that 12.5 bitcoin is worth less because bitcoin is worth less. so we will see influxes and outflows of mining activities. depending on the price of bitcoin and how much is used. that said, they may have shifted over to light coin, another technology. depending how quickly and easily they can convert the hardware to operate on the systems. i am not clear if that is a reduction of energy being displaced on to another network. to wrap up, i am not too concerned about this. as you can see, there are 6 other major types of consensus mechanisms and there are other major ones that are listed. and they do not use the same system. they use electricity just like anyone using a computer. but it is not nearly -- you don't have the time to get into -- briefly, the bitcoin system, all the computers use hardware processing power. and they try to unlock a certain code. and these other systems, the mechanisms are different. so the second one, which is the second most popular called proof of state, the way it works is these computers when their bitcoin -- in the f

bitcoin has no use. it's purely a speculative asset that people that are holding on are completely delusional. this thing is going a lot lower. liz: andy, next ten years of bitcoin? >> i think more broadly, next ten years of crypto currency space will involve finding use cases, professionalizing and consumerizing, us seeing constitutional capital and users entering into the space at the same time consumers start to use these. it's an early product. there's a long way to go but a lot of smart people are working very hard in this industry. liz: let's come back, i want to come back halfway through next year, hopefully before then, and we can see the path and trajectory of this. thanks so much. 26 minutes before the closing bell rings. now the dow is down 565. we'll be right back. jardiance asked: when it comes to managing your type 2 diabetes, what matters to you? step up to the stage here. feeling good about that? let's see- most of you say lower a1c. but only a few of you are thinking about your heart. fa

it only costs like a dollar to move that five billion dollars in bitcoin but the interesting thing is that jackson palmer who does this excellent series of you know crypto analysis on his you tube channel he looked at this and pointed out something that's really important to look at and think about what is it coin and why you should hold it he said for those wondering so what about the. five billion dollars. in that mood and twenty five percent of supply of like wayne this means that if basis custodial mechanisms are somehow hacked twenty five percent of the entire light coin money supply which is four hundred twenty five million dollars worth would be in the hands of the hacker it also means that a significant number of users are not in control of their own private keys diminishing the value of using a crypto currency in the first place the money may as well be sitting in pay pal so this is an interesting topic especially now with the anniversary and the movement to have people take delivery of their keys the private key initiative as a way to thwart not only the risk factor but the

and why you should hold it he said for those wondering so what about this five billion dollars of bitcoin that moves on twenty five percent a supply of like coin this means that if basis custodial mechanisms are somehow hacked twenty five percent of the entire like coin money supply which is four hundred twenty five million dollars worth would be in the hands of the hacker it also means that a significant number of users are not in control of their own private keys diminishing the value of using a crypto currency in the first place the money may as well be sitting in pay pal so this is an interesting topic especially now with the anniversary of the movement to have people take delivery of their keys to private key initiative as a way to swart not only the risk factor but the derivatives risk of wall street using their naked short sells and other derivative just to manipulate the price and you could point that there is a lot of risk to this market but you know when we started covering big coin the entire crypto market in toto was maybe five million dollars that was it that was a total mark

as paul donovan wrote i come to bury bitcoin not praise that the evil of bitcoin lives on he wrote the bubble took from a large number of bubble buyers that money was given to a small number of bubble sellers this concentrates wealth and changes how money is spent people who lost money in the bubble suffer a negative wealth effect they may cut back on spending loss aversion no one likes losing money may make the spending cuts worse well it misses us no moral high ground to make any pronouncements whatsoever on the global economy or global banking system nor does any of these mainstream high street banks because they're all including u.b.s. been caught in major scandals money laundering scandals they've been bailed out u.b.s. was bailed out to the tune of billions of dollars and now there are to say this to pay because it's not going to bail out u.b.s. ok nobody's bailing out big point because down from the high is anyone there bailing it out no because it's it's anti-fragile this is just making it stronger every day that it goes forward manges stronger against the charlatans like u.b.s

>> bitcoin started off to be a digital currency.ntially become one, but the problem is as the first iteration of the decentralized entity that achieves scale, there is not a functional governance for bitcoin, so it really struggles to evolve. all they can really be -- it doesn't need to evolve to be a stored value. it needs to evolve to be digital currency. we think there will be digital currencies, governments will issue their own, but they will be pegged to the regular currency and degrade over time. nongovernment digital securities where you know how many dollars or whatever it is they will be, nobody knows how many dollars are going to be other than you know there will be more. ramy: final word for bitcoin? >> it has gone up. ramy: we will check back in with lou koerner in the next few years to see if it does go up. 79.5% ever since its record high in december 2017. jay powell may be getting a holiday invite which he would probably rather avoid. find out why the fed chair may have a lot to lose and little to gain, all that in a

the numbers are analogous to bitcoin.hat was going on at that time, in the late 90's everybody mathved this newfound called cash earnings, it was very popular and embraced to justify the valuations of all of these new companies. that didn't have anything else going for them other than the fact that they were.com wonders. most of them crashed. i don't know if you remember pets.com. that was one of them. the nasdaq which embraced all of these companies, particularly in 1999, crashed as well. all the way into the financial crisis. when the s&p in contrast had recovered. what we are seeing today in this year is very much to me resembling what happened back then in the dot-com bubble. >> it is always dangerous when people event new methodology for valuing things. i would take you back to 1999 to amazon. is there an amazon in the cryptocurrency world? >> amazon is very different because amazon had real sales and their sales were astronomical. --t is why the vamp valuation kept climbing because what people saw was growth. they c

they are bitcoin mediums, essentially -- bitcoin atm's essentially.some serious reporting trips for this. carol: check your neighborhood. there is probably a btm in your neighborhood. you can find more stories on businessweek.com over the weekend, so check that out. jason: and our podcast is available on itunes, soundcloud, and bloomberg.com. carol: we talked to many honorees on the list of bloomberg 50, and people to keep an eye on in 2019. jason: paul rabe, bruce linton, the ceo of canopy growth. carol: also, cathie wood of ark investment. jason: more bloomberg television starts right now. ♪ >> year on how has the brokerage , model moved on? we look ahead to 2019. more pain ahead for crypto in 2019. technical indicators point to more downside. but is regulatory framework a health or a hindrance? plus the regulation landscape , ahead. we talked through challenges for european financing of the new year, and what changes are on the table. welcome to "bloomberg markets: rules & returns." i'm nejra cehic in london. rules and the returns is at the

this was one year ago, bitcoin was flirting with 20,000.here was a lot of hype, a lot of wall street got interested in it. and it feels like that tide has retreated. this week, the prices were close to $3300. not exactly the same as $20,000. carol: can i say, you had fun with the cover as well. jason: don't overthink it, and the cue is the color. joel: exactly. carol: what i love about the magazine, and we will hear from our futures editor about the coverage this week, but you guys continue to undercover stories that we did not know about. i did not know about the one with btm. jason: undercover? uncover. [laughter] jason: uncovering undercover stories. joel: what we wanted to look at was all the different ways that crypto, that we can look at it as a topic. there is a story you will learn about about btm's, which is a form of atm's, but for bitcoin that has been involved in money laundering. that is a story i don't think anybody knew. jason: later in the show, we will dive deeper into cryptocurrencies with max chafkin and matt robinson. ev

coming up, is bitcoin dead? that is what we are going to be looking at in the latest edition of business week. and mike of galaxy digital is he giving us his take. this is bloomberg. ♪ guy: live from london, i am guy johnson. vonnie: i am vonnie quinn, this is bloomberg markets. after a tumultuous year, what is the state of crypto? we are sitting down with a key voice in the space. i'm not hearing anything. vonnie: take away. mike, he is the ceo of galaxy digital holdings. today is an auspicious day, the one-year anniversary of week that coin and the beginning of crypto plunge. you are a macro trader, this is the ugliest chart in history. but you are still a believer, why? >> we had a bubble, it pops, it had a monstrous connect -- correction. 90%, that's a lot. bitcoin is down 85%, there is correction. people are saying this is tulips, but it wasn't, this is a mania built on something real. the internet bubble felt like a mania and the internet changed our world. i see, because we are dealing with companies, i s

they are bitcoin mediums, essentially -- bitcoin atm's essentially. serious reporting trips for this. carol: check your neighborhood. there is probably a btm in your neighborhood. you can find more stories on businessweek.com over the weekend, so check that out. jason: and our podcast is available on itunes, soundcloud, and bloomberg.com. carol: we talked to many honorees on the list of bloomberg 50, and people to keep an eye on in 2019. jason: paul rabe, bruce linton, the ceo of canopy growth. carol: also, cathie wood of ark investment. jason: more bloomberg television starts right now. ♪ ♪ there's no place like home ♪ argh! i'm trying... ♪ yippiekiyay. ♪ mom. ♪ haidi: welcome to "daybreak: australia." i'm haidi stroud-watts in sydney. shery: i'm shery ahn. sophie: i'm sophie kamaruddin in hong kong. we are counting down to the open. ♪ haidi: zero the top stories we are covering. china taking more steps to ease trade tensions. let's talk about restarting purchases on american corn. nissan product or's plan to talk about ghosn.

his advocacy has earned him the nickname bitcoin jesus. >> bitcoin jesus.ng right now when i mention it. our guest is roger ver. he joins me on the streets of tokyo. thanks for bringing that december weather in tokyo. it has been quite chilly on the bitcoin markets. november was the worst , backmance in seven years when bitcoin was about eight dollars per going. now it is under -- coin. now it is under 4000. have we reached a floor? roger: nobody knows. >> what is your feeling? roger: i have a fundamentals investors so i am investing on fundamentals. long-term, the future is brighter than ever. of course i am incredibly bullish on the entire crypto point ecosystem and crypto cash -- bitcoin cash, specifically. a there was a ponzi scheme couple of months ago in japan that was undercover -- uncovered. has that undermine the legitimacy of cryptocurrencies? roger: the fact that hackers are time to hack it shows it's worth something. if it was not worth anything hackers would not waste their time. it's a more bullish signal that cryptocurrency is here for the lo

story.to the btm they are bitcoin mediums, essentially -- bitcoin atm's essentially.me serious reporting trips for this. check your neighborhood. you can find more stories on businessweek.com over the weekend, so check that out. jason: and our podcast is available on itunes, soundcloud, and bloomberg.com. carol: we talked to many on the list of the bloomberg 50, and people to keep an eye on in 2019. jason: paul rabe, bruce linton, the ceo of canopy growth. also, cathie wood of ark investment. jason: more bloomberg television starts right now. ♪ ♪ there's no place like home ♪ argh! i'm trying... ♪ yippiekiyay. ♪ mom. ♪ david: now when you are the head of the imf, do people recognize you? christine: it is a lot of ego food, which i take and store for the hard days. david: how did you get to be the head of the entire firm? christine: it is often in those situations that a woman arises. david: so with synchronized swimming, you became a member of the national team of france. christine: yes, but i did european championship and many international events. david: did you expe

do need tyou think we've seen tw for bitcoin going forward?o you think this -- we'll look back and say that was the low, the buying opportunity >> i think takit is a great buyg opportunity right now. could we go absolutely absolutely i think when we look back 24 months from now even 12 months from now, we will say why didn't i buy then >> i hope so i hone it is not why did i buy then as we are here sit being a year later spencer, always great to speak with you thank you. and quickly, dan -- >> i think obviously bitcoin was the first major use case and there will be peaks and troughs. so as far as i'm concerned, could it go lower? yeah i watched the money. followed the ecosystem there is a lot of very smart >>p xtysm.ing the ecoste une, final trades [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler.

we have this wonderful piece on btm's, bitcoin atm's.uely knew about, but -- carol: i didn't jason: and we will hear more in a minute, but give us a tease. max: i think everybody knows that crypto is useful if you're trying to hide dirty money. thati did not realize is there are these machines in pretty much every neighborhood in the united states and around the world used by shady characters and there are some crazy stuff that is just a straight out of true crime tv. i'm sure math will fill you in. carol: a great story. but what is interesting is that each of the stories takes into where regulators are. how companies in the sectors are trying to say it look at what these guys are doing. but i don't feel like you guys necessarily have a story dedicated to regulatory oversight because they are still finding their way. max: we have been waiting years and years for regulators to bless this, if they have not. it is hard to know exactly what it is, but the most obvious explanation is that there is still a lot of shady stuff out there. this te

there is a hydroelectric plant just idealfor mining bitcoins.ere is the temperature itself, it can drop to -40 temperature itself, it can drop to —40 year and the depth of winter, perfect for all of those mining machines. that is why when yuri's karaoke bar was struggling, his family got into the currency mining ina big family got into the currency mining in a big way. they are cryptocurrency pioneers here, that includes yuri's mamma, valeria. for this business, you do not have to be a great specialist because it is an easy system. you only need computers, electricity and the internet. valeria's miner is here at the family farm. there are gaps in the family farm. there are gaps in the vacuum vole where clients and removed their machines when the value of bitcoins crashed, but valeria has not abandoned her dream. i want the money i have earned myself and i want a lot of money. when the bitcoin is worth 1 myself and i want a lot of money. when the bitcoin is worth1 million dollars, like my son say, that i will be able to leave my grandchildren are

wouldn't surprise me if we popped down to 2,900 on bitcoin., that's what i'm looking at the next level. 28% does that help or hurt the convincing of institutional investors to get in this space >> i would have thought it hurt it but from the phone calls we're having, institutions are look, okay, this has gone through a bear market and didn't go away and we need to get exposure. bitcoin has done this about three times since inception. 2012-2013 and now 2017-2018. it is subject to these cycles. >> what is the break even right now for bitcoin? are we below that? >> it depends, right 5,900 was the high break even. that's why when you saw bitcoin below 6,000 a cascade of sellers and a lot of minors selling out. it appear nos now around 3,000 the break even and that's dependent on what your electricity costs are. if you're up in canada and getting 2 cents a mega watt hour, you might be okay at these levels >> thank you >> thank you for having me >> brian kelly capital >> bitcoin >>> the white house putting pressure on jay powell and the feds saying

bitcoin has down a whopping 80% from the highs a year ago.n a man at the center of the cryptocraze. president of the largest cryptoexchange asef great to see sfwlu good to see you too. >> i'm not sure the last time we spoke, bitcoin 14 k or 14 k kwab to a it was higher though what makes you think this is the start of a move higher that we'll see continue into 2019 when 2018 was so terrible after all the prognostications that it was a terrific year? >> yeah, look, if you remember about this time last year when when bitcoin was up near 20,000 we put out something at that time saying, hey, sometimes things get ahead much fundamentals effectively reminding people to take a hard look and see ifs in right for them or not and asking them to be careful and we got a lot of negative press for doing that but you recall we did that and i think it's the old adage are things are never as good as they seem. never as bad as they seem. to quote buffett, bee greedy when others are fearful. i think the amount of innovation that's happened in cryptocurrency in t

this story asked the question, will bitcoin recover? will it?m not clairvoyant, and that answer is way above my pay grade. all i can do as an observer is look at this and say what justifies the valuations that we see in the marketplace? and when it is difficult to find the answers, that's when you ought to be pretty cautious. emily: do you see bitcoin fitting into the broader story of volatility that is happening and tech volatility in particular? matt: yes, to the extent that when you have volatility you are saying there is a lot of noise. when there is a lot of noise there is a lot of confusion. of confusion a lot and a lot of noise, people have difficulty finding the signals, so where we are right now is the difficulty of finding the signals in so much noise and the noise only gets louder. emily: let's talk about the signals. where do you see value in bitcoin or cryptocurrency more broadly? is it in blockchain? matt: there are all kinds of excitement over blockchain because it is a technology, a tool that people can use and that in and of its

and stripe initially accepted bitcoin, but recently stopped.all concerned that stripe will be on the wrong side of history with that decision? >> we are absolutely open to revisiting this. at the time we made the decision, it was trending it was on the way towards being a store of digital value. i think that is a valuable thing to have existed in the world. i genuinely wish them the very best. it works less well for our case. this is one thing that where we are looking at the data. it was declining rapidly in uses of payment method. if it starts increasing again as a payment method, then sure, we great, we will go back. emily: bitcoin, cryptocurrency, is it hyped? reality, a bubble? >> our determination was that bitcoin was not a good payment method, which is a very different discussion then cryptocurrencies generally. emily: because the value was shifting dramatically? >> and because the speed and cost of posting transactions on the bitcoin network was the main thing. so we remain fascinated by cryptocurrencies from a technology point of view

meet marina — a babushka who mines for bitcoins on her siberian porch. money," she tells me. as those machines whirr and mine for virtual currency, marina has been converting that to real cash to top up her pension. it's no wonder she takes care of the things, she's travelled all over europe on the money. translation: they said to me, "marina, why don't you buy some mining machines?" i said "ok", and i don't regret it. the machines paid for themselves in eight or nine months. and marina's been putting the hot air from the machines to good use. "you can dry the washing here and make dry tomatoes, like in italy," she says. "the dried pumpkin is pretty tasty too." and she's not the only miner in irkutsk. you might not immediately think of siberia as a high—tech hub, but the conditions here are ideal for mining bitcoins. there's cheap power from a hydroelectric plant just up the river here, and there's the harsh climate itself — it can drop to —40 here in the depths of winter — perfect for cooling all those mining machines. that's why when yuri's karaoke bar

what better way to kick off a crypto currency special than by analyzing the top crypto bitcoin and with a bit coin want to one for those of us who still aren't quite sure how it works and there are quite a few we're going to hand you over to our g. correspondent trinity child is. one of the biggest financial stories of the past year has been the incredible rise and pullback of big corn but although many refer to it as a new type of asset or currency it's actually been around for the last decade and we're going to break down this crypto currency is history crypto currency is like bitcoin our currency is that allow people to paid their without involving financial institutions they are sometimes called digital currencies or virtual currencies but we tend to call them crypto currencies and although bitcoin was the first established crypto currency there were previous attempts at creating other online currencies with ledgers and secured by encryption like the money and big gold but neither of the two were ever fully developed but for big it all started in two thousand and eight when this pap

a, i love bitcoin and cryptocurrenciys. they're going to revolutionize the world. bitcoin is not going to be creating nearly as much greenhouse gases in the future as it does now because of things like the side chains and the lightning network, and i did explain that in more detail if people want to ask me questions because i'm going to get to my three minutes. and i'm also invested in power ledger and i'm invested in a lot of other -- and in supply chain tokens and things like that. and i want to start there. the conversation you just had shows that cryptocurrencies and supply chain and certification is not going to help you. you still to have have a certifying body when you put the lettuce in the box. that's not going to help. that applies in spayeds to carbon credits which are already bad and cryptocurrencies and blockchain is not going to help in carbon credits because you need a certifiers there, and we've got certifiers there, and it's not working, so i would recommend against that type of thing. so you're asking for use cases -- well, another thing that need

a bitcoin etf will get approved in 2019, but it won't be in the first half of the year.will just have to wait and see on how that comes through. emily: eric ervin, thank you so much for joining us today. china's tech goal shifting, and is president trump the reason? we will, next. this is bloomberg. ♪ emily: this is "bloomberg technology." it is no secret that one of president trump's aims is to make sure china doesn't become the global -- global leader in tech. he may be getting his wish. china is considering delaying its black ship made in china 2025 initiative. robotics, aerospace, and renewable energy. china may be focusing on more industry strand -- industry standards. siegel, whats adam is your interpretation of this? adam: i think we are likely to see a very temporary change of china's description of the policies and not a real change in actual policy. as you mentioned at the top, china wants to move up the value chain and wants to be a technology leader, and it is not easily going to give up those goals. emily: what does this actually mean? beijing is ahat master

meet marina, a babushka who mines for bitcoins on her siberian porch.ke me money", she tells me. as those machines whir and mine for virtual currency, marina has been converting that to real cash to top up her pension. it's no wonder she takes care of the things. she's travelled all over europe on the money. translation: they said to me, "marina, why don't you buy some mining machines?" i said "ok", and i don't regret it. the machines paid for themselves in eight or nine months. and marina's been putting the hot air from the machines to good use. "you can dry the washing here and make dry tomatoes, like in italy", she says. "the dried pumpkin is pretty tasty too." and she's not the only miner in irkutsk. you might not immediately think of siberia as a high—tech hub, but the conditions here are ideal for mining bitcoins. there's cheap power from a hydroelectric plant just up the river here, and there's the harsh climate itself, it can drop to minus a0 here in the depths of winter — perfect for cooling all those mining machines. that's why when yuri's kar

>> last year it was bitcoin. >> last year it was bitcoin, this year it's the market. >> i've been doinghis a long time for retail investors, when you get into the crazy periods in the market, people tend to not open up statements >> everyone checks online, right? >> i think people love to check online when things are good. that's the bull market greed sense. when you get into these levels of anxiety an fear, people say it's way too stressful for me to go online. i just won't do it today i'll wait until an update. >> do they liquidate their portfolios >> no. >> one thing we've looked at, we have not gotten the gmo calls yet, the get me outs that's when you know you're close to a bottom. we are getting should i get out. that the where there's a lot of coaching our clients are high net worth individuals so we're not getting any of the gmo calls yet that would be a positive sign that we're in a bottoming out >> do you think when people look at their statements, if they're waiting until they're forced to in january that there will be a negative feedback loop >> certainly can be. they overrea

one year ago next week, you guys launched the first bitcoin futures. there are all the black helicopter ideas out there. there's an outfit blaming you guys saying you guys are printing paper bitcoins, there is only supposed to be 21 million in bitcoin out there and it used to be 19,000, this is your fault it's only $3305. listen, i look at this as saying you guys just opened a window and brought the sunshine in on where this thing would find its water level. what do you say to that? >> well, you can take any market to any price when there's only one side of the trade. that's exactly where crypto currencies were. there was no way to create a two-sided market because there was no ability to short the market. there's no market that's going to be sustainable unless you have both sides of the trade on there. bitcoin launched, obviously there was a sentiment other people thought it was overvalued and they appear to be correct right now but when you look, we are trading roughly 3600 contracts a day. this is not like we are trading millions of these things a d