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A Festivus Miracle: AI, Tech, & Crypto in 2026 12/23/25
00:34:36
Ahead for AI and tech: commoditization and consolidation. CNBC’s Steve Kovach and former Facebook Chief Privacy Officer and General Counsel Chris Kelly map out the road ahead for tech’s most innovative companies. After a volatile year for crypto, investor Anthony Pompliano discusses asset prices and Coinbase’s latest acquisition of a prediction markets platform. Plus, Jim Beam has stopped bourbon production at its Kentucky facility for the next year, and the Kansas City Chiefs are moving. Happy Festivus! Steve Kovach - 17:54 Chris Kelly - 23:21 Anthony Pompliano - 31:45 In this episode: Anthony Pompliano, @APompliano Joe Kernen, @JoeSquawk Andrew Ross Sorkin, @andrewrsorkin Cameron Costa, @CameronCostaNY
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- [00:00]
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- [00:12]
Andrew Ross Sorkin
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- [00:35]
Podcast Host / Narrator
This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, what's brewing for tech and AI in 2026 from commoditization to consolidation to competition. Facebook's former general counsel and chief privacy officer Chris Kelly joins us.
- [00:55]
Chris Kelly
I do think that you'll see a number of Chinese players come to the fore that especially if the Nvidia GPUs that are being sold to China now come online.
- [01:05]
Podcast Host / Narrator
Then what awaits in 2026 trading after Coinbase's newest prediction markets acquisition? Professional Capital Management's Anthony Pompliano says it's all about, well, everything.
- [01:17]
Anthony Pompliano
One of the things that's really interesting is they're going after this Everything exchange. They basically want you to be able to buy public stocks, crypto prediction markets, perps, everything on one exchange.
- [01:27]
Podcast Host / Narrator
Plus a WeGovy pill has been approved. Jim Beam is halting bourbon production in Kentucky for an entire year, and the Chiefs will have a new home that's close to home.
- [01:38]
Joe Kernen
Did you know that Missouri and Kansas were on opposite sides in the Civil War circuit?
- [01:43]
Andrew Ross Sorkin
Which is weird that I did not know.
- [01:46]
Podcast Host / Narrator
It's Tuesday, December 23rd.
- [01:49]
Joe Kernen
Happy Festivus Christmas, Adam. The day before, the night before Christmas.
- [01:53]
Andrew Ross Sorkin
We'll get you a mocktail.
- [01:55]
Podcast Host / Narrator
Squawk Pod begins right now.
- [01:58]
Andrew Ross Sorkin
Stand Andrew by in 3, 2, 1. Q. Andrew Good morning and welcome to Squawk Box, right here on cnbc. I'm Andrew Osorkin along with Joe Kernan. What are we a day? We're now we're a day before Christmas Eve. Can you say that? What would that be? That would be the Eve of Christmas Eve.
- [02:18]
Joe Kernen
Christmas Eve.
- [02:18]
Andrew Ross Sorkin
Joe, Is that Christmas Eve Eve? So we're on the Christmas Eve Eve. Becky is off so celebrating Christmas Eve Eve. She'll be back a little bit later next week, but we've got a lot going on this morning.
- [02:30]
Joe Kernen
Shares of Danish drug maker Novo Nordisk are jumping. Yep, you might have a pill of Wegovy. The FDA approving the company's weight loss pill. Novo Nordisk says starting Doses will be available early next month. It's cheaper, there's no needles. It contains. The pill does semi glutide or semaglutide that is the same, that is the active ingredient in injectable Wegovy and Ozempic. In a more than year long study, participants who took 25 milligrams of it orally once a day lost an average of more than 16% of their body weight versus under 3% for those that were on a placebo. The pill will be sold under the Wegovy brand name. It won approval for chronic weight management in adults who are overweight or have obesity and at least one health related health condition. And Novo Nordisk shares have struggled over the past year as it has faced increasing competition from Eli Lilly. And this may not last too long being the only one because Lilly's weight loss pill could be approved as soon as March. So that's what I said. I mean, I really did think about it, Andrew, because I was, you know, I'm not going to use a needle to do it. I was thinking, wow, cheaper, like 100 bucks a month or something is what it costs. And just take a pill and I don't know, I like to eat. I don't want to lose my.
- [03:58]
Andrew Ross Sorkin
But I don't think it changes your sense of the love of the game or the food or the taste. I don't think that's what it does to you. I think it. Look, over the weekend I had a friend, you know my love for donuts. I had a friend come over and he brought, you know, those Rise donuts from Wilton, Connecticut. I think they're the best donuts in the country. And I went to town. I mean, it wasn't just like, could I have half of one or one or maybe one and a half or maybe two or maybe. I mean, you didn't enjoy that?
- [04:28]
Joe Kernen
You didn't enjoy that?
- [04:29]
Andrew Ross Sorkin
Oh, I enjoyed every second of it. The question is, could have I enjoyed a little bit less of it because I didn't enjoy it a couple hours later.
- [04:38]
Joe Kernen
Okay, I can see that.
- [04:40]
Andrew Ross Sorkin
When I thought I gotta go to the gym.
- [04:42]
Joe Kernen
Oh, I thought you were gonna say gotta go to the john. That's what I thought you were gonna say.
- [04:45]
Andrew Ross Sorkin
Well, that probably too, but. So don't you think that if you had the pill this would help?
- [04:50]
Joe Kernen
I don't know, it seems like it's cheating. You're like fooling your brain into thinking you're not hungry. The thing is, I think it's got other health benefits too. Like really significant benefits, this compound. I don't know. The jury's still out on what I'm thinking about. It seems like cheating, though, to me. You really need to exercise and, you know, not graze. Not graze. Liesman's telling me it's also Festivus, so happy Festivus, which. That's for people, for the rest of us, I think is what Jerry Stiller used to say. Festivus for the rest of us. Right. For those that don't do Kwanzaa or Christmas.
- [05:33]
Andrew Ross Sorkin
This is not a Festivus situation, I don't think, but maybe. Depends which side of this you're on. President Trump saying the will keep tankers and crude oil intercepted near Venezuela. They don't think of this as Festivus. About two weeks ago, the US Seized a ship carrying more than a million barrels of oil. It intercepted a second ship over the weekend, and the president confirmed that the US Is pursuing a third. Now Trump has ordered a blockade of ships heading to or from Venezuela as he steps up pressure on the country's President Maduro there. Asked if his goal was to get Maduro to leave office, President Trump said it would be smart for Maduro to step down. So there's always been this question, is this really about regime change or is this about drugs and other things coming in? And it sounds about all.
- [06:19]
Joe Kernen
I guess he got just shellacked in the last. Maduro did in the last election, but it didn't matter because he's a strong man. And, you know, they have been. And I saw Trump talking yesterday, I actually liked what the president, what he said yesterday. He goes, you know, a lot of people have looked the other way as they've, you know, just flooded our country with this poison that kills Americans. He goes, I. They said other presidents didn't mind. I do mind, and I don't think this guy's long for. And then as an ancillary benefit, you get Cuba, which has never been, I don't think, great for the people that live there. The regime that's been there, I mean, we have a special envoy for Greenland now, too. So Denmark's not happy, but there's. It's a very activist role towards controlling the Western Hemisphere. And we're going to talk to Victoria Coates.
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Andrew Ross Sorkin
You said we get Cuba. How do we. Are we going to get Cuba?
- [07:16]
Joe Kernen
No, we're not going to get it. We're going to. It's just that eventually, I mean, we've always wanted regime change in Cuba, and we thought when Castro died, it would end it and it still. And not just not for our own interests, I don't think.
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Andrew Ross Sorkin
I think that's what. No, because Greenland, you know, he wants Greenland.
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Joe Kernen
That's our own. That's our. Yeah, that's for us that it's such an important gateway to the Arctic, the, you know, energy and natural resource rich area of the globe. And it's the same event where President Trump made those comments about Venezuela. He announced the plan to build a new Trump class of battleships. The Navy secretary said the ships would feature the biggest guns ever on US Warships as well as nuclear armed cruise missiles.
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Andrew Ross Sorkin
Meantime, President Trump also putting defense companies on notice. He said he's going to meet with executives next week as he looks to force them to speed up weapons production.
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Joe Kernen
So we don't want to have executives making $50 million a year issuing big dividends to everybody and also doing buybacks. And then they say, well, we don't have the money to build the plant. They got to build plants.
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Andrew Ross Sorkin
Reports say the White House has been working on an executive order that could clamp down on dividends and buybacks at defense companies. Okay, Joe. Yeah, so we've had debates about buybacks and dividends. This is Elizabeth Warren right here.
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Joe Kernen
No, I know. That's what I said at the top. Maybe you can get. This is. It gets very populist at times and there is an audience for this type of rhetoric. It's a new world where, I mean, maybe there was a time where we didn't know we weren't depleting our weapons stockpile every year because we weren't supplying our allies because there weren't as many conflicts. So I can see what he's saying. The weapons are depleted. But if a company on its own decides that the best use of its capital is to reward shareholders, I mean, what's he talking about, the dividends? Do you think dividends only goes to the CEOs? The dividends go to the shareholders who are the people that are putting up the capital and risking the capital to fund whatever they decide the management decides to do. So return of capital through buybacks or dividends and is perfectly proper based on what a company is supposed to do. Now, defense contractors do have, I think more of a responsibility, a bigger maybe responsibility for the greater good maybe of the country. You could make that argument, I guess. But if they think like oil companies, remember for a while that's all because of.
- [10:04]
Andrew Ross Sorkin
Well, that's what I was going to say. I was going to say that you've always made the market based argument that.
- [10:09]
Joe Kernen
I'm making it again. I'm making it again. I think this is. That's why I said right at the top of the show, if I say maybe someone can get together with Elizabeth Warren on something, do you think. I think it's a good idea. Am I implying that this is.
- [10:25]
Andrew Ross Sorkin
These days.
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Joe Kernen
Am I implying that this. Yeah, it's top determined. But I'm not implying this is a well thought out, correct strategy. If I'm throwing her in there.
- [10:36]
Andrew Ross Sorkin
You know, things are, you know, strange bedfellows.
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Joe Kernen
It is. You're right. No, it is. No, I don't like. I think that's, you know. And you heard. What was that? That dividends to these guys that make 50 million. The dividends. It's a very small amount. I don't know how much the CEOs own of the stock. They probably own some of the stock. Some of the dividends would accrue to them, I guess. But dividends go to shareholders. Stock buyback, that's a. That's a return of capital to shareholders. And they're the people that should be deciding on how the company plans out its strategies to do to succeed.
- [11:13]
Andrew Ross Sorkin
Say loud and say proud.
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Joe Kernen
You're on. Now, wait a minute. I'm sure on my side now. Am I going to have to. You may have to.
- [11:20]
Andrew Ross Sorkin
You may have to rethink your whole. Whole view there.
- [11:23]
Joe Kernen
Okay. The weight loss that maybe on the weight loss drug. What kind of doughnuts were they? I mean, what are they? Did they have bacon on them or anything?
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Andrew Ross Sorkin
No, no, no. The store is called Rise. I'll give them a shout out. It's the Aztec or the Vanilla. And it's amazing.
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Joe Kernen
Love.
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Andrew Ross Sorkin
It's amazing.
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Joe Kernen
Is it all sugar and fat? That's all it is, right? There's not even a.
- [11:46]
Andrew Ross Sorkin
It's all it is. Full on carbs. There's nothing else to it. Just fat.
- [11:52]
Joe Kernen
Fat, too.
- [11:53]
Andrew Ross Sorkin
Mainlining the sugar, basically.
- [11:57]
Joe Kernen
The Kansas City Chiefs announced that they're moving across the Missouri border to Kansas 6 and 9. Here, you take them. No, that's not why. Lawmakers approved a public private partnership to fund a $3 billion stadium which is set to open at the start of the 2031 NFL season. The plan includes entertainment districts surrounding both the stadium and a new headquarters and training facility. The franchise still needs approval from other NFL team owners to relocate. Officials in Missouri have been pleading to renovate the chief's current home. You know, that's Arrowhead. You see it all the time. If you ever drive past on i70, it's right there it is aging. They're still working on a package of incentives to try to persuade team owners to stay in the show Me state. I was looking at where they're talking about this new facility, training facility right in Olathe, Kansas, which is familiar to me. I had a good buddy on my drives to Colorado in school, and I know Kansas well, that side of, of Kansas City. And it's all the same thing, Andrew. There's Kansas City, Mo. Kansas City, Kansas. It's kind of one big Kansas City. So it wouldn't, wouldn't make that big of a difference. But did you know that Missouri and Kansas were on opposite sides in the Civil War circuit?
- [13:13]
Andrew Ross Sorkin
Which is weird that I did not know they were. That I did not know.
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Joe Kernen
Very weird. Jayhawks and all. I know Kansas well. Love Kansas. America's largest bourbon maker, Jim Beam, is pausing production at its flagship facility in Kentucky. The distiller is owned by Japan. Suntory said the pause will begin on January 1st and last the entire year. The facility produces about a third of the company's annual output. And bourbon sales have rapidly declined this year after more than 20 years of expansion in the U.S. the slump is due in part to changing consumer behavior. A recent Gallup poll found that 54% of Americans say that they do drink alcohol. That's the lowest level since tracking began way back in 1939. And distillers lost a large market when Canada halted imports of American whiskey in response to President Trump's tariffs. Distillers face a unique challenge. They're producing whiskey today that won't be consumed until it's aged for years, often more than a decade in barrels. And Andrew, we just, I don't know, I think you were here. We just had the gentleman, I think it was private equity owns Heaven Hill and some of the other boutique brands. And we pressed him on how's business. And you know, you're always going to, I mean, if you're in that, if you're in the bourbon business, you're going to say, oh, it's, you know, you're going to find ways to look at the bright side. But it's tough right now, just alcohol in general. And then we could get into, you know, the changing preferences of the younger generations. Might not even include alcohol. Might include who knows what, cannabis or whatever. But I've never been a brown liquor drinker. You.
- [15:05]
Andrew Ross Sorkin
Me neither. Clear. Clear is better.
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Joe Kernen
I think at best I can't even do that anymore. You know what I mean? Unless it's clear wine.
- [15:14]
Andrew Ross Sorkin
We'll get you a mocktail.
- [15:18]
Anthony Pompliano
Tease will be next.
- [15:19]
Podcast Host / Narrator
Next on Squawk Pod the commoditization and consolidation that could be Brewing for AI in 2026. Former Facebook general Counsel and Chief Privacy Officer Chris Kelly I think that there.
- [15:32]
Chris Kelly
Is a bit of a bubble around. Hey, we've got to have this constant upward spiral of more GPUs, more power consumption, more data centers. I think that that drive towards efficiency is going to be very real.
- [15:48]
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- [16:48]
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- [17:47]
Podcast Host / Narrator
Welcome back to Squawkpod Today with Joe Kernan and Andrew Ross Sorkin.
- [17:53]
Andrew Ross Sorkin
It's been a tough year this year trying to keep up with all the incremental advances in AI. Steve Kovac joins us now with what to expect in 2026, given how busy and crazy this past year has been. Steve?
- [18:07]
Steve Kovac
Yeah, Andrew, and look, there's this bubbling trend in the AI model race I've been kind of clocking all year long. We talked about that race between these models that, you know, they do video or image generation, some are better at coding than others or writing than others. They all improve though, but they all generally do the same thing. And what we're really seeing here guys, is a race towards the commoditization of these labs and there are plenty of examples of that happening this year. I want to use Apple and Microsoft as sort of case studies here to show what I'm talking about. Neither of those companies have a real frontier model like Open Air Anthropic. So what they're doing instead is investing and partnering in those to make their products happen. Now for Apple, of course, earlier this spring they failed to launch that new version of Siri and they started hinting, hinting that they're going to do partnerships with these LMS instead. Now Tim Cook was actually asked this last July on the earnings call if he thought LMS were becoming commoditized and he gave kind of an interesting answer here, commenting on, saying commenting on that would give away Apple strategy. But later in the year when I met with him, I pressed him a little bit more on that and he talked even more about partnering with these other alarms. He told me in addition to the current integration that you have on your iPhone now with chat CBT quote, our intention is to integrate with more people over time. Think about that ahead of that big Siri launch next spring. Now Microsoft, they've been hosting Anthropic models and they are also investing up to $5 billion in the company. They just announced that last month month they're also started using Anthropic for some co pilot products in addition to OpenAI. Now they also struck that new deal with OpenAI which frees open Air Open Air up to work with other cloud providers while Microsoft can work with more model makers. I spoke with Judson Altoff, he's the commercial CEO over at Microsoft last month and he told me customers are actually asking for more model options in his product products. He also said they originally invested in OpenAI to make that a standard. Now they're doing the same with Anthropic. Now let's look ahead to next year what all this can mean and this commoditization in Action. We're going to have that Siri, the new version with AI powered by a third party LLM, likely Google's Gemini, although Anthropic has been in the conversation and it could be a future where you just choose your own model within Siri. And also I'm expecting to see Cloud Copilot adopt Anthropic for more features now that that relationship has tightened up. Look, it's becoming this sort of ultimate commodity. Users don't really see what LLM they're using. It's that product layer on top of it that is really going to matter, guys.
- [20:45]
Andrew Ross Sorkin
So here's the question. If you do ultimately think that all these LLMs converge in some way that makes them a commodity, what does that ultimately mean towards all the investment that's going into that space? Not necessarily the privatization of it, but the actual underlying lm.
- [21:02]
Steve Kovac
Yeah, and that's what's interesting. I was talking with Frank Holland about this last hour. It's. We're going to likely see some consolidation. Like, I mean, we're already seeing some winners bubble up. Jim Cramer is talking about this on Squawk in the street yesterday, how it's really going to come down to anthropic, Google and OpenAI and everyone else is going to kind of race for that fourth place. I know XI just got that big deal with the military yesterday, but we'll have to see how that forms out. But right now it's just going to be people building their software layers on top of it and trying to productize it. Right now, Andrew, the best company at making products out of this is OpenAI. But we're starting to see hints that Apple and others are going to do it too next year.
- [21:39]
Andrew Ross Sorkin
Okay, Steve, want to thank you, wish you happy holidays. We don't see you before Christmas on this Christmas Eve of the eve of Christmas Eve.
- [21:48]
Joe Kernen
No, I got an update for you on that, Andrew. And. And what's that? You can say Merry Christmas to Andrew. Definitely. You have a tree. You got a tree again, didn't you? You get a tree every year, I think.
- [21:58]
Andrew Ross Sorkin
Typically me.
- [21:59]
Joe Kernen
Yeah, yeah, you.
- [22:00]
Andrew Ross Sorkin
Oh, you know I'm a Christmas loving Jew. Absolutely.
- [22:05]
Anthony Pompliano
I know you are.
- [22:05]
Andrew Ross Sorkin
I love Christmas.
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Joe Kernen
I know you are. But here's what I found out. Colloquially it's called stockings. Christmas Adam. Today it's called Christmas Adam because Adam came before Eve. Because in Genesis, God created Adam out of the dust of the earth, but created Eve out of one of Adam's ribs.
- [22:24]
Steve Kovac
I'm going with Festivus.
- [22:25]
Joe Kernen
Well, Festivus, that's just, I think that's. I don't.
- [22:28]
Steve Kovac
It's a reality.
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Joe Kernen
Christmas is a beautiful thing. It's also Andrew, the day before, the night before Christmas, which is harkens to that.
- [22:37]
Andrew Ross Sorkin
Great.
- [22:38]
Joe Kernen
Yeah.
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Steve Kovac
But he.
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Joe Kernen
You don't get a tree.
- [22:41]
Steve Kovac
No.
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Joe Kernen
You have kids yet?
- [22:43]
Steve Kovac
No.
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Joe Kernen
No. There you go.
- [22:45]
Steve Kovac
I have a nice menorah.
- [22:46]
Joe Kernen
You have a nice menorah? Yeah. Beautiful.
- [22:48]
Andrew Ross Sorkin
My great grandmother, we have a menorah too. I just want to be clear. Lots of menorahs as well.
- [22:54]
Joe Kernen
Right. Twice the gifts.
- [22:56]
Anthony Pompliano
Right.
- [22:56]
Joe Kernen
And don't you get like seven or something?
- [22:58]
Andrew Ross Sorkin
Eight.
- [22:59]
Steve Kovac
It's eight.
- [22:59]
Andrew Ross Sorkin
I get. We do eight gifts. Eight days of Hanukkah and then we got the tree. And we think of it more, to be honest, just to be clear. For us, it's like an American holiday. We treat it like something like.
- [23:13]
Anthony Pompliano
Yeah.
- [23:14]
Joe Kernen
And you. It's another excuse for donuts.
- [23:19]
Andrew Ross Sorkin
AI and tech players vying for dominance in the new year may pursue consolidation in the industry. Joining us right now is Chris Kelly, founder of Kelly Investments and former general counsel and chief privacy officer for Facebook. What do you have? And Happy Chris to see you, sir. Exactly. Did you know that beforehand about this?
- [23:41]
Chris Kelly
I did not know that beforehand, but I've learned a lot this morning.
- [23:45]
Andrew Ross Sorkin
We're, you know, news you can use, my friend, news you can use. So help us understand how you see 2026 play out in this AI space and especially among some of these large language model providers.
- [23:58]
Chris Kelly
So there's going to continue to be a war for talent among the biggest players, and there will probably be some new ones who come to the fore. But more than anything else, there's going to be a drive towards some efficiencies instead of just constantly building more data centers and more GPUs all the time. That obviously the amount that it takes to train a new model is an immense amount of resources in terms of dollars, in terms of GPUs, in terms of power. But I think that there's going to be a lot of companies that turn hard towards how do we do this more efficiently and effectively. One of the most interesting approaches that's going to be out there is thinking about how the human brain reasons and modeling that better. We run our brains on 20 watts. We don't need gigawatt power centers to reason. I think that finding efficiency is going to be one of the key things that the big AI players look to.
- [24:56]
Andrew Ross Sorkin
Is there anybody who you think either drops out of the game or fundamentally changes how they're doing this? There is a big question about whether you think, think all of these models get commoditized, especially if you think some of the open source stuff either coming out of China or elsewhere really actually takes, you know, catches fire because it sort of could undermine what some of the other folks are doing.
- [25:19]
Chris Kelly
I mean, I think there will be a number of open source players, most prominently my former colleagues at Meta who, you know, have the llama models out there. Mark has invested quite extensively in building, you know, a new team, a bigger team to focus on this. I do think that you'll see a number of Chinese players come to the fore that especially if the Nvidia GPUs that are said to be being sold to China now come online.
- [25:47]
Andrew Ross Sorkin
And when you think about winners and losers, are you of the view we're in some kind of bubble? Are you of the view that it's all going to be fine? Are you of the view that this is just the beginning? Where are you both?
- [25:57]
Chris Kelly
Both is the way that I would put it. I mean, I think that there is a bit of a bubble around, hey, we've got to have this constant upward spiral of more GPUs, more power consumption, more data centers. I think that that drive towards efficiency is going to be very real. And those who kind of strike breakthroughs in this area will come to the fore. And I think that some of the bigger players will end up acquiring smaller players that do that breakthrough. And then I do think that you'll see open source models both out of the China, China and the US and some out of Europe too, but mainly out of China and the US will provide people basic levels of compute and access for generative and agentic AI.
- [26:39]
Andrew Ross Sorkin
What is the chance we see in this regulatory environment a major transaction? Now OpenAI may be too big. I don't know where you think the valuation lands for an anthropic, for example, which obviously has stakes in it, or ownership stakes by people including Google and Amazon and now I believe Microsoft as well. Could, could you see a company try to take out one of the big large language models? I mean, the other piece of this is Apple is not really in the game the way I think they want to be. Exactly.
- [27:11]
Chris Kelly
And they have an incredible cash hoard to deploy and obviously an acquisition currency in their stock that works pretty well as well. So I do think that you'll see some, some, you know, some big deals in the space, particularly as some of these more efficient players come to the fore. If you can take essentially an operating system that you have going on with your LLMs and think about how to make that a lot more effective and efficient on all the classic tests and coefficients about reasoning to get to applied general intelligence. Everyone's going to take the opportunity to do that to the extent that they have both cash hoards and obviously incredibly valuable stock to deploy. I do think you'll see a few big deals in this space.
- [27:58]
Andrew Ross Sorkin
But how big are we talking? I mean, so I would say anthropic would be potentially hundreds of billions of dollars.
- [28:04]
Chris Kelly
Hundreds of billions, exactly. I don't think we'll get that big. And I think that most of the folks who have achieved sort of nine figure valuations are, I mean, 12 figure valuations are thinking about how they begin to operate on their own. They're going to have to deal with the fact that the resource intensivity of the models operating it can be a cash bleed. And so eventually they're going to have to come. The big boys are going to have to be profitable at the end of the day and make this work from a revenue perspective as well.
- [28:43]
Andrew Ross Sorkin
Okay, Chris, we're going to leave it there. We appreciate it on this.
- [28:47]
Chris Kelly
Great joining you as always.
- [28:48]
Andrew Ross Sorkin
Eve Adams. Yes, thanks so much.
- [28:54]
Podcast Host / Narrator
Coming up on Squawk Pod, Bitcoin's rollercoaster year is coming to a close. We'll talk the highs, the lows, and what's next with investor Anthony Pompliano.
- [29:04]
Anthony Pompliano
One of the aspects of bitcoin that people aren't talking about is that the volatility of bitcoin has actually been coming down.
- [29:12]
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What made you confident that you could.
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Do something that hadn't been done before?
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Joe Kernen
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- [30:30]
Podcast Host / Narrator
You'Re listening.
- [30:30]
Andrew Ross Sorkin
To Squawk Pod watching Squawk Box right here on cnbc. I'm Andrew Sorkin along with Joe Kern and Becky is off on what are we calling it?
- [30:39]
Joe Kernen
Joe the at Adam Christmas Adam. Christmas Adam and Chris Christmas Adam.
- [30:43]
Andrew Ross Sorkin
So this is the Christmas Eve of, of the Christmas Eve and that's Christmas.
- [30:48]
Joe Kernen
Day before, day before, the night before Christmas.
- [30:52]
Andrew Ross Sorkin
I'm Christmas Adam. I'm just going with that. But people are going to ask me all day if I say Christmas. Hey, Happy Christmas Adam. What are you talking.
- [30:59]
Joe Kernen
Adam came first and then came Eve from his rib, apparently. Genesis.
- [31:06]
Andrew Ross Sorkin
Coinbase doubling down on prediction markets and buying startup the clearing company marking its 10th acquisition this year. As the crypto exchange expands beyond its core digital asset businesses, the clearing company helps turn forecasts into tradable markets, handles the infrastructure that lets those bets be created, priced and settled.
- [31:28]
Joe Kernen
And Coinbase, it's almost as volatile as is Bitcoin. Let's look at bitcoin prices this morning. Oh, my God. There might not be another interest rate cut. Better sell some bitcoin. Bitcoin, there it is right now, down 598 at 87. We'll talk about where it's been with Anthony Pompliano, founder and CEO. I was looking at Coinbase got as high as 300 back in 21. Then it went all the way down to 30. Then it got all the way up. Anthony and then we'll get the coin to bitcoin all the way up to almost 400 again. Now it's almost been cut in half again. So very volatile, down for the year. Bitcoin is now down for the year and down 30% from its highs.
- [32:08]
Anthony Pompliano
Well, you know, what I think is happening here is I've been an investor in Coinbase since the private markets. And one of the things that's really interesting is they're going after this everything exchange. They basically want you to be able to buy public stocks, crypto prediction markets, perps, everything on one exchange. But also if you see Robinhood is doing the same thing. Coinbase came from the crypto side. Robinhood came from the brokerage side. You also are starting to see now the traditional exchanges and the traditional financial players. You know, Larry Fink recently said that artificial intelligence and tokenization are the two big themes of finance going forward. So what's going to happen here is everyone is going to meet in the middle. They're all coming from different areas but ultimately they are all fighting for who is going to live at the center of artificial intelligence, crypto and ultimately these everything exchanges where people can trade whatever they want whenever they want. 24, 7 and so I think that the key for public market investors is trying to figure out who's going to get there first and who actually has the most durable business. Now Coinbase has somewhat of an Advantage. They have 100 plus million users and they've come at it from a crypto friendly standpoint. Many of these technologies are using that crypto plumbing. And so having kind of a head start in the crypto side is going to be a big advantage. But I would not discount the traditional players. These people have a lot of money, they're very ambitious and they understand the regulatory apparatus. And so you're going to have this kind of cutthroat competition. And ultimately the winner is the individual investor or the individual citizen because they're going to get lower prices, faster market access and ultimately better pricing on these different opportunities.
- [33:32]
Joe Kernen
Bitcoin was 125. There were people talking about 150 by the, by the end of the year, even higher than that. And then long term, over $1 million a coin. It hit a road, a bump in the road on the way to some of those numbers. Right. Took a long wrong turn at Albuquerque or something. You point out what, it's up 100% in two years.
- [33:55]
Anthony Pompliano
Yeah, I mean, look, I think that there are a lot of bitcoin investors that are disappointed that bitcoin did not go to 150200 250. I mean take your crazy number that people are predicting. At the same time, we have to remember Bitcoin is up 100% in two years. It's up almost 300% in three years. It has been compounding. The compound annual growth rate of bitcoin over the last decade is 70%. This thing has been a monster disaster in financial markets, but it has volatility. And so one of the aspects of bitcoin that people aren't talking about is that the volatility of bitcoin has actually been coming down. And so we didn't get a blow off top that I think people expected in kind of the end of Q3 or beginning of Q4. But we also haven't seen the big 80% drawdown that people normally expect as well. Now who knows what's going to happen in the Future you could see the bitcoin price go down a little bit more or you could see it turn around and start to kind of grind up.
- [34:41]
NPR Announcer
Go.
- [34:41]
Anthony Pompliano
Going into the midterm, could you see.
- [34:42]
Joe Kernen
It go down a lot more? You said a little bit more.
- [34:45]
Anthony Pompliano
You could, but I think given where the volatility is right now, it would be very surprising that bitcoin's volatility has drastically compressed and yet still you could get a 70 or 80% drawdown.
- [34:54]
Joe Kernen
Well, the charts were in the 70s that Katie Stockton talked about. That was when we were still over 100. She was talking about after the first break, under 100.
- [35:03]
Anthony Pompliano
I think one of the most interesting kind of theories, if you will, that I've heard is Matthew Siegel who's over at Vaneck. He basically explained, he's like, look, if bitcoin's volatility got cut in half, then it rather than get an 80% drawdown, you would expect something like a 40% drawdown. That's about what we got from the 120 $526,000 price point down to around $80,000. And so again, does that mean that's what's going to happen? Not necessarily. But I do think that this compression of volatility means that the holders will be a little bit disappointed on the upside because you're not going to get those blow off tops. But also there is some degree of safety or a persistent bid on the bottom side where you're not going to see these huge, you know, 75, 80% drawdowns as well.
- [35:40]
Joe Kernen
So what is that hasn't happened yet can happen for bitcoin either with regulators or Washington or I don't know, security wise more, more adoption sovereigns. What's the next. There's nothing on the horizon really. Is there, is, is Washington still matter? You need that legislation. We don't have it yet.
- [36:02]
Anthony Pompliano
Again, if we go back to this idea of artificial intelligence and bitcoin or crypto are kind of the two big areas where, where the future of finance is. What I believe is going to happen here is I think that AI and agents are going to be offense, they're going to go out and they're going to make money for these companies. You're going to start to see AI applied inside of these financial firms and they're going to start to automate away tasks and then eventually jobs and they are going to be that offensive force forced to go and drive revenue. But then what's going to happen is that these companies are going to take that capital and they're going to go and they're going to stick it into crypto on their balance sheet. You can think of bitcoin and crypto as the defense and actually protecting that purchasing power. Now, what I find very interesting is that that defense, some of it's going to be bitcoin, some of it's going to be stable coins, some of it may even be tokenized gold. But I think that this combination of these two technologies is really where finance is going. And you see it from the startups, but also you see it from the large firms like BlackRock and how long for years. I think that you're going to see these companies start really announcing stuff over the next six months.
- [36:55]
Joe Kernen
Six months. Okay. All right. What would cause you to change that tie?
- [37:01]
Anthony Pompliano
I've been thinking about changing it for 2026. I'll let you know what I end up doing.
- [37:04]
Joe Kernen
And wearing the same another tie every day.
- [37:07]
Anthony Pompliano
Like that's what's been around for a decade. But you know, we might have to get a funeral for it.
- [37:10]
Joe Kernen
You like, you're like Kevin o' Leary wears a black tie every. Every. And he's a. I don't want to.
- [37:15]
Anthony Pompliano
Claim to be as fashionable as.
- [37:16]
Joe Kernen
O' Leary is a huge mega star now. Marty Supreme. Have you seen that Sorkin?
- [37:22]
Andrew Ross Sorkin
Yeah.
- [37:23]
Joe Kernen
Unbelievable.
- [37:23]
Andrew Ross Sorkin
He's the biggest.
- [37:24]
Joe Kernen
It's a huge movie.
- [37:25]
Andrew Ross Sorkin
I can't wait to see Martin. I got tickets, by the way. I'm going.
- [37:28]
Joe Kernen
I think I do, too. I think I'm going. I may be going tomorrow.
- [37:31]
Anthony Pompliano
They're so good at marketing that they got you guys talking about it on cnbc.
- [37:35]
Joe Kernen
They are good at that.
- [37:36]
Andrew Ross Sorkin
Joe, I will see you tomorrow.
- [37:38]
Joe Kernen
Christmas Eve.
- [37:41]
Podcast Host / Narrator
That's the podcast for today. Thank you for listening. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin on weekday mornings on CNBC from 6am Eastern to 9 to get the smartest takes and analysis from that TV show right into your ears. Follow us here on Squawk Pod, wherever you're listening now. We'll meet you right back here tomorrow. Have a great festivus or Christmas Adam or Christmas Eve Eve.
- [38:08]
Andrew Ross Sorkin
We are clear. Thanks, guys.
- [38:20]
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