May 22, 2025 • 20 mins
Asian shares posted a modest gain early Friday, after a rebound in Treasuries and the dollar eased some concerns about US fiscal policy. A regional stock gauge advanced 0.4% on gains in Japan, Australia and South Korea. US equity-index futures fluctuated in early Asian trading after the S&P 500 ended fractionally lower for its third daily decline. Treasuries steadied after rallying across the curve Thursday on moderating US fiscal concerns. We get market perspective from Eric Sterner, Chief Investment Officer at Apollon Wealth Management.
Plus - Bitcoin surpassed $111,000 for the first time, with traders increasingly bullish on the prospects of the original cryptocurrency amid mounting institutional demand and support from Donald Trump's administration. Bitcoin climbed as much as 3.4% on Thursday to hit a record of $111,980, before paring some of the increase. Smaller tokens also rose in a broad rally, with second-ranked Ether at one point up about 7.3%. We get reaction from Peter Chung, Head of Research at quant crypto firm, Presto Research.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:11):
Welcome to the Bloomberg day Break Asia Podcast. I'm Doug Chrisner.
So in the US session, we had equities losing a
bit of steam in the final minutes of trading. The
market finished little changed, was pretty choppy during the day,
and I guess you can chalk up the last moments
to some strong market on clothes selling pressure. We heard
today from FED Governor Chris Waller. He told Fox Business
(00:33):
the FED could cut rates in the second half of
the year.
Speaker 3 (00:36):
If we can get the tariffs down closer to ten
percent and then that's all sealed, done and delivered somewhere
by July, then we're in good shape for the second
half of the year, and then we're in a good
position as the FED to kind of move with rate
cuts through the second half of the year.
Speaker 2 (00:50):
Fed Governor Chris Waller. There elsewhere today we had bitcoin
breaking above one hundred eleven thousand dollars for the very
first time. And in a moment we'll look at the
crypto space. If Peter Chung, head of research at Presto.
But we begin this morning with markets joining me now,
Eric Stirner, he is the chief investment officer at Appollen
Wealth Management, Eric, thank you so much for taking time
(01:12):
to chat with me. Let's begin with a bond market
because in the prior session we saw a lot of volatility,
essentially a selloff, and a lot of this seemed to
reflect worries about the deadload for the federal government. Today
though a bit of recovery here in treasury prices. How
do you make sense of this?
Speaker 1 (01:30):
Yeah, well, thanks for having me. And it's interesting because
over the last several months, I mean, we've seen a
lot of volatility in the bond market as there's been
so many concerns about tariffs and deficits. We've even heard
someone go so far as to say treasuries are losing
their stats as a safe haven investment, and I think
(01:52):
that's going too far because there's really no replacement. But
certainly there's just a lot of different interpretations of what
this tax bill is going to do to our debt levels.
And you hear some predictions and projections from economics and
saying it's going to increase it to the levels we
haven't seen since World War Two, while you know, the
(02:13):
White House is telling us a completely different story. So
I think that's just causing a lot of volatility in
the bond market. And I think I think rates are
going to stay high, and as long as they don't
approach five percent, I think we'll be fine. I think
once you start seeing that ten year approach five percent,
that's when you see potentially some pullback into equity markets.
Speaker 2 (02:34):
So Chris Waller today was kind of addressing the teriff issue.
Was kind of interesting too that Jamie Diamond, the head
of JP Morgan Chase, was saying that he can't rule
out the possibility of stagflation. Now, Waller was talking about
the fact that maybe it's possible that we get trading
partners to settle at a terriffreight of around ten percent.
(02:54):
That sounds kind of inflationary to me, does it not?
Speaker 1 (02:59):
It will be initially, uh inflationary, But I believe Waller
has been one person in the FED who has really
gone out and predict that that these terrafs will be
transitory in nature. So we'll see, you know, a slight
increase in inflation, but then for it to settle down.
And we know the FED the word transitories a word
(03:20):
someone in the FED try to avoid because they use
that after COVID, thinking that once the supply chains uh
or addressed, that the inflation will go down. But this
is very different than what we experienced after COVID. After COVID,
we saw so much inflation because there was so much stimulus,
and physcal stimulus UH paid out, consumers had saved a
(03:44):
lot of money being locked down for a number of months,
and there's a lot of imbalance in the labor markets.
So I'm of the view I agree with what Christopher
Waller is saying that yes, we'll see some increases in prices,
but if you're paying more for one product, your consumers
are going to have less disposable income to pay for
(04:06):
other products, assuming there's no physical stimulus, So overall inflation
should be relatively teamed even through these terrafts, if, to
Waller's point, they settle in the ten percent range.
Speaker 2 (04:18):
The day's economic news was largely positive. We had US
business activity and output expectations improving. In terms of the
labor market, first time jobless claims at the lowest level
in about four weeks. Perhaps a little concerning the fact
that existing home sales unexpectedly fell to the slowest pace
I think at about seven months how are you viewing
(04:39):
the outlook right now?
Speaker 1 (04:41):
Well, I remain optimistic, but there's certainly some with some
caution because we don't know what the final outcome will
be of these trading negotiations. I think we all need
to get past that because the uncertainty is causing some
companies and need consumers to hold back on spending, even
(05:01):
some companies and initiating some hiring plans. But I'm of
the opinion that the one entity that that Trump President
Trump listens to is the stock market, is the bond market.
He doesn't want to put us into a recession. So
I think this is all high stakes negotiation. So once
we hopefully settle these these trade agreements soon in the
(05:23):
coming months, then then we have a lot to look
forward to between the tax cuts and deregulation, which should
provide tailwinds to the economy. And the labor market is
still very healthy, consumer spending is holding up at the
aggregate level. So I remain optimistic, but you know, certainly
we just need to get past this trade policy uncertainty
(05:46):
and then hopefully experience some of those tailwinds that I mentioned.
Speaker 2 (05:49):
So where are you finding opportunity in markets these days?
And if we can focus first on domestic markets.
Speaker 1 (05:57):
Yeah, sure. So within large cap you know, we do
want to tilt more into the quality factor. It's not
a complete risk on environment for the reasons I mentioned before.
So really companies with strong track records and strong cash
bound cash flows that could stand any potential economic slowdown.
(06:18):
But there are some sectors that, you know, traditional defensive sectors.
I think some clients may want to tilt a bit
more into until we hear the outcome of these trade negotiations.
Healthcare that had the highest earnings growth rate for the
first quarter, and we know between the weight loss drugs
and the aging demographics, there's a huge demand there for
(06:41):
healthcare and utilities. I mean utilities again another classic defensive play,
but because of the AI revolution, which I think we
all can agree we're in the early endings of there's
going to be enormous demand. I mean, if within utilities
over the past ten years, I mean the power demand
is growing, we know, grown one to two percent annually,
(07:02):
so very little demand there. But now with all these
data centers, and we're supposed to see a fifty percent
increase in data centers by the end of the next year.
The power demands expected to grow up to eight percent
over the next ten years. So while while you tild
these was traditionally a defensive play, I think it's part
of the AI offensive playbook right now. And then we're
(07:25):
starting to see the comeback of the mega techs. We
know those were the stocks that got hit the most
during the first few months of this year, first of
the news the deep seek and then of course from
all the fallout from Liberation Day. But like I said,
we're in the early endings of this AI revolution and
there's there's no stopping it. We know that's a huge movement,
(07:47):
is very competitive in the US trying to keep up
with China and these Magnificent seven companies they're earning growth
for twenty twenty five is still above all the other
sectors within the account. So those are some of the
areas that I like most for Germinder or the year.
Speaker 2 (08:04):
We were talking a moment ago about the volatility in
the bond market. How are you viewing the financials right now,
the big banks especially.
Speaker 1 (08:13):
That's another area that I do like within the financials
because once we get I keep on saying, once we
get past this tree uncertainty, But it's certainly a cloud
we have to get past. We expect M and A
activity to pick up because I expect at least two
rate cuts this year from the FED, and as interest
rates lower than we could see some more M and
(08:34):
A activity pick up. And that's only going to help
the bottom line of these big banks for Germinder this year.
Speaker 2 (08:41):
So, Eric, before I let you go, give me your
your sense of what's happening offshore right now and whether
you're seeing opportunity in markets, let's say, in Asia, Europe
or Latin America.
Speaker 1 (08:52):
Yeah, I think if you look outside of China, the
Asia ex China, as were many US companies are redesigning
their supply chains, there's norms opportunity for those emerging markets
within Asia. You know, Europe, We're starting to see some
come back there. The valuations are attractive and they're just
(09:14):
trying to keep up with the US, especially on this
technology front, and looking for their own movements for deregulation
and to increase their defense spending. So I do like
some of these opportunities with whether it's Germany or Asia
ex China. But I do believe for the remainder of
the year, the US will reclaim the leadership and we'll
(09:36):
see stronger returns out of the US than some of
these international markets. So I know that's international has certainly
gone off to a big lead on the US, but
I expect the US to make it comeback in the
second half of this year.
Speaker 2 (09:48):
All right, Eric will leave it there, Thank you so much.
Eric Stirner there. He is the chief investment officer at
Apollen Wealth Management. Joining us here on the Daybreak Asia podcast.
Welcome back to the Daybreak Asia Podcast. I'm Doug Chrisner,
(10:09):
and we moved to crypto next. In the States. During
the last session, bitcoin surpassed one hundred eleven thousand for
the very first time. We have seen increasing bollishness on
bitcoin given support from the Trump administration, and that in
turn is helping to foster greater institutional demand. Let's take
a closer look at what's happening in the crypto market
(10:31):
these days with our guest Peter Chung. He is head
of research at quant crypto firm Presto Research. Peter joins
us from Hong Kong. It's always a pleasure to talk
with you. Trump has turned from crypto's skeptic into what
appears to be one of the industry's biggest champions. How
would you say that his influence is moving the market
these days?
Speaker 4 (10:52):
Yeah. Trump has been very supportive of the industry, as
you all probably know, and I think I'm supportive of
most of the things he's done. You know, he he
announced he delivered on his promises, so he announced the
strategy bigcoin reserves, and then uh, you know, that's also
triggering the state governments in the US to to consider
(11:15):
implementing their own version of bigcoin reserves as well. And
then I think the state of Arizona recently actually enacted
a bigcoin reserve bill. But outside that, I mean, I
think the one thing that that I'm a little bit
kind of I guess nervous is uh, you know, whenever
he his family members kind of get involved in in
(11:38):
a lot of cryptop projects, including mean coins, and uh,
you know, I think the reason why I kind of
get concerned about it is because he kind of gives
his political opponents an excuse to uh slow things down
in terms of uh, you know, administration is trying to
do for the industry. And good example was I think,
(11:59):
you know, in recently the stable coin Bill was went
through some slowdown because I think the Democrats kind of,
you know, criticize some of the dealings that his family,
the Trump's family members are involved in. So I mean,
luckily we went, we overcame that, and then now I
(12:20):
think it's very close to being passed on the Senate.
But I think things like that could happen in future
if the family member continues to get involved in the
various dealings in crypto businesses.
Speaker 2 (12:31):
We've seen lately a recent surge in crypto exchange hacks
and some executive kidnapping attempts. That's put the industry I think,
a bit on edge and obviously increased interest in security.
Talk to me about the degree to which you're concerned
about these developments and how authorities may go about re
(12:52):
establishing a level of confidence in the overall infrastructure.
Speaker 4 (12:57):
Yeah, so it's crypto is a very nice and industry.
So there's a lot of building that needs to happen
in terms of infrastructures, and I think a security and
safety and things like that is an obvious, uh kind
of homework that the industry needs to do. And but
(13:19):
I think having said that, these sort of things has happened,
you know, in the traditional banking sector as well. We
just uh, you know, maybe don't hear about it too
often because you know, maybe it happens on a routine
basis and it doesn't make interesting headlines. So it's it's
it's expected from a very nat industry. What I can
(13:40):
tell you, I think is that the people in the
industry realize that these are the problems that needs to
be fixed, and then working very some very smart people
are working on solving these problems. So I think in
due course, I think we will have a safe and
sounding infrastructure for the industry to grow on.
Speaker 2 (13:56):
So what is the one area in the regulatory regime
you would like to see addressed right now?
Speaker 4 (14:03):
I think, I mean a lot of it I think
has to do with, you know, providing legal framework for
the industry to operate safely and in predictably. I think
what lack over the last few years is the regulatory
clarity on what's legal and what's not legal, what's allowed
(14:24):
and not allowed, and the last administration simply kind of
refuse to provide it, thinking that the you know, they
would give their you know, executive branches more discretion, empowered
to run things in the way they see fit and
a lot of that a lot of times were driven
by more by political motivations than anything else. So I
(14:47):
think it's good that we now have an administration that
wants to provided that regulatory clarity. Uh. And I think,
you know, some are coming from the executive branches through
in the in the form of executive orders, which are
in a eadier kind of way of dealing with it.
But some others are coming from a lot of legislative
legislative efforts in the Congress, and they obviously take more time,
(15:09):
but I think these will be stronger and former foundation
that cannot be removed that easily, even if after Trump
leaves the office. So these are all positive developments, and
I think we just have to be patient to have
these things to come into place and start to have
a positive impact on the industry.
Speaker 2 (15:27):
What about the level of institutional demand going forward, do
you expect that to increase right now or do you
think the major institutions may be a little bit more
cautious right now and there's a risk that they may
adopt more of a weight and see attitude.
Speaker 4 (15:43):
Actually, I think the events of the last few months,
you know, with all the kind of a market tomoil
and people talking about detail aisation trade. I think it's
actually I think it strengthens the argument for embracing digital
last and particularly bitcoin. I think what we've seen that
(16:03):
actually in the price sections over the course of the
last two months. You know, in April, when the all
the risk assets were selling off, the only two assets
that actually were doing well was gold and the bitcoin,
which you know is you know many people treated as
a disital gold. And also we actually even saw it.
(16:23):
I think it was earlier this week when the I
think it was two days ago that the twenty year
treasury auction was met with a very poor demand and
all assets tanked, but the bitcoin quickly rebounded and I
performed other risk assets. And I think it all kind
of as to the narrative of detail arization trade. Uh,
(16:46):
you know, in the aftermath of the Liberation Day terror
finouncement and also with the Moody's downgrade and all these
things that I think, uh uh strengthening uh this uh,
the argument for embracing more alternative reserve assets like a bitcoin.
Speaker 2 (17:03):
So beyond the world of kind of an asset class.
One of the things that was much touted at the
beginning of this kind of crypto revolution was the fact
that it could become a medium for exchange, that it
would be useful in actually conducting commerce. That really hasn't
happened to the level that the early proponents were projecting.
(17:25):
What accounts for that? How come there's been and I'm
not going to say it's been a failure yet, but
certainly there's been kind of this lackluster demand to use
bitcoin as a medium of exchange.
Speaker 4 (17:36):
That's very true, and it's very interesting that you asked
me that question on the day of Bitcoin Pizza Day.
You know, some people may know that, you know, the
people in the crypto industry is celebrate May twenty second
as a big cooin as a pizza day. Because I
think it was some ten years ago or maybe thirteen
years ago, somebody in Florida purchased the bigcoin in purchased
(18:01):
a pizza for ten thousand bitcoin, which was worth about
forty one dollars at the time. Obviously, ten thousand bitcoin
is now worth one point one billion dollars, so that
was one of the most expensive It was the most
expensive pizza. And I think that's what people who understand
bitcoin dynamics know that now is not the time to
(18:25):
use bitcoin as a medium of exchange, because you know,
we're at a very early stage of embracing this asset
as a stover value, and the medium of exchange part
of the money evolution only comes after that the stage
of adoption as a stover value comes to an end.
(18:47):
And so therefore I think, you know, medium of exchange part,
it's a very long term story, and it's as if
you understand that people will be very reluctant to spend
your bitcoin at the.
Speaker 2 (18:59):
Current So if you had to speculate on jurisdiction or
a geography where we would see early adoption using bitcoin
or any other crypto is a medium of exchange, would
it happen necessarily in Asia first in a meaningful way,
and then spread to other parts of the.
Speaker 4 (19:16):
World, Well, it's hard to say. I think medium Actually,
I'm not even sure whether the medium of exchange part
will ever come. But it's not a very important part
of the narrative for investing in bitcoin because the biggest
upside for the bitcoin price I think comes during that
(19:39):
first stage where people embrace it as a serve value,
and then any additional upside that comes as a result
of a medium of exchange adoption is going to be
very very small, so maybe it'll confirmation, but it will
come from other parts. But I think that's not something
that I think you should be overly concerned about as
(19:59):
an industry in bitcoin.
Speaker 2 (20:01):
Peter will leave it there. Thank you so much. Peter
Chung is head of research at the quant crypto firm
Presto Research. Joining here from Hong Kong on the Daybreak
Asia Podcast. Thanks for listening to today's episode of the
Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at
the story shaping markets, finance, and geopolitics in the Asia Pacific.
(20:24):
You can find us on Apple, Spotify, the Bloomberg Podcast
YouTube channel, or anywhere else you listen. Join us again
tomorrow for insight on the market moves from Hong Kong
to Singapore and Australia. I'm Doug Chrisner, and this is
Bloomberg
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:11):
Welcome to the Bloomberg day Break Asia Podcast. I'm Doug Chrisner.
So in the US session, we had equities losing a
bit of steam in the final minutes of trading. The
market finished little changed, was pretty choppy during the day,
and I guess you can chalk up the last moments
to some strong market on clothes selling pressure. We heard
today from FED Governor Chris Waller. He told Fox Business
(00:33):
the FED could cut rates in the second half of
the year.
Speaker 3 (00:36):
If we can get the tariffs down closer to ten
percent and then that's all sealed, done and delivered somewhere
by July, then we're in good shape for the second
half of the year, and then we're in a good
position as the FED to kind of move with rate
cuts through the second half of the year.
Speaker 2 (00:50):
Fed Governor Chris Waller. There elsewhere today we had bitcoin
breaking above one hundred eleven thousand dollars for the very
first time. And in a moment we'll look at the
crypto space. If Peter Chung, head of research at Presto.
But we begin this morning with markets joining me now,
Eric Stirner, he is the chief investment officer at Appollen
Wealth Management, Eric, thank you so much for taking time
(01:12):
to chat with me. Let's begin with a bond market
because in the prior session we saw a lot of volatility,
essentially a selloff, and a lot of this seemed to
reflect worries about the deadload for the federal government. Today
though a bit of recovery here in treasury prices. How
do you make sense of this?
Speaker 1 (01:30):
Yeah, well, thanks for having me. And it's interesting because
over the last several months, I mean, we've seen a
lot of volatility in the bond market as there's been
so many concerns about tariffs and deficits. We've even heard
someone go so far as to say treasuries are losing
their stats as a safe haven investment, and I think
(01:52):
that's going too far because there's really no replacement. But
certainly there's just a lot of different interpretations of what
this tax bill is going to do to our debt levels.
And you hear some predictions and projections from economics and
saying it's going to increase it to the levels we
haven't seen since World War Two, while you know, the
(02:13):
White House is telling us a completely different story. So
I think that's just causing a lot of volatility in
the bond market. And I think I think rates are
going to stay high, and as long as they don't
approach five percent, I think we'll be fine. I think
once you start seeing that ten year approach five percent,
that's when you see potentially some pullback into equity markets.
Speaker 2 (02:34):
So Chris Waller today was kind of addressing the teriff issue.
Was kind of interesting too that Jamie Diamond, the head
of JP Morgan Chase, was saying that he can't rule
out the possibility of stagflation. Now, Waller was talking about
the fact that maybe it's possible that we get trading
partners to settle at a terriffreight of around ten percent.
(02:54):
That sounds kind of inflationary to me, does it not?
Speaker 1 (02:59):
It will be initially, uh inflationary, But I believe Waller
has been one person in the FED who has really
gone out and predict that that these terrafs will be
transitory in nature. So we'll see, you know, a slight
increase in inflation, but then for it to settle down.
And we know the FED the word transitories a word
(03:20):
someone in the FED try to avoid because they use
that after COVID, thinking that once the supply chains uh
or addressed, that the inflation will go down. But this
is very different than what we experienced after COVID. After COVID,
we saw so much inflation because there was so much stimulus,
and physcal stimulus UH paid out, consumers had saved a
(03:44):
lot of money being locked down for a number of months,
and there's a lot of imbalance in the labor markets.
So I'm of the view I agree with what Christopher
Waller is saying that yes, we'll see some increases in prices,
but if you're paying more for one product, your consumers
are going to have less disposable income to pay for
(04:06):
other products, assuming there's no physical stimulus, So overall inflation
should be relatively teamed even through these terrafts, if, to
Waller's point, they settle in the ten percent range.
Speaker 2 (04:18):
The day's economic news was largely positive. We had US
business activity and output expectations improving. In terms of the
labor market, first time jobless claims at the lowest level
in about four weeks. Perhaps a little concerning the fact
that existing home sales unexpectedly fell to the slowest pace
I think at about seven months how are you viewing
(04:39):
the outlook right now?
Speaker 1 (04:41):
Well, I remain optimistic, but there's certainly some with some
caution because we don't know what the final outcome will
be of these trading negotiations. I think we all need
to get past that because the uncertainty is causing some
companies and need consumers to hold back on spending, even
(05:01):
some companies and initiating some hiring plans. But I'm of
the opinion that the one entity that that Trump President
Trump listens to is the stock market, is the bond market.
He doesn't want to put us into a recession. So
I think this is all high stakes negotiation. So once
we hopefully settle these these trade agreements soon in the
(05:23):
coming months, then then we have a lot to look
forward to between the tax cuts and deregulation, which should
provide tailwinds to the economy. And the labor market is
still very healthy, consumer spending is holding up at the
aggregate level. So I remain optimistic, but you know, certainly
we just need to get past this trade policy uncertainty
(05:46):
and then hopefully experience some of those tailwinds that I mentioned.
Speaker 2 (05:49):
So where are you finding opportunity in markets these days?
And if we can focus first on domestic markets.
Speaker 1 (05:57):
Yeah, sure. So within large cap you know, we do
want to tilt more into the quality factor. It's not
a complete risk on environment for the reasons I mentioned before.
So really companies with strong track records and strong cash
bound cash flows that could stand any potential economic slowdown.
(06:18):
But there are some sectors that, you know, traditional defensive sectors.
I think some clients may want to tilt a bit
more into until we hear the outcome of these trade negotiations.
Healthcare that had the highest earnings growth rate for the
first quarter, and we know between the weight loss drugs
and the aging demographics, there's a huge demand there for
(06:41):
healthcare and utilities. I mean utilities again another classic defensive play,
but because of the AI revolution, which I think we
all can agree we're in the early endings of there's
going to be enormous demand. I mean, if within utilities
over the past ten years, I mean the power demand
is growing, we know, grown one to two percent annually,
(07:02):
so very little demand there. But now with all these
data centers, and we're supposed to see a fifty percent
increase in data centers by the end of the next year.
The power demands expected to grow up to eight percent
over the next ten years. So while while you tild
these was traditionally a defensive play, I think it's part
of the AI offensive playbook right now. And then we're
(07:25):
starting to see the comeback of the mega techs. We
know those were the stocks that got hit the most
during the first few months of this year, first of
the news the deep seek and then of course from
all the fallout from Liberation Day. But like I said,
we're in the early endings of this AI revolution and
there's there's no stopping it. We know that's a huge movement,
(07:47):
is very competitive in the US trying to keep up
with China and these Magnificent seven companies they're earning growth
for twenty twenty five is still above all the other
sectors within the account. So those are some of the
areas that I like most for Germinder or the year.
Speaker 2 (08:04):
We were talking a moment ago about the volatility in
the bond market. How are you viewing the financials right now,
the big banks especially.
Speaker 1 (08:13):
That's another area that I do like within the financials
because once we get I keep on saying, once we
get past this tree uncertainty, But it's certainly a cloud
we have to get past. We expect M and A
activity to pick up because I expect at least two
rate cuts this year from the FED, and as interest
rates lower than we could see some more M and
(08:34):
A activity pick up. And that's only going to help
the bottom line of these big banks for Germinder this year.
Speaker 2 (08:41):
So, Eric, before I let you go, give me your
your sense of what's happening offshore right now and whether
you're seeing opportunity in markets, let's say, in Asia, Europe
or Latin America.
Speaker 1 (08:52):
Yeah, I think if you look outside of China, the
Asia ex China, as were many US companies are redesigning
their supply chains, there's norms opportunity for those emerging markets
within Asia. You know, Europe, We're starting to see some
come back there. The valuations are attractive and they're just
(09:14):
trying to keep up with the US, especially on this
technology front, and looking for their own movements for deregulation
and to increase their defense spending. So I do like
some of these opportunities with whether it's Germany or Asia
ex China. But I do believe for the remainder of
the year, the US will reclaim the leadership and we'll
(09:36):
see stronger returns out of the US than some of
these international markets. So I know that's international has certainly
gone off to a big lead on the US, but
I expect the US to make it comeback in the
second half of this year.
Speaker 2 (09:48):
All right, Eric will leave it there, Thank you so much.
Eric Stirner there. He is the chief investment officer at
Apollen Wealth Management. Joining us here on the Daybreak Asia podcast.
Welcome back to the Daybreak Asia Podcast. I'm Doug Chrisner,
(10:09):
and we moved to crypto next. In the States. During
the last session, bitcoin surpassed one hundred eleven thousand for
the very first time. We have seen increasing bollishness on
bitcoin given support from the Trump administration, and that in
turn is helping to foster greater institutional demand. Let's take
a closer look at what's happening in the crypto market
(10:31):
these days with our guest Peter Chung. He is head
of research at quant crypto firm Presto Research. Peter joins
us from Hong Kong. It's always a pleasure to talk
with you. Trump has turned from crypto's skeptic into what
appears to be one of the industry's biggest champions. How
would you say that his influence is moving the market
these days?
Speaker 4 (10:52):
Yeah. Trump has been very supportive of the industry, as
you all probably know, and I think I'm supportive of
most of the things he's done. You know, he he
announced he delivered on his promises, so he announced the
strategy bigcoin reserves, and then uh, you know, that's also
triggering the state governments in the US to to consider
(11:15):
implementing their own version of bigcoin reserves as well. And
then I think the state of Arizona recently actually enacted
a bigcoin reserve bill. But outside that, I mean, I
think the one thing that that I'm a little bit
kind of I guess nervous is uh, you know, whenever
he his family members kind of get involved in in
(11:38):
a lot of cryptop projects, including mean coins, and uh,
you know, I think the reason why I kind of
get concerned about it is because he kind of gives
his political opponents an excuse to uh slow things down
in terms of uh, you know, administration is trying to
do for the industry. And good example was I think,
(11:59):
you know, in recently the stable coin Bill was went
through some slowdown because I think the Democrats kind of,
you know, criticize some of the dealings that his family,
the Trump's family members are involved in. So I mean,
luckily we went, we overcame that, and then now I
(12:20):
think it's very close to being passed on the Senate.
But I think things like that could happen in future
if the family member continues to get involved in the
various dealings in crypto businesses.
Speaker 2 (12:31):
We've seen lately a recent surge in crypto exchange hacks
and some executive kidnapping attempts. That's put the industry I think,
a bit on edge and obviously increased interest in security.
Talk to me about the degree to which you're concerned
about these developments and how authorities may go about re
(12:52):
establishing a level of confidence in the overall infrastructure.
Speaker 4 (12:57):
Yeah, so it's crypto is a very nice and industry.
So there's a lot of building that needs to happen
in terms of infrastructures, and I think a security and
safety and things like that is an obvious, uh kind
of homework that the industry needs to do. And but
(13:19):
I think having said that, these sort of things has happened,
you know, in the traditional banking sector as well. We
just uh, you know, maybe don't hear about it too
often because you know, maybe it happens on a routine
basis and it doesn't make interesting headlines. So it's it's
it's expected from a very nat industry. What I can
(13:40):
tell you, I think is that the people in the
industry realize that these are the problems that needs to
be fixed, and then working very some very smart people
are working on solving these problems. So I think in
due course, I think we will have a safe and
sounding infrastructure for the industry to grow on.
Speaker 2 (13:56):
So what is the one area in the regulatory regime
you would like to see addressed right now?
Speaker 4 (14:03):
I think, I mean a lot of it I think
has to do with, you know, providing legal framework for
the industry to operate safely and in predictably. I think
what lack over the last few years is the regulatory
clarity on what's legal and what's not legal, what's allowed
(14:24):
and not allowed, and the last administration simply kind of
refuse to provide it, thinking that the you know, they
would give their you know, executive branches more discretion, empowered
to run things in the way they see fit and
a lot of that a lot of times were driven
by more by political motivations than anything else. So I
(14:47):
think it's good that we now have an administration that
wants to provided that regulatory clarity. Uh. And I think,
you know, some are coming from the executive branches through
in the in the form of executive orders, which are
in a eadier kind of way of dealing with it.
But some others are coming from a lot of legislative
legislative efforts in the Congress, and they obviously take more time,
(15:09):
but I think these will be stronger and former foundation
that cannot be removed that easily, even if after Trump
leaves the office. So these are all positive developments, and
I think we just have to be patient to have
these things to come into place and start to have
a positive impact on the industry.
Speaker 2 (15:27):
What about the level of institutional demand going forward, do
you expect that to increase right now or do you
think the major institutions may be a little bit more
cautious right now and there's a risk that they may
adopt more of a weight and see attitude.
Speaker 4 (15:43):
Actually, I think the events of the last few months,
you know, with all the kind of a market tomoil
and people talking about detail aisation trade. I think it's
actually I think it strengthens the argument for embracing digital
last and particularly bitcoin. I think what we've seen that
(16:03):
actually in the price sections over the course of the
last two months. You know, in April, when the all
the risk assets were selling off, the only two assets
that actually were doing well was gold and the bitcoin,
which you know is you know many people treated as
a disital gold. And also we actually even saw it.
(16:23):
I think it was earlier this week when the I
think it was two days ago that the twenty year
treasury auction was met with a very poor demand and
all assets tanked, but the bitcoin quickly rebounded and I
performed other risk assets. And I think it all kind
of as to the narrative of detail arization trade. Uh,
(16:46):
you know, in the aftermath of the Liberation Day terror
finouncement and also with the Moody's downgrade and all these
things that I think, uh uh strengthening uh this uh,
the argument for embracing more alternative reserve assets like a bitcoin.
Speaker 2 (17:03):
So beyond the world of kind of an asset class.
One of the things that was much touted at the
beginning of this kind of crypto revolution was the fact
that it could become a medium for exchange, that it
would be useful in actually conducting commerce. That really hasn't
happened to the level that the early proponents were projecting.
(17:25):
What accounts for that? How come there's been and I'm
not going to say it's been a failure yet, but
certainly there's been kind of this lackluster demand to use
bitcoin as a medium of exchange.
Speaker 4 (17:36):
That's very true, and it's very interesting that you asked
me that question on the day of Bitcoin Pizza Day.
You know, some people may know that, you know, the
people in the crypto industry is celebrate May twenty second
as a big cooin as a pizza day. Because I
think it was some ten years ago or maybe thirteen
years ago, somebody in Florida purchased the bigcoin in purchased
(18:01):
a pizza for ten thousand bitcoin, which was worth about
forty one dollars at the time. Obviously, ten thousand bitcoin
is now worth one point one billion dollars, so that
was one of the most expensive It was the most
expensive pizza. And I think that's what people who understand
bitcoin dynamics know that now is not the time to
(18:25):
use bitcoin as a medium of exchange, because you know,
we're at a very early stage of embracing this asset
as a stover value, and the medium of exchange part
of the money evolution only comes after that the stage
of adoption as a stover value comes to an end.
(18:47):
And so therefore I think, you know, medium of exchange part,
it's a very long term story, and it's as if
you understand that people will be very reluctant to spend
your bitcoin at the.
Speaker 2 (18:59):
Current So if you had to speculate on jurisdiction or
a geography where we would see early adoption using bitcoin
or any other crypto is a medium of exchange, would
it happen necessarily in Asia first in a meaningful way,
and then spread to other parts of the.
Speaker 4 (19:16):
World, Well, it's hard to say. I think medium Actually,
I'm not even sure whether the medium of exchange part
will ever come. But it's not a very important part
of the narrative for investing in bitcoin because the biggest
upside for the bitcoin price I think comes during that
(19:39):
first stage where people embrace it as a serve value,
and then any additional upside that comes as a result
of a medium of exchange adoption is going to be
very very small, so maybe it'll confirmation, but it will
come from other parts. But I think that's not something
that I think you should be overly concerned about as
(19:59):
an industry in bitcoin.
Speaker 2 (20:01):
Peter will leave it there. Thank you so much. Peter
Chung is head of research at the quant crypto firm
Presto Research. Joining here from Hong Kong on the Daybreak
Asia Podcast. Thanks for listening to today's episode of the
Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at
the story shaping markets, finance, and geopolitics in the Asia Pacific.
(20:24):
You can find us on Apple, Spotify, the Bloomberg Podcast
YouTube channel, or anywhere else you listen. Join us again
tomorrow for insight on the market moves from Hong Kong
to Singapore and Australia. I'm Doug Chrisner, and this is
Bloomberg
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