>> from the heart of where innovation, money, and power collide in silicon valley and beyond, 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. ♪

zero-commission trades for online u.s. stocks and etfs. and a commitment to get you the best price on every trade, which saved investors over $1.5 billion last year. that's decision tech. only from fidelity.

emily: apple is teaming up with goldman sachs to create a new high-yield savings account for apple credit card customers. the move living on the existing credit card partnership between these two companies. joining us now with more, who else but bloomberg's mark gurman? what have apple and goldman announced? mark: if you have the apple card on your phone, which all apple users do, and you have goldman, you will be able to generate interest on cash back rewards. emily: is this something you think will be popular? mark: i do.

i think this will be an entry-level free savings account built into your phone for many people. i don't think people are going to want to store a lot of money in this account, but the ability to generate interest based on cashback savings, between 1% and 3%, sometimes 6% on some apple products, i think will be interesting. apple has not said what the interest rate for this account will be. i do think this is a major push from apple, and it shows how far they are willing to go in financial services. emily: how did this fit into apple's larger fintech strategy? mark: they have in rebuilding their entire technical infrastructure, and this is a new piece of that. i have an apple pay later service coming. it all fits together.

apple wants to basically create the highbank -- the eye -- the ibank, and this is part of that. emily: appreciate it. coming up, we talk about the vc slowdown and how much is sitting in dry power on the cash dry powder on the sidelines at the moment. this is bloomberg. ♪

emily: welcome back to "bloomberg technology." while tech made a roaring comeback, part of the market to get left hind. ed ludlow here to tell us all about it. ed: e-commerce and online retailers. amazon was one of only 17 stocks that closed lower thursday. the rest were those higher multiple, pre-profit software companies we were talking about earlier in the show. i guess it is this 1-2. we are worried about inflation and how that will impact the consumer. etsy saw its biggest drop since june of this year. also looking at amplify etf, kind of a pastor -- basket of e-commerce stocks and gig economy stocks, at one point a

really deep 3% drop, but it pulled that back to close .3% lower. there's also a question about crime day two. you see amazon on the right-hand side of that chart, the big drop following the cpi print. it clawed its way back, but we are starting to hear noises about how that event went. they said 100 million plus items were ordered from partners. what does that even mean? they are not giving us a dollar value. we are not getting a sense of size and scope. we have that third-party data which basically showed consumers were cautious. they spent less money on much cheater -- cheaper items than perhaps they did in previous windows. i know that's not the picture amazon painted on our show this week, but sons are it was not as strong as perhaps we thought it would be and it was not that much greater than any other day for prime.

emily: thank you. i want to stick to the markets but from a private perspective. we have been talking a lot about the vc slowdown the past weeks, and there's new data to support that. pitch book is out with a new book on vc dealmaking, and the picture is mixed. let's bring in kyle stanford now for a deeper dive on this report. what does the data tell you about how the vc ecosystem is being hit by this? >> the data is showing a very complex picture of what is happening. at one end, you have see deals -- seed deals that have been very strong. on the opposite side of the spectrum, late stage has seen deal value plummet. deals are difficult to get done. as we move forward, we are looking to see how they are able

to respond. with the lack of ipo's, it will continue to be a difficult market, but overall, the core of vc has shown to be able to still get the deals done. emily: let's talk about the total money invested falling to a nine-quarter low. where do we go from here? kyle: i think again, we need to look at where that 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 really got inflated in 2021. as those investors have kind of old back, especially from a dollar value standpoint, that deal value has dropped really significantly. last year in mega deals, there's $200 billion invested and 80% of those deals included investment from private equity funds or public market investors, so when

we look at a deal value perspective, that is where the decline has come from. there's still a lot of dry powder out there, and a high number of funds ready to make investments. while those investors are probably taking a step back from the market and slowing the pace from what we saw in 2021, the deal value decline is coming from the very top of the market. emily: $290 billion in dry powder to be specific. how long do you think they will hold onto it? when will we see this money more meaningfully being invested? kyle: i think first of all, there needs to be some sort of certainty in market, right? or at least less uncertainty. interest rates are still rising. inflation is still extremely high. the area where the market is is still a little bit dislocated, so we will not really see a meaningful amount of capital come back until that deficit closes.

from a dry powder perspective, i think we should look at that as c and at an early stage that is not to support unicorns are ultra late stage that has come about the last two 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 it's the beginning of 2020 i think will be a big part of the deal count, especially moving forward. looking to markets to help relieve some of the pressure that has been created at the top of the market before we really expect any sort of both to come back. emily: i spoke with andrew yang earlier this week. obviously, he goes way back. founded venture from america, ran for president, has a lot of thoughts about the economy, and he think there is a long way down to go. take a listen to what he had -- what he had to say.

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

powder back in the market will have a lot to do with what goes on in public markets. lp's are very overbalanced right now. we have been putting a lot more money into private equity and venture capital the last few years. i think they are looking at their vc allocation is a little over baked. having those investors continue i think will be very important until we again see a little more certainty in the market, see interest rates stop rising, and inflation kind of start to lower and get to a sense of balance throughout the entire market. emily: thanks so much for sharing your thoughts here. appreciate it. coming up, what do blockchain and the commonwealth of dominica have in common? the founder of blockchain-based

protocol tron is up next. this is bloomberg. ♪

emily: time now for our crypto report taking a look at the recent agreement between the commonwealth of dominica and the open-source source blockchain-based operating system tron. the caribbean country has appointed the tron protocol as it designated national blockchain infrastructure. let's talk about that and more

with the ambassador and permanent executive of granada trade organization and the founder of tron. thank you for joining us. talk about this new deal. how did it come together, and what is the vision? >> sure. i believe this is a historic moment for both tron and dominica since this is the first time a blockchain protocol has collaborated with a caribbean government. tron has been a widely used blockchain infrastructure for almost four years now. today we have about 115 million users with a very big use case on stablecoin. this is the first time we have

collaborated with the government , and also at the same time, all the tron cryptocurrency, and all the stablecoin, tron has granted sellers and authorized digital currency [indiscernible] emily: what lessons are you taking from el salvador and the bitcoin legal tender situation there, which has had extra results? >> yes, i think dominica's move is definitely next level compared to the move of el salvador because in the el

salvador/bitcoin deal, it only accept bitcoin. i would take bitcoin as a very good source of value storage, but in terms of payment, stablecoin, and other new concepts come out, we need a smart contract platform. we need a new blockchain with much faster speeds, cheaper needs, and easy to develop on it, so that's why i believe we can definitely benefit dominican people with more power for blockchain and the web three technology. emily: given the state of the markets, i'm curious for your outlook. are you interested in or trying at all to invest in some of these distressed crypto assets?

for example, the celsius asset coming up for sale. >> yes, definitely. i think today is a bear market, so bear market is for buy. instead of buying other crypto assets and assets in bull markets, i think right now is a good time to buy crypto assets when everybody wants out. that is why i definitely believe there is some good opportunity in the markets now, but of course, with thorough due diligence, which is very important, and a 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 asset in particular? >> yes, i think we have done some due diligence on celsius before, but if we will move forward on this opportunity i think is still pending. emily: i'm curious about your role in another huge crypto exchange. i know you are an investor. what can you tell us about it, how competitive you think it will be, what the new owner plans to do with it, especially given china has basically banned crypto? >> yes, so, first of all, i have joined the company for almost five days now, so i started to get familiar with the policy we

are going to adopt for the future. i think right now, it has two major focus, one is the core value of the platform. we need to push hard on the platform token if we want to build it as one of the most important exchanges in the world. also, the second strategy is globalization, since, as everyone knows, it is very famous in china before, i think real success story in the next stage is definitely globalization, and also, 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: interesting that you think china's crypto policies will become more friendly. you are not an owner or investor, as i understand it, just an advisor. is that correct? do you own any hd tokens? >> yes, i own lots of tokens for sure. emily: what's a lot? how many? >> i would say tens of millions. i would say some of it i already owned before i became an advisor. i have used it since day one, when they first funded in 2013.

i started to accumulate ht on my own, but right now, i definitely see myself as one of the biggest ht holders. also, for will be -- for huobi, for cryptocurrency policy in china, i'm optimistic. since china is facing a big change, i think, in next month or two. i think after the new leadership , we will definitely see a lot of change in the economic policies, and even for lots of industry policy, and i believe crypto and blockchain is definitely on the table. emily: thank you for joining us, for sharing all of that. coming up, meta doubling down

on its vr ambitions with its new headset. what it could mean for adoption across the enterprise with an mixed reality pioneer, magic leap. ceo peggy johnson with me next. ♪

emily: meta doubling down on the metaverse, unveiling its newest virtual reality headset this week, seeking to transcend the notion that vr is primarily for gamers, but broaden the audience. joining us to discuss what that could mean is peggy johnson, the ceo of magic leap, nar venture founded back in 2010, before any of the -- before any of us thought this was really possible .

what are the takeaways from this announcement, aside from mark zuckerberg's avatar legs? >> basically, it is a validation of a decision magic leap made years ago focusing on the enterprise. the technology in its current state can apply in areas like health care, public sector, manufacturing, so it really is the right entry for the sorts of technologies. emily: the ceo of microsoft, where you spend a large portion of your career, appeared with mark zuckerberg, talking about bringing windows 365 to the quest, and microsoft is forming this industrial metaverse team, but do people really want to be working on excel spreadsheets in the metaverse? >> i do think that is some of the challenge. if the goal is just to take what we are doing on our tv screens and put it up in front of us in our as of, i think you miss the

real opportunity. augmented reality, you continue to view your physical world, and you intelligently place digital content in front of it, so if you are on a factory floor, you could put the digital twin of machine that has gone off-line on top of the physical machine and bring it back online much more quickly. emily: talk to us about the real enterprise opportunities that you see and what sectors you think will get the most traction. >> we have a whole list of interesting applications. one company does heart catheterization. they used to do it with surgeons watching the heart on a 2d screen. now, real time, they have imaged the heart in 3d. a surgeon can put it in front of their eyes and as they are threading the catheter through the heart, do it with more care, more accuracy, better

navigation, and better outcomes for the patient. another is a manufacturing company in the midwest. they are having a hard time keeping employees because of the acceleration of retiring three workers. they have been able to reduce their training time by about 80% using magic leap, also reducing rework and scrap by about 20%, so, really, two benefits, and new workers like the innovation. for the first time, they get to enjoy some of these digital tools that we all have as knowledge workers for years. emily: how far out is the industrial metaverse, if it's a virtual reality or augmented reality? how many years will it take before a significant number of people, businesses, are using this technology? >> that's an easy one.

it is here right now. you can realize it right now in these training cases and 3d utilization cases. that is what we are focused on at jake leap. emily: -- focused on at magic leap. emily: peggy johnson, thanks for sharing your perspective. that does it for this edition of "lumber technology." -- "bloomberg technology." i'm emily chang in san francisco. this is bloomberg. ♪

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