We are seeing a lot more activity, a lot more excitement also in the chain, and I think that shows customers are into crypto again.
We see retail interest again. We continue to see huge demand in crypto and tokenization in retail customers around the world.
So the crypto bulls gather in Singapore in search of the next big bet in digital assets. Welcome to "Insight."
We are live from Token 2049, the world's largest crypto and digital asset conference.
More on the crypto outlook from BitGo CEO, and we will speak with Franklin Templeton's crypto head, Christopher Perkins, as more institutions look to get into tokenized assets. JP Morgan's CEO, Jamie Dimon, weighs in on the AI safety debate, telling us exclusively that cyber security risks have gone up tenfold after Anthropic's Mythos model. AI disruption in focus.
Amit Zavery, president and COO at ServiceNow, will be joining us.
The RBI looks set to deliver its first rate hike today in over four years as rising inflation and a rupee near record lows force policymakers to shift gears.
Here is a look at how Asian markets are doing.
We are seeing a sea of red pretty much across the board, and that is on the back of elevated oil prices. The Iran situation has yet to be resolved.
We are also taking a look at how the MSCI AP is retracing gains.
One asset that we are tracking is actually Bitcoin. It is trending lower. It is above 80,000, a far cry from what it was before at a record high of 126.
But of course, it was just 50,000 about three months ago.
For more on the movers in Asia today, let's bring in our market reporter, Anthony Stephens. Anthony, what are you looking at?
As you have picked the perfect jacket for the day because it is a sea of red. And that is really determined by the reaction function turning.
The rotation is really coming out of the tech space. People are betting that the earnings bubble is kind of moderating, and you are seeing that in reaction to LG Electronics, which had a miss on earnings.
Whether you beat or miss, you have the same selloff. People are taking risk off the table across Asian tech, whether you're talking about Korea, Taiwan, Hong Kong, or Japan.
Flip the board and you can see this is spilling into some of the big caps, which are much more stable earnings territory. Hynix faces an earnings lockup that comes tomorrow.
In the meantime, people are taking money off the table. We will continue to see a selloff in Alibaba and Tencent. We saw those stocks trying to make a rally yesterday, and that has completely retraced.
And one potential reason for that could be the bunch of IPOs that are coming in Hong Kong in exactly the same space, and those are the much more fast-growing DeepSeek and Moonshot.
Singapore seeing some kind of downturn, and that is a big break from a market that has been rock solid all the way up. We get back to crypto.
What is interesting is that it cannot shake its correlation with broader risk appetite. We continue to see risk appetite being tied at the hip between crypto and the tech trade. It is one and the same for now.
Even though the legislation continues to roll through in the U.S. as tokenized trading gets closer to fruition, we have some reporting that legislation and lobbying in crypto has changed tact to try to get tactical wins, and we will see how that plays out.
Our next guest runs a digital asset infrastructure company which offers institutional-grade custody and prime brokerage services. Joining us exclusively, co-founder and CEO of BitGo. Good to see you again.
We just had my colleague Anthony talking about resistance in terms of the upside for Bitcoin. Why is that the case? How much tied is it to the macro environment?
It is very tied to the macro environment. In the last couple of weeks, we have seen a lot of this trading in the 83,000 to 87,000 band. It has not been able to break out above. A few short weeks ago, it was down in the 60,000 range. It is a volatile asset. We see it sway a lot. As the AI markets change, it does impact Bitcoin.
If you had to hazard a guess, where do you see Bitcoin trading at the end of the year?
I think it goes up from here. I think we are looking at a positive trend from where we are now.
You are making a big bet on prime brokerage. You are saying you would like prime brokerage to be 100% of your revenue. Can you explain that for us?
It's always been the case that that is where we are heading. BitGo is a company differentiated from others in that we took the time to build the foundation of what we did in exactly the right way so you can build and scale finance on top of it. There's a lot of rickety systems out there. We have seen a lot of failures over the last 10 years in this space.
At the bottom layer, what you need is safety in storage. So some people have confused our efforts to make sure that we have the absolute highest quality, absolute most secure wallets, followed by custody which is regulated around the planet. It takes years to get that. You cannot build prime brokerage unless you've got a sound foundation.
Go back to traditional markets, you don't think about custody and banking a whole lot. Digital will change those a bit by those foundations laid decades ago. We are now building financial products, advanced structured products, prime brokerage and more on traditional rails. It's been done for a long time, but in the digital rails, it is just getting there.
You are saying that competition from traditional players. How do you compete?
They don't know how to do digital. People are asking, are the markets blending? Is digital assets becoming traditional finance? I think it is a bit different. We started out in the space because we see an opportunity to do things differently.
There's nobody on the planet — raise your hand if you are delighted with your bank. Raise your hand if you are delighted with your broker. When all the banking sector profits are through the roof compared to where they've ever been in the past. Everyone in this room working very hard at their day-to-day jobs building businesses, bankers walking away with tremendous profits. That's the prime brokerage, that's the banking sector. We've got to change it. That's what BitGo set out to do. It takes time to build that.
They will be our partners, our clients.
When will you get to 100% revenue? Give us a timeframe.
An ETF wants to take Bitcoin, they want to hold it securely, but they don't do anything else with the asset, so you have to charge them for that. We make money on staking, on trading, on lending services. We can make a little profit out of that on the side as other people are making money.
Whereas people like to say we are custodian. A lot of the exchanges want to put us down into this custodial bucket, but we offer better trading than most of those exchanges that are around this room today. There is a lot of reasons why people try to paint us in that corner.
It's been about 10 months since you IPO'd. What has changed?
We are definitely more accountable. The purpose is after you sign up for the regular scrutiny — regulatory scrutiny, we had that for 10 years now. We want to make sure people can see every part of our business.
So the SEC oversight is a relatively small step, but it makes it so that anybody who is a fiduciary for their clients, in terms of money management, their shareholders, in terms of their company, they know they can work with BitGo. We can be a trusted entity. It opens up business.
We have got new reporting we've got to do, and that reporting is on a 90-day clock. The crypto market does not operate on a 90-day clock, so that's a bit of an overhead, an annoyance we have to deal with.
Are you rethinking your strategy because now you are a listed entity?
Not at all. This is a long-term play. We've got plenty more time to go. Build a great business, investors like it.
You reported a net loss, though. What is the strategy to get to positive?
Of course. We have a couple of things we want to do. You always want to have been and to the right are your profits. We are also trying to build a company that is going. You look at our key metrics, number of clients, we've got over 6,000.
It is the largest base of institutional clients anywhere in the world, bar none. You look at assets on platform on a normalized basis, excluding U.S. dollar volatility, and it is up every corner. We feel like the key metrics under the business are solid.
We are in this great wave where a whole bunch of institutions that have previously not been in this space at all, due to regulatory things, due to being conservative, whatever it may be, they are now coming into the space.
Whether you're talking about BlackRock, Fidelity, they have been around for a while, but Morgan Stanley, Charles Schwab, Citibank, all of these players are coming into this space, and that gives opportunity for us and digital assets.
We talk about how Bitcoin is susceptible to the macro environment. We have a high-yield environment which has impacted the appetite for risk assets. Is it impacting the way you do your business and the appetite for your services?
Yes and no. It does not affect the clients we already have. Probably what it does do is it affects the clients that are just coming into the space.
What we have seen over the last 10 years, institutions and clients are thinking about getting into crypto. They want to make money, of course. They are looking at digital assets on a particular swing, and if they think it is not going to be favorable in the short term, they will often lose their conviction and wait. They will be in later. Okay, that's fine, so maybe things take a bit longer.
For the entities, institutions that have already bought into digital assets, usually it does not affect them quite as immediately.
How are you looking at your expansion plans?
We just announced South Korea. We received our license. We have been working on it for 2.5, three years. It's a joint venture we did in South Korea with Hana Bank.
Yes and no. South Korea is a very interesting market. We are the first foreign-owned global company that has got a VASP license in South Korea, so we are very proud to be able to do that.
I think the relationship we built with Hana Bank has enabled us to do that. South Korea, like other countries around the world, tends to follow the financial regulation that happens in the U.S.
When I met with regulators and legislators a couple of years ago in South Korea, they are like, hey, as long as the U.S. is not positive on digital assets or whatever, it's going to be difficult for them to move forward.
The administration change, just less than two years old now, has not only had an impact on the U.S. but also pretty much every regulator and legislator around the globe because everybody is competing for who's going to win in digital assets.
You're also pushing for legislation with the White House. I am wondering if perhaps the industry is dictating too much instead of, you know, the regulators.
I don't think we are dictating anything. What do you think we have dictated?
Aren't you pushing your own interests as you push for legislation?
I disagree. We should have had clarity because clarity is market structure. It is a part of risk that most people don't understand.
If you look at market structure and the CFTC markets, the SEC markets, market structure isolates risk. There are certain things like counterparty credit risk. That's what took down Lehman Brothers. Custody risk. That could take down traditional markets.
So far, they have separated those things, but certainly taking out a lot of crypto changes in the last 10 years. The markets need to stay up all the time. The U.S. has the strongest capital markets bar none, and they have been resilient for 100 years.
All of a sudden, we're going to take these risks and put them into digital asset exchanges in ways that the market structure for non-digital asset exchanges has never allowed. I think this is a risk that the U.S. should be very careful about. We definitely want a market structure.
Unfortunately, the politicians got caught up in political stuff. Totally support ethics rules. They are supported for digital assets and stocks and commodities and every other type of asset. There is no reason to have ethics rules that apply to one asset and not all of them.
We have been complaining about insider trading in Washington for the last 25 years. Let's fix all that, I agree, but holding up market structure is going to put investors at risk.
We have to leave it there. Thank you. Co-founder and CEO of BitGo.
Still to come, the Indian opposition leader gets detained during protests over voter rolls. We will be live in New Delhi to discuss what is fueling that controversy. Keep it with us. This is Bloomberg.
Police in India's capital, New Delhi, detained opposition leader Rahul Gandhi during a Tuesday protest. Opposition groups want the chief election official to resign after more than 130 million names were removed from electoral rolls. It was pretty dramatic. We are talking about riot police here.
Absolutely. Pretty dramatic scenes yesterday in the central part of New Delhi, where we saw hundreds of leaders from opposition march towards the Election Commission of India seeking ouster of the chief election official. They have been demanding his resignation for the last few weeks.
Ever since there was a media report that said the chief election commission took decisions unilaterally on the voter lists. 130 million names have been removed from this controversial voter list, an exercise which has been going on since the last year.
Opposition leaders have been alleging that this exercise has benefited Prime Minister Narendra Modi's ruling party unfairly.
Recently, in the last few months ago, Modi's party won a key state in a surprise landslide victory. While it is not clear how much of this controversial exercise played a role in that, they say this exercise should be scrapped immediately.
We saw a heavy deployment of riot police. In some places, we saw police officers outnumber the protesters themselves.
You have got to wonder how this will impact the Modi government because we saw huge protests just two months ago from students.
Absolutely. This presents yet another challenge to the Modi government, especially in July we saw massive student protests over a leaked examination paper which led to the resignation of the education minister in the federal government.
This is yet another challenge facing the government. It has the potential to snowball into a bigger controversy and gives a major flashpoint to the opposition parties ahead of key elections next year.
We are going to see some seven, eight key elections, especially in the northern Indian state, which is one of the biggest states which sends the maximum number of parliamentarians. It has the potential to become a bigger headache for the Modi government going forward.
Following on that, given those state elections, do you think the BJP party might be impacted, or is it too early to tell?
I would say it is too early to tell. The protests have been gathering steam. The Congress party, which successfully led the student protests in July, they have said they will be protesting on October 10 on the same issue they have been demanding, the resignation of the chief election official. They say they will continue protesting until he renders his resignation.
We will have to see how the entire protest momentum, how it shapes up going forward, but definitely presents a big challenge to the government.
Bloomberg reporter on the latest developments in India, thank you so much for that. Meantime, India's central bank is widely expected to raise interest rates today. Our reporter joins us from Mumbai. What are we expecting from the RBI today?
As you mentioned, the first rate hike is expected today, the first time in nearly four years. Apart from that, there is an expectation that the RBI could change the policy stance from neutral to something more hawkish.
If that happens, that would signal there will be deeper rate hikes. Otherwise, the signal would be that the rate hikes could be shallow this time. That is because inflation is still within the 2% to 6% range.
In the December quarter, inflation will rise, and probably the RBI, which are two prods, will try to cap those price gains by hiking the rate now.
What else are we watching for in the policy statement?
There is an expectation that the RBI governor will spell out some measures about the liquidity absorption, so there could be some bond market, secondary market bond sales and FX swaps, etc. So those measures will be watched out for.
If that liquidity is kept in the system that has come because of the FCNR deposits, then that will be inflationary going forward.
I am just wondering whether a rate hike would support the rupee, which has been under pressure against a backdrop of a Fed that is also expected to raise rates.
After the Fed raised rates in September, the rupee actually came under intense pressure because the interest rate differential between the U.S. and India has shrunk to some 22-year low. RBI will also consider hiking rates so the interest rate differential is maintained.
Going forward, if the Fed hikes rates, that puts more pressure on the RBI to raise rates. It says we are driven by domestic factors like inflation and growth, but this Fed rate hike is a factor for the RBI for sure.
Bloomberg's South Asia economy and government reporter there. Now some other world news we are following.
President Trump says he will speak soon with Russian President Vladimir Putin to discuss a suspected case of plague. International concerns are growing over the death last week of a worker at an infectious disease research institute in Russia's Siberia region.
The 28-year-old died after developing severe pneumonia, with almost 200 contacts reportedly placed under observation.
Hundreds of French high schools were closed as teacher unions joined a student-led movement demanding better resources for education. The Interior Ministry says around 256,000 people joined demonstrations, including 56,000 in Paris.
Police used tear gas to disperse some crowds, with nearly 500 people arrested. The protests calling for education reform have spread nationwide since beginning last month in Paris.
Wall Street bonuses are expected to hit an all-time high, with trading and investment banking firms poised to deliver record earnings.
The New York State Comptroller says annual profit is on pace to exceed $90 billion comfortably, topping the record of 65 billion. Major Wall Street firms have already signaled record revenue, aided by market volatility and confidence in dealmaking.
Welcome back. You are watching Insight. Haslinda Amin. Jamie Dimon says cybersecurity remains his biggest concern as artificial intelligence creates new vulnerabilities. Dimon also weighed in on the massive investment needed to fund the AI buildout.
This conference used to be 20 people, now it is 2,000 investors and hundreds of companies from around the world, and it is a very positive sign of tech's ability to expand. It is not just Silicon Valley, it is everywhere.
And a lot of these companies, they are real, they are things that are going to help mankind for hundreds of years. Rates are going up. A lot of demand for capital. A lot of government financing. In my view, a little bit expected.
If it goes up higher, it creates risk if credit spreads gap, but it creates risk for all companies. Markets open and close, you know. There is no permanent state of affairs when it comes to markets.
We are seeing that increased competition for capital. Layering that on top of the forecast for the capex spent for AI, what is the potential biggest risk to that forecast? Is it the physical buildout? Is it the monetization? Is it the cost of capital? Is it something else?
