WSJ What’s News – PM Edition

Episode: Crypto’s Long, Hard Fall This Winter

Date: February 5, 2026
Host: Alex Osola
Notable Guests: Dan Gallagher (Heard on the Street columnist), Vicky Go Huang (WSJ Reporter), Erin Mulvaney (National Legal Affairs Reporter)

Episode Overview

This episode unpacks several major stories in business and global news, focusing heavily on the recent, sustained decline in cryptocurrency (especially Bitcoin), record capital expenditures from major tech companies to build AI infrastructure, troubling signals in the U.S. job market, and fresh fallout from the release of Jeffrey Epstein-related files shaking both UK politics and the U.S. legal world.

Key Discussion Points & Insights

1. Big Tech's AI Spending Boom

[00:40–03:26]

• Meta and Google:

  • Meta is set to spend up to $135 billion on capital expenditures in 2026, while Google’s parent Alphabet expects up to $185 billion—doubling last year's figure.
  • Purpose: The majority is directed at developing AI infrastructure, specifically advanced chips and servers.
  • Motivation: Companies are in a "race to build up AI services [and] get as much market share," especially around models like Google's Gemini (competing with ChatGPT and Claude).

• Investor Sentiment:

  • Mixed reactions: Meta’s share price jumped after their strong results alongside big CapEx, while Alphabet’s share price faltered amid market worries over AI’s disruptive potential.

• Notable Quote:

  • Dan Gallagher [01:58]: “They’re in a race to build up AI services, get as much market share, getting users really accustomed to their AI platforms.”

• Amazon:

  • Announced $200 billion in planned CapEx for 2026, also focusing on AI.

2. Labor Market Signals Weakness

[03:31–05:22]

• Jobs Data Delayed:
  • January’s official jobs report was postponed due to the government shutdown.
• Other Reports Point to Downturn:
  • Job openings at their lowest since 2020.
  • Revelio Labs: Over 13,000 U.S. jobs lost in January.
  • Challenger Gray & Christmas: More than 108,000 job cuts in January, the highest for that month in a decade.
  • Major U.S. stock indices all declined, with the Nasdaq down 1.6%—its worst stretch since the “April tariff crash.”

3. Bitcoin and Crypto: The Long, Hard Fall

[05:22–07:52]

• Bitcoin’s Drop:

  • Fell below $64,000, its lowest since October 2024. This is notable considering its record high of over $126,000 just months prior.

• Market Dynamics:

  • Crypto is in a “bear market” since late last year with ongoing “liquidity strain”—meaning both individual and institutional demand has dried up.
  • Investors are rotating out of both tech stocks and Bitcoin amid macroeconomic and geopolitical uncertainties.

• Bitcoin’s Image Problem:

  • Historically pitched as “digital gold” and an inflation hedge, it has shown itself to be “a sort of highly leveraged tech stock” instead, failing to outperform gold.

• What Could Turn It Around?

  • Unlike previous “crypto winters,” this downturn isn’t triggered by high-profile scandals.
  • Wall Street adoption continues, e.g., Fidelity introducing its own stablecoin and institutions launching digital asset funds.
  • Recovery may take “a year or two” if adoption persists.

• Notable Quotes:

  • Vicky Go Huang [06:10]: “Historically, bitcoin has acted like a sort of highly leveraged tech stock...It just has not acted like a hedge against inflation and has underperformed gold.”
  • Vicky Go Huang [06:51]: “A lot of crypto investors are saying that this is kind of the strangest crypto bear market in the entire history of the industry.”

4. Legal and Political Fallout from Epstein Files

[07:53–11:41]

• US Law Firm Impact:

  • Brad Karp, longtime chair of Paul Weiss (one of the country's most prestigious law firms), resigned after new Epstein files showed correspondence and dinners with Epstein, though the firm insists Karp never witnessed or participated in misconduct.
  • Succession: Scott Barshay, noted for driving corporate growth at the firm, takes over as chair.

• UK Political Scandal:

  • New Epstein files implicate Peter Mandelson, recently dismissed as ambassador to Washington, for sharing potentially sensitive info with Epstein.
  • Police are investigating for possible lawbreaking.
  • Ongoing pressure now faces PM Keir Starmer’s government.

• Notable Quotes:

  • Erin Mulvaney [10:22]: “[Partners felt] they couldn’t really ignore” the attention from the emails, leading to a consensus for Karp to step down.
  • Karp Statement [11:45]: “‘Recent reporting has created a distraction and placed a focus on him that wasn’t in the firm’s best interests.’”

Notable Quotes & Timestamps

• AI Arms Race:
  • Dan Gallagher [01:58]: “They’re in a race to build up AI services, get as much market share, getting users really accustomed to their AI platforms.”
• Bitcoin’s Reality vs. Narrative:
  • Vicky Go Huang [06:10]: “The narrative that it’s supposed to be this digital gold... But the reality is that it just has not acted like a hedge against inflation and has underperformed gold.”
• Crypto’s Unusual Bear Market:
  • Vicky Go Huang [06:51]: “...this is kind of the strangest crypto bear market in the entire history of the industry.”
• Paul Weiss Leadership Fallout:
  • Erin Mulvaney [10:22]: Partners decided “it was best that Carper step down as chair...it was a hard decision.”
• Karp’s Statement (Read by Host):
  • [11:45]: “‘Recent reporting has created a distraction and placed a focus on him that wasn’t in the firm's best interests.’”

Useful Timestamps

• Google & Meta AI spending: [00:40–03:26]
• Amazon CapEx & Job Market Segment: [03:31–05:22]
• Bitcoin’s decline, crypto bear market: [05:23–07:52]
• Paul Weiss, Epstein Email Fallout: [09:42–11:44]
• UK Political Fallout: [11:45–end]

Tone and Takeaways

• The episode’s tone is brisk, data-driven, with a strong emphasis on hard financial facts. The speakers adopt a matter-of-fact yet analytical approach, especially on the unpredictability of tech investments, the underperformance of crypto, and the seriousness of reputational risk in the legal and political world.
• Anyone tuning in to catch up on what’s moving markets and shaking up institutions gets not only the headlines but nuanced explanations and real-world implications.