Marketplace - What does the crypto industry want?

Episode Date: November 11, 2024

Cryptocurrency firms are thrilled with last week’s election outcome. For them, a second Trump term means a friendly face in the White House. What do they want this time around? Surprisingly, some rules. Also in this episode: Beef futures are up, inflation stalls just above the Federal Reserve’s target, and we dig into how the National Institutes of Health spent $1.6 billion in federal funding for long COVID research.

On the show today, the crypto industry looks to cash in on its election bets, the latest on inflation, plus what the rise of AI means for climate investment. From American public media, this is Marketplace. In Baltimore, I'm Amy Scott in for Kai Rizdal. It's Monday, November 11th. Good to have you with us. Bitcoin continued its post-election rally today, hitting a record price of more than $87,000. The cryptocurrency industry spent millions of dollars to help elect pro-crypto candidates

this election, including President-elect Donald Trump, who promised to make the United States the crypto capital of the planet and whose family has a new crypto business, World Liberty Financial. Marketplace's Stephanie Hughes has more on what the industry wants in the next four years. Stephanie Huxley Coinbase is one of the largest crypto exchanges in the world. Paul Graywall is its chief legal officer and he is feeling good right now. The biggest winner last week was crypto. This comes after the Biden administration took a pretty aggressive approach to crypto.

Graywall says Coinbase would now like to see the new Congress pass new laws, including one that would clearly define what crypto assets are and who exactly is in charge of making the rules governing them. He says a lot of crypto companies want this. All of us are begging for sensible standards that would allow us to get back to building great products and services and spend less time and frankly less money arguing over legal definitions and statutes. Coinbase and another big crypto company, Circle, are also hungering for a law around stable coins. These are digital currencies. Their value is linked to an existing asset,

often a fiat currency such as the dollar. Circle issues stable coins that include digital dollars and digital euros. Dante Desparte is chief strategy officer and head of global policy for the company. He says a US law would mean existing international laws wouldn't dictate how digital dollars are regulated. Because for so many operators around the world, you know, the real missing link has been US legal and regulatory clarity. This desire for rules represents a maturing of the industry. After some in it have faced legal action, says Gil Luria with DA Davidson. I mean, I think early on in the crypto industry, people didn't want regulation because part

of the ethos was this decentralized, we can do whatever we want, wherever we want. And then people started going to jail and everybody realized, well, I can't actually do whatever I want whenever I want. Luria says rules will help those in the industry figure out what they can do because there'll be clearer laws to guide them. I'm Stephanie Hughes from Marketplace. On Wall Street today, green across the board. We'll have the details read on inflation. The Consumer Price Index

for October comes out on Wednesday. For each of the last three months, the CPI has been pretty consistent, rising by 0.2% month-to-month. Analysts are expecting a similar increase in this next report, which would mean the Federal Reserve's progress on getting annual inflation down to its target of 2% may be stalling out. Marketplace's Kristin Schwab has more. One month of weird inflation data is just one month. But Sean Snaith, who directs the University of Central Florida's Institute for Economic Forecasting, says a few months is eyebrow raising. This slowdown of progress towards the target rate become more of a feature over the course of this year

than some sort of statistical quirk. He says a slowdown isn't a terrible thing, but it's not a good thing either, which might have the Fed holding its breath. Bill English, a former Fed official, says usually at Fed meetings, we get an idea of what's in store at the next one. But last

week? You know, I don't think we really did. They left the door open to either cut further or not. The Fed seems to be uncertain about what they'll do. Financial markets seem uncertain too. And there's the uncertainty a new administration brings. New policies could shift the job market or inflation itself, which might give the Fed reason to pause. They're going to wait and see what the administration actually proposes and what gets through Congress

and so on. The other part of the Fed's dual mandate, jobs, has been a little confusing too. Raghuram Rajan at the University of Chicago says there are fewer openings and fewer people quitting. And that's something that has the Fed sort of convinced that we're moving in the right direction. Because it means wages are less likely to outpace inflation. On the other hand, unemployment is low, consumer spending is strong, all good for the economy, but... It extends the period over which the Fed has to keep rates higher. In other words, while the Fed is cutting right

now, it might have to cut at a slower pace. To make sure inflation doesn't stall but keeps coming down, I'm Kristin Schwab for Marketplace. Whatever we learn about inflation this week, one thing we do know is that beef prices have been going up. The price of cattle futures rose almost 10% between the end of August and the end of October. As Marketplace's Justin Ho reports, we can thank the usual suspects, supply and demand. Over the last few months, it's been particularly dry in cattle country.

The Western Dakotas, a large portion of Kansas and Nebraska, and most of Oklahoma. That's Naomi Bloom, senior market advisor at Total Farm Marketing. She says drought conditions affect cattle production because cows like to spend their waking hours grazing, and droughts mean less hay. So when you are in a situation like that as a rancher, you're going to limit the number of herd that you have because there's only so much feed available. Smaller herd sizes aren't the only factor pushing up beef prices. Glenn Tonser, a professor at Kansas State University, says production costs have

been rising too. Whether it is feed costs, labor costs, land rent, almost all of those entries are going to be higher than they were certainly before the pandemic. And while beef supplies have been dwindling, demand has stayed strong. Tonser surveys consumers about their meat consumption, and he says while people are trading down, buying more hamburger meat instead of steak, for instance, they're still buying beef. We've actually seen a small growth since February 2020 in that, and that's very consistent with the public wanting to keep meat in their diet and making some adjustments to pull that off.

There are a couple of factors that could keep a lid on prices. Naomi Bloom at Total Farm Marketing says cattle imports are up from countries including Australia, Brazil and Uruguay. And the weather could always improve. If we have good rains over the winter, if we have good snowfall over the winter and pasture conditions improve, then we could start to see the U.S. rancher want to and have confidence to increase their herd size. But even if that happens, Bloom says it would take years for any new meat to hit the market.

I'm Justin Ho for Marketplace. Nearly five years after the start of the COVID-19 pandemic, many are still struggling with the lasting effects of long COVID. And while the federal government has poured more than one and a half billion dollars into a long COVID research program at the National Institutes of Health called RECOVER, patients, advocates advocates and researchers have been frustrated with the progress. Marketplace's Samantha Fields has that story. When Charlie McCone got COVID in March of 2020, he was 30, healthy and fit. His doctors told him he'd get better in a couple of weeks, but he didn't. I found a Facebook group with thousands of other people asking what's going on. And I

was like, oh my God, this is happening to so many other people. It was already becoming clear then that COVID could cause serious lasting issues for people, including debilitating fatigue and brain fog. And because there was so much attention on COVID at the time, There was a lot of hope about the response to long COVID, I think, the first two years. especially once Congress allocated over a billion dollars to the National Institutes of Health for long COVID research in late 2020. There was, I think, this feeling that we're going to have answers here in a few years. Today, McCone is still sick.

He's not working anymore and can't walk much more than a block. Roughly 20 million people in the U. the US are now estimated to have long COVID. And that billion dollars NIH got for long COVID research has yielded few answers and zero approved treatment so far. There's been a lot of disappointment in terms of the program moving slowly and also focusing a lot on the kind of observational side of things.

Betsy Latajetz is co-founder of the Sick Times, a nonprofit news site focused on long COVID. She says most of the research money so far has gone into trying to learn more about what long COVID is. Rather than what many people in the patient community and also the research community really want, which is focus on treatments, clinical trials. There's good reason for that,

according to Dr. Serena Spudich. She's a neurologist and researcher at Yale who's working with the recovery program. There has to be a very, very strong urgency for finding treatments. And at the same time, we will only find treatments if we understand the condition properly. And understand what's causing the many different kinds of symptoms people are having. Long COVID is not one condition, and it's very, very possible, I would even say likely, that different forms of long COVID may actually be due to different types of biologic mechanisms that need different treatments.

Outside, researchers agree that these kinds of studies are critical, but some say the NIH didn't need to spend nearly a billion dollars on them. Dr. Ziad Al Ali at the VA St. Louis Health Care System says his team and others did similar research earlier in the pandemic. For peanuts, for literally a few hundred thousand dollars that generated evidence much more robustly, faster years ahead of recover,

for a small, small, small, small fraction of the funds. And at this point, more than four years in? NIH should be laser focused, laser focused on finding treatment for long COVID. That will be a bigger focus going forward. NIH got another $515 million this year for recover and says much of it will be going toward clinical trials. David Petrino, who does long COVID research at Mount Sinai in New York, says how the trials are designed will be critical.

What we need to be doing is rapidly testing as many drug targets as possible rather than taking big swings. Meaning, instead of putting all the funding into just a few big expensive trials of a couple of drugs, he says recover could do a bunch of smaller trials. For a couple million dollars apiece, they could be testing 100 drugs and they could be moving into more sophisticated clinical trial strategies. That is where I think we should be applying the money. Many long COVID patients are cautiously optimistic about this next phase of research, including

Charlie McCone. He now volunteers with a group called the Patient-Led Research Collaborative. The NIH can do this right. They have to do this right, and they need to do it fast, which we know is possible. But he also says no matter what comes of this current slate of funding, more is going to be needed.

Just because this first billion dollars didn't produce much does not mean the next billion and the next billion won't. Some legislators are already pushing for additional funding. They've introduced the Long COVID Research Moonshot Act in both the House and Senate. It would provide a billion dollars a year for 10 years for long COVID research. I'm Samantha Fields for Marketplace. place. Coming up... It's not a sexy part of keeping access for the public, but it is so, so important.

That's one way to put it, but first let's do the numbers. The Dow Jones Industrial Average gained 304.7% of finish at a record 44,293. The Nasdaq rose 11 points less than 1 tenth percent, and at 19,298. The S&P 500 rose 5 points, a tenth percent, to close at 60-01. Pharmaceutical company AbbVie dropped more than 12 percent after its experimental schizophrenia drug reported disappointing results in Phase II trials. Competitor Bristol-Meyer Squibb, whose own schizophrenia drug was approved

by the FDA in September, grew 10.5%. Health insurer Cigna shot up 7.3%. The company said it will not be pursuing a merger with rival Humana. Humana was down 2% on the news. Bond prices rose. The yield on the 10-year T-note fell to 4.30%. You're listening to Marketplace. Understanding personal finance can feel like an impossible task, but it doesn't have to be that way. I'm Janelia Esquinal, and on Financially Inclined, I'll guide you through simple money lessons that will change your financial future. Learn about credit scores, how to avoid scams, and why you need a savings account. Plus, we explore the brain science behind FOMO

and what you can do to make smarter money decisions. Listen to Financially Inclined wherever you get your podcasts. What do they say? More money, more problems, and way more questions from your kids, right? But not to worry. Million Bazillion, a podcast from Marketplace, has you covered. I'm Bridget Bodner, and with my co-host, Ryan Perez, we take you and your young ones on

grand adventures and comedic sing-alongs to answer all the questions your little ones have about money. Join us as we explain how banks work, why name brands are more expensive, and what happened to Black Friday sales. Listen to Million Bazillion wherever you get your podcasts. This is Marketplace. I'm Amy Scott. COP29 is underway in Azerbaijan. Leaders from nearly 200 countries are gathering for the latest international climate talks known as the Conference of the Parties. This year's COP is focused on finance, specifically how much money wealthier

countries will contribute to help developing nations cope with the climate crisis. Donald Trump's reelection raises serious doubts about how much the U.S. government will participate in global climate action in the coming years. And here at home, the transition to a cleaner economy is facing another challenge, declining interest from investors in climate tech startups. Reporter Michelle Ma wrote about it at Bloomberg. Welcome to the program. Thanks for having me.

What are we talking about when we talk about climate tech? Can you give some examples of the startups in this space? Well, climate tech is a really broad term and I think traditionally what you think of when you think of climate tech are, you know, solar, wind, renewables, things like that. But it's really expanded broadly to carbon capture technology, to green hydrogen, to nuclear fusion, and all sorts of new battery chemistries that are being developed every day. So it's really, really a broad sector. So a lot of opportunities to invest, but as you reported, funding for climate tech has been falling on track to drop about 50% this year.

What are some of the factors behind that? Number one, it's a very capital intensive sector. These are startups that are often not dealing with software. They're dealing with hardware, with massive facilities and factories that they have to stand up. And then number two is they're considered by some investors to be with massive facilities and factories that they have to stand up. And then number two is they're considered by some investors to be riskier than other technologies because they're still kind of in that early stage of development, you know,

just moving from the pilot, from the bench, from the lab to commercial scale, and in many cases still not yet generating any revenue. So there's a lot about all of these factors coming together that have made this year kind of a tough one for the sector. Now talk about the role that AI has played in this shift, because as you quoted one investor saying AI has sucked all the oxygen out of the room. What's going on there? Yeah, I mean, you know, compounding on top of all of these things I just mentioned, what we've

been seeing is the climate tech focused funds, they're still focused on climate because that's what they care about, but there's a lot of what we call generalist investors. Those investors have been told, actually we want you to turn all of your attention to AI this quarter. That's what we care about. That's the buzzy new thing. And, you know, climate tech briefly had a lot of attention from tourists or generalist investors, and today that attention has shifted to artificial intelligence. And of course, AI is extremely energy intensive. There's a little bit of an irony here. Is that actually going to do more damage as the money shifts from solutions to, you know, exacerbating factor in the climate crisis? That's an interesting question

that we've been asking so many people in the space and I feel like the answer is still not clear. Proponents of AI will say actually it's a good thing for the climate sector because AI is finally showing people that there is demand for clean power. All of these hyperscalers, all of these data centers require clean renewable energy and they want to meet their climate goals. But then on the other hand, you're seeing a lot of the opposite reaction as well, where AI is keeping natural gas online for longer than it would be otherwise, extending the life of fossil fuel plants that we might have shut down otherwise.

And it's also, in this case, some investors are seeing capital that could have been funneled towards climate startups going towards busier AI startups instead. So there's that bit of it too, where there's competing capital needs and AI is kind of sucking all the oxygen out of the room. Well, one thing I wanted to ask you about is you write that commercializing new technologies is expensive and risky unless favorable policy support can help bring down costs and drive demand. So with the Trump administration having another go, I imagine that policy support could evaporate in terms of federal dollars that are incentivizing investment in clean tech.

What do you think that could affect, that could have on investing? Yeah, that's a really tough one to say right now. I think it's too early to tell. A lot of people who are hopeful in the space will tell you that a lot of the clean energy projects that are being developed that depend on federal dollars, those are being built in red states and those are creating jobs in red states. And a lot of the policies that were passed, like the Inflation Reduction Act, were supported

by Republicans. At the same time, the best signs indicates that we have a very narrow window of opportunity to turn things around right now when it comes to climate. So now is probably the most critical time for the climate tech sector to scale. If those federal dollars disappear, if those tax credits disappear, that could make a huge difference in how much progress we're able to make or not make. All right. Michelle Ma covers climate tech for Bloomberg. Thank you so much. Thank you.

Thanks for having me. While control of the U.S. House of Representatives is up in the air as vote counting continues, the current Congress still has some work to do, like pass a bill to fund federal agencies. One agency bracing for cuts is the US Forest Service that's expected to get about half a billion dollars less than it requested. And on top of that, supplemental funding from the Inflation Reduction Act and the Bipartisan Infrastructure Act is about to expire. Wyoming Public Radio's Caitlin Tan looks at how a partnership at Bridger-Teton National Forest could be

a model. Caitlin Tan, National Forest Programmer, National Forest Taking care of a National Forest might seem like a job that involves beautiful mountain vistas and days spent on scenic trails. But sometimes the reality is more like this. It's going to be loud. So you're wearing it. Okay. Red Jones is in the smelly business of pumping public toilets. He and another worker are here to empty the campground outhouses in the Bridger-Teton forest. He peers into the bottom of a pit toilet. A lot of trash bags get thrown in here, a lot of stuff.

Bottles, cans, chew cans. Wearing thick rubber gloves, Jones manually fishes out the trash and then siphons about 2,000 gallons of waste into his truck's tank. This is an annual process for 62 toilets in the Western Wyoming forest, says Scott Kosiba, who heads up the non-profit,

Friends of the Bridger Teton. It's not a sexy part of keeping access for the public, but it is so, so important. A little over a year ago, the toilets at campgrounds and trailheads on the Bridger Teton were almost locked. It would have meant thousands of campers and hikers possibly using the woods as their bathroom, easily a public health hazard. This was absolutely a crisis situation. The federal government is limited by who and how it can negotiate contracts for work like pumping toilets. It was quoted about $120,000 for the job, which Koseba says would have bankrupted the Bridger-Teton's forest recreation budget.

We're talking no trails cleared. We're talking no, you know, campground hosts. The agency's hands were tied, but they were able to essentially hire the nonprofit, which could then contract out with other companies. They agreed to do the job at about a third of that $120,000. The toilets stayed open and clean thanks to workers like Rhett Jones. He shows off a remarkably clean campground outhouse.

These old fly nests that were in the corners, we've knocked them out, sprayed them down, get your windowsills, everything. Wow, I've never smelled such a nice port-au-potty. Wow. But it's not just toilets that need a little help here in the forest. There's a never-ending list for keeping up 3.4 million acres of public land. It exceeds our capacity pretty quickly. Mary Sernicek is with the Bridger Teton. She says friends of the Bridger Teton has also helped with fundraising, which a federal

agency can't do. That money can go toward fixing trails, campsites, roads. The Friends group also sends out outreach volunteers who warn visitors about bears and put out unattended campfires. We're no longer just the Bridger Teton National Forest trying to go at it alone. Cernichek is tight-lipped about looming budget cuts, but Kosiba, in his role, running the nonprofit, is not. The Forest Service is about to get its knees

cut out from under it financially. Which makes his group and volunteers even more important to the Bridger-Teton's future. It is astounding that a nonprofit has to exist to help fund and help support a federal land management agency. Meanwhile, D.C. lawmakers have, through December 20th, to hash out a budget, leaving the forest's future in limbo. In the Bridger Teton forest in Wyoming,

I'm Caitlin Tan for Marketplace. All right, this final note on the way out today, one more bit of context as world leaders gather at COP29 for climate finance talks. The International Chamber of Commerce is out with a new report estimating that climate-related extreme weather events over the past decade caused at least $2 trillion in global economic losses. The country most affected dollar-wise? The United States of America. Our daily production team includes Andy Corbin, Elise Hassan, Maria Hollenhorst, Sarah Leeson,

Sean McHenry and Sophia Terenzio. I'm Amy Scott. Hope to see you back here tomorrow. This is APN. What do they say? More money, more problems, and way more questions? From your kids, right? But not to worry.

Million Bazillion, a podcast from Marketplace, has you covered. I'm Bridget Bodner, and with my co-host, Ryan Perez, we take you and your young ones on grand adventures and comedic sing-alongs to answer all the questions your little ones have about money. Join us as we explain how banks work, why name brands are more expensive, and what happened to Black Friday sales. Listen to Million Bazillion wherever you get your podcasts.