interest rates stop rising and inflation starts to lower to get to a sense of balance throughout the entire market. emily: thank you for sharing your thoughts. coming up, what do blockchain and the commonwealth of dominica have in common? the founder of the blockchain based protocol tron is up next.

this is bloomberg. ♪

emily: time for our crypto report looking at the government of the commonwealth of dominica and the decentralized open source blockchain based system tron. the company has appointed the protocol as its designated blockchain infrastructure.

let's talk to the the founder of tron. thank you for joining us. how did this agreement come together and what is the vision? >> i believe this is an historical moment for tron and the dominica and's is the first time a protocol has collaborated with a caribbean government developing the new digital currency infrastructure for the nation. tron has been a widely used blockchain infrastructure for almost four years now. today, we have 115 million users with a very big use case of stablecoin transactions among 5-10,000,000 dollars every day.

this is the first time we collaborated with the government. that designates blockchain infrastructure. at the same time, all the tron cryptocurrency including nft, jst and all the stablecoin has granted a status of medium of exchange. emily: what lessons are you taking from el salvador and the bitcoin legal tender situation there which has had mixed results? >> i think dominica move is definitely next level compared to the move of el salvador. because in el salvador, bitcoin

is only focused on bitcoin. i would take bitcoin has a very good choice for value storage, but in terms of payment stablecoin and all of the new concepts come out, we need a smart contract platform. we need a new blockchain which has much faster speeds, cheaper fees and easy to develop on it. that's why i believe we can definitely benefit dominican people with more power for blockchain and when three technology. -- web three technology. emily: i'm curious for your outlook. are you trying to invest in some

of these distressed crypto assets for example the celsius assets coming up for sale? >> yes definitely. i think today is a bear market. instead of like buying all the crypto assets and assets in the bull market with formal emotion, i think right now is a good time to buy crypto assets when everybody wants out. that's why i definitely believe there are some good opportunities in the markets now. but of course with thorough due diligence which is very important and the good understanding of the business in the first place. for tron and myself definitely right now we are ready for the opportunity now.

emily: are you interested in the celsius assets in particular? >> yes, i think we have done some due diligence such as -- with celsius. if we're going to move forward on this opportunity at think it still pending. emily: i'm curious in your role at another huge dough exchange. you are a huge investor. what can you tell us? how competitive will it be and what the new owner plans to do with it given that china has basically banned crypto? >> i am the advisor and i have joined the company for almost five days now. i need to get familiar with the policy that we will adopt in the

future. way to push hard on the platform. if we want to build it for the most part exchange in the world. the second strategy is globalization since as everyone knows this one is very famous in china. the real success story in the next stage is mobilization. we plan to go back to china once china has a better policy on cryptocurrency. i think it will be one of the

most important competitive exchanges out there when the time comes. emily: interestingly you think china's crypto policies will become more friendly. you are an owner or investor just in advisor, is that correct? do you own any ht tokens? >> that's yes i own a lot of ht tokens for short. tens of millions. some of them i owned for i came -- became the advisor. when huobi

first funded in 2013, i started to accumulate ht on my own. right now, i definitely see myself as an of the biggest ht holders. also for huobi definitely for the crypto policy in china, i am optimistic sense china is facing a big change in the next month or two. after the new leadership, we will definitely see a lot of change in the economic policies and even for lots of industry policy. i believe crypto and the blockchain is definitely one on the table. emily: thank you for joining us.

coming up, meta doubling down on its vr ambitions with its new headset request pro. what that could mean for adoption across the enterprise with mixed reality pioneer magic leap. the ceo is with me next. this is bloomberg. ♪

emily: meta is doubling down on the metaverse revealing its newest vr headset this week. seeking to transcend the notion that vr is primarily for gamers. joining us to discuss what that could mean is a pioneer in the space, the ceo of magic leap. nar venture it founded in 2010.

what was your take away from the meta announcement aside from mark zuckerberg's avatar legs? >> it's a validation of the decision magic leap made a few years ago to focus initially on the enterprise. the technologies in its current state will allow for -- in health care public-sector and manufacturing so it is the right entry point for the sorts of technologies. emily: the ceo of microsoft where you spent a long portion of your career appeared with mark zuckerberg talking about bringing windows 365 to the quest and microsoft is forming this industrial metaverse team. do people want to be working on expel -- excel spreadsheets in the universe -- metaverse? >> if our goal is to take what we are doing on 2d screens and put it up in front of us in our

physical world, i think you have missed the real opportunity. augmented reality, you continue to view your physical world then you intelligently place digital content in front of it. so if you are on a factory floor you can put the digital machine that has malfunctioned on top of the physical machine and get it back to working fairly quickly. emily: tell us what factors you think will get the best traction. >> we have an -- interesting applications one from a company that does heart catheterization. they used to watch the heart on a 2d screen but now real-time the image of the heart 3d. the surgeon can put it in front of their eyes and as their threading the catheter through their heart to do with more

care, accuracy, better navigation and better outcomes for the patient. another is an manufacturing company in the west. they're having a hard time keeping employees because of the acceleration of retiring through workers. they have been able to -- retiring factory workers. they have been able to reduce the time of on boarding new workers by about 80%. the new workers like the innovation. this is a pc on their eyes so for the first time they get to enjoy some of these digital tools that we have all had for years. emily: how far out is the industrial metaverse whether it's virtual or augmented reality? how many years as a to take before a significant number of people, businesses are using

this technology? >> it's here right now. you can realize are a wide right now in these training use cases in 3d's realization use cases and that's what we're focused on at magic leap. emily: good to have you back with us. thank you for sharing your perspective today. that does it for this edition of bloomberg technology. forget to check out our podcast wherever you get your podcast. this is berg. -- this is bluebird. -- this is bloomberg. ♪

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