Renominate anyone he wants installed. Steve bannon and Corey Lewandowski have been asked to testify before the house intelligence committee. The panel is investigating russian interference and the 2016 election. Neither one has responded. And the worst appears to be over for a Massive Wildfire that plagued the Southern California coast for two weeks. Mandatory evacuation orders have been called off. At its peak, it drove about 100,000 people on their homes. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. I am a alisa parenti. This is bloomberg. And more of Bloomberg Technology is straight ahead. Emily im emily chang and this is Bloomberg Technology. Coming up, bitcoin bears the bubble theory. Prices come crashing down. Our deep dive into the four day selloff. Plus, validating and apple urban myth, the real story between older and smaller iphones and he the lawsuits starting to pile up. The battle between two chipmakers. Qualcomms attempt to avoid a hostile takeover, and a proxy fight spilling into 2018. But first, bitcoin investors may be having a reality check. The cryptocurrency fell almost 30 friday below 13,000. Bitcoin has lost close to 40 this month, but it has still risen more than 11 fall this year. Coin based said all buying and selling was disabled after having delays in processing wire transfers and verifying new customers for the past week due to higher traffic. These issues reignite the question, are we in a bitcoin bubble . Joining us in new york David Kirkpatrick. Also, cory johnson. Lets start with what is going on in bitcoin this week. I created a bitcoin monitor on my screen and i have been monitoring a bunch of stocks as well working on a Bloomberg News story coming to a bloomberg terminal soon. Check that out. Emily i will. Today was weird. I cap noticing the price looked like it was up for me today. And since this morning, since the beginning of trading today, it is not a stock, bitcoin is up, and it is up it today, 24 comes since 9 30 this morning new or time. Basically since ive been awake today, bitcoin has been rallying after a selloff. I think it highlights the enormous volatility that is still extant in the trade of bitcoin. Added to that, a lot of equities that have been formed around the idea of blockchain and bitcoin. Despite the futures contracts trading inside chicago. Emily yet, you still have the skeptics. The Hedge Fund Manager had this to say about his bitcoin plans. Take a listen. This is a bubble and there is a lot of fraud mixed in. There is a lot of froth and fraud in anything that is as exciting as this. I think this could become the biggest bubble of our lifetimes. I want the record to show i didnt say that. Mostly because its so global. Emily he also says he is shelving plans for a cryptocurrency hedge fund. David, look, where do you fall . I have asked you every week where you fall. After this week, where do you stand right now on bitcoin . David my basic views have not changed, but its very important that someone like him that is a wellrespected investor and who been usedusiasm has is now sayinger it could be the biggest bubble of his lifetime. I think that is a healthy thing, because what we have here is something that is almost certainly going to be worth a lot at some point, but there is no objective reason why it should be worth any given amount at any given moment in my opinion. People say it could go to 1 Million People throw out crazy , 400 million. Numbers, and any one of them is equally valid, including zero. Until bitcoin settles down and er what if clear anything it is used for in the world, i think the volatility is a consequence of genuine uncertainty about what people are buying, and that will continue. Emily nobody knows how to value it. Could be zero . Any prediction could be valid , which is to say every other prediction is invalid. Which is to say any prediction is invalid. That is the case. The idea of what they price will be before we have fully functioning usage of bitcoin is nuts. ,t is pierced speculation particularly as you see a lot of retail accounts. Not understanding what this can be come out looking at volatility. I joked i should of put my kidscollege funds into bitcoin a few months ago, but that would be foolhardy. ,here is no underlying value but in terms of Intrinsic Value, it doesnt exist. Just as Intrinsic Value in things like gold and silver dont exist. The Intrinsic Value is an in the eyes of the holder. As Warren Buffett has pointed out, all the gold in the world would be far more productive than all of the farmland in the world. Emily what you think of Companies Adding blockchain to the name or buying Blockchain Companies or getting into the currency in general because they think it is the hot thing . You mean like long island ice tea that became long island blockchain yesterday going up because they changed it. What is happening is people are getting irrationally excited and to use the word greedy in hopes of shortterm gains and they are taking advantage of mass psychology. Onhich is trying to get in what seemed like a sure thing for about five minutes. Cory could have done a great job with the school fund if he invested at 9 00 this morning and sold as the show was starting. Emily if there is money to be made, why not . If you have an incredible stomach for rapid volatility and risk, i think that is fine. It is a harder thing to trade in and out of than some investable items. Im not i continue to think ordinary people, people who are just trying to protect their longterm financial future should not be investing in this thing. I do think longterm it is a his historic Transformational Technology that will have a lot of value. Will it have a millions of dollars or bitcoin in value . I dont know. It will have value. Cory, with the crash we have seen this week, is this the beginning of something or is it just going to continue to go up in the new year . Cory there have been massive price falls and rises in bitcoin , morethe very beginning than 20 over and over again with this currency. It looked like we hadnt seen one in a while, but in a week down 19 is not remarkable for bitcoin at all. One would have thought the futures contracts would have provided more grounding around that, the ability to be long and short, the ability to predict prices in the future. What is interesting is that the futures contracts are predicting them in their first monthly expiration next month a much lower price in bitcoin. We will see if there is more trading around it and how many new coins will be minted. There is a limit on the total number of coins ever created in , and that has people believing the will be some ultimate scarcity, but scarcity doesnt always provide value. Emily what questions are you going to be asking and exploring going into the new year . Cory two things. The silly stocks we are talking about, id love these stories. You want to look at the market cap. This Long Island Iced Tea thing, who cares . A couple of companies have market caps over 1 billion. I think they are extraordinarily risky for shareholders and there is a lot of money in and around these things. Emily some of these are multibilliondollar companies. Cory they are worth examining, but that is separate from the use of blockchain. The usefulness of blockchain will be interesting going forward. I think the ultimate solution day tradee currencies, trade stocks using bitcoin technology, if we ended be ath stocks, that would dramatic change in the way wall street works. Emily all right. Cory johnson, thank you. David kirkpatrick, my guest host for this hour, you are staying with us. A Morgan Stanley director is leaving the company to join a cryptocurrency trading firm. Wayne trench is set to join octagon. They trade bitcoin and cash for clients. Also moving to the same company is an hsbc exec. The moves calm as trading builds momentum among investors and products are lining up for regulatory approval. Coming up, hawaiian apple customers are heading to court over complaints of slowing iphones. That is next. Bloomberg technology is Live Streaming on twitter. Check us out. This is bloomberg. Emily a california judge has sanctioned apple in the federal trade commissions lawsuit against chipmaker qualcomm. The judge says apple has been withholding documents related to the case sends a deadline, resulting in funds of 25,000 a day. Apple is not a party, but has its own legal action pending against qualcomm. Sticking with apple, iphone users have taken their complaints to court, infuriated by an Apple Software update that slow down the operation of their smart phones. At least two customers sued apple over the deterioration in their phones performance. Apple acknowledged this week that it issued an update that slowed down iphones with the dying batteries designed to help people get more out of their aging batteries and reduce occurrences of shutdowns, according to the company. Customers dont seem to be buying it. Joining us from minneapolis, longtime analyst covering apple, gene munster. Guest host for the hour, David Kirkpatrick. Im interested what you think about this story, the iphones, older iphones shutting down has been happening to me. This has long been a conspiracy among users, and apple released its statement in response to a report about this happening. What is your take . Gene i think you need to step back and just play the conspiracy series through. If apple is slowing down the phones for the purpose of lying newer version phones, that sounds like a Risky Business approach. The reason is to make your product worse in the hope that you will buy a more current risk of they run the people saying i dont want an iphone. s go over to and road android. Catch 22. S in a i dont think this was a conspiracy theory, but there is no easy way around it. When you connect the words slowing down the phone, people will react to that. I would say that consumers vote with their dollars. If you look at the after Market Pricing on craigslist or ebay for iphones, they have. Onsistently held their value issue, but doesnt fundamentally change how people think about the phone. Should apple have been more transparent . Are seeing arewe one that we are seeing more and more from Big Technology companies are crying a role in society and our lives, they are not good communicating what they are doing. As we become more dependent on products and services and as demand grows for explanations for why they do things, they dont have any practice explaining that stuff, so i dont think apple did the wrong thing based on the evidence ive seen, however what they did wrong is not volunteering it and waiting for users to essentially out them and then the press forced them to acknowledge it. I think that is the mistake, and it does seem to me parallel to the kind of thing that facebook and google faced in refusing or being unable to explain how their algorithms worked. What they think they ought to be the solution for, things like fake news, etc. Sometimes they will make a little progress if they force them, but these companies dont want to basically take responsibility and give transparency to what they are doing. Emily gene, people are still going to buy iphones, of course, but how do you expect the se classaction lawsuits to go down . Gene i dont think they had any merit. I do want to say that david is spot on that one. The issue was how apple handled the message around it, not eating forthright. This has given people some opportunity where they see dollar signs here. It is easy to take a shot at them. I will make a large bet that these lawsuits go absolutely nowhere. Emily all right. You do have a new note out talking about apples m a philosophy. We have seen a couple of buys. What is the strategy you see playing out here . Gene they will be repatriating a lot of money with the new tax policy and that is probably close to 210 billion and that begs the question how will it change m a philosophy and it the the simple answer is it will likely have no impact on it. Apple has never had a cash problem. Having an absurdly higher amount of cash in the u. S. Doesnt fundamentally change that. To answer question as to what their strategy is, they have done Something Like beats, but in general they dont buy brands, and we think they will that way. If you are looking at a blockbuster m a deal in the next one or two years from apple, i think it is a very low probability. A lot of the same kind of strategynd doubles m a in the near future. Emily all right. Eugene munster of loup ventures, thank you for stopping by. Coming up, qualcomm pushes back over broadcoms takeover plans. What is next for the chipmakers . This is bloomberg. Emily qualcomm continues its attempts to keep broadcoms takeover desires at bay. They are proposing 11 new directors by broadcom. Broadcom is currently attempting a 105 billion hostile takeover of its rival chipmaker. Qualcomm originally rejected the 70 a share bid. Its ceo says, isnt even in the ballpark. Joining us now is joining us now is matt larson, what do you make of the legal direction today . Matt i think they are looking at where the company is and apples dispute in their licensing business. They have been saying we have been hit pretty hard. There is a lot of cash am a of cash on the table we are hoping to collect. It is not indicative of the value of the company. So from a broadcom perspective, you are seeing additional value there if you can clean up legal overhangs and it is a good time to put a bid in. I think it is wise for qualcomm to try to fend those off. Emily how would it proceed . Matt the way things are shaping of now, qualcomm has rejected the bid. Broadcom is looking to insert members on the board of directors. There is a vote in march and we will see how that plays out. We could the additional interest in qualcomms board that will attempt to sway shareholders, and then you may see additional bids to move forward with the takeover process. Emily now talk about the legal pressure facing qualcomm from apple, from the ftc, and other regulators. Matt qualcomm is under tremendous pressure right now. There is a lot of scrutiny. There are allegations that qualcomm overcharges for its chips because it essentially has some kind of monopoly power. It contributes to standards that are required in order to connect cell phones with wireless Internet Connection 3g, 4g, looking down the pipe at five 5g. As a result, apple and people who make apple devices are not paying qualcomms licensing fees, ultrahigh because of the qualcomms leverage because of patents. It is not looking at licensing business right now. It is looking to resolve it through litigation. It takes a long time. We are looking at the Third Quarter of next year before we see any progress in these legal disputes. Emily interestingly, a judge apple for not turning over information fast enough. What do you make of that . Matt thats right. This is in the fccs dispute with qualcomm. It needs to get documents from licensees and others it has. Isputes with apple has been producing 2. 5 million,out but i believe it says in the pleadings, but they have another 1. 6 million documents to turnover. With depositions coming down the pike, we are looking at things coming to a head at the end of next year, apple needs to get these documents turned over. There are deadlines that are breached, and the judge is saying this needs to happen fast and starting to impose monetary sanctions as result of not turning the documents over. Emily David Kirkpatrick is still with us. David, what do you make of all activity happening in the chip industry, lawsuits, hostile takeovers, and all these various disputes . David qualcomm is one of the companies that sort of created the world we live in. They have spent an enormous amount on r d and we are moving into this amazing world of 5g technology, which is just on the horizon. They will help make that possible too. I think of them as one of the great innovative companies, meanwhile broadcom is a much more of a roll up kind of company. The industry is not loaded with players that have fundamentally advanced social progress, and i think qualcomm is one. So i see it unfortunate that this company has been so burdened by so many legal problems. As matt has pointed out, the number of issues that surround qualcomm is very confusing for investors. Emily right. It is a good time for broadcom to jump in, but it is unlikely that they will succeed in the long term. Emily all right, David Kirkpatrick, my guest for the hour, you are staying with me. Coming up, the Venture Capital outlook for 2018. We will hear from Ethan Kurzweil from bessemer venture partners. This is bloomberg. M alisa parenti. You are watching Bloomberg Technology. I am alisa parenti. You are watching Bloomberg Technology. Congress has canceled three days of votes according to an updated schedule release. The u. N. Approved new sanctions on north korea in response to the latest Ballistic Missile launch. The restrictions target north koreas economy and place restrictions on imports on Refined Petroleum products and shipping. The depose head of catalonia is demanding spain recognize his victory in regional elections. He says the government must guarantee he wont be arrested if he returns to spain. He fled to brussels after a separatists declared independence in october. The vote was a bitter blow for the spanish prime minister. He called on catalan lawmakers to meet demands of its people. Elections always mean a new start in democracy, the opportunity to start a new episode. I am hopeful that a new era based on dialogue, not confrontation, will beginning catalonia time of operation and , a not imposition, a time for plurality and not unilateralism. The government of spain