Why Crypto Die-Hards Are Flocking to a More Secret Version of Bitcoin

0:00The thing about AI for business, it may not automatically fit the way your business works.

0:05Greg Zuckerman:At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM.

0:33Kelly Crow:The Pentagon says the growing cost of the Iran war is going to leave them short of money for other operations. Plus, wide Bitcoin evangelists are hyped for a different coin called Zcash.

0:44Greg Zuckerman:Bitcoin is just an object of speculation. It's digital gold at this point. And the argument for Zcash is it's digital gold plus because you've got this ability to shield yourself from the government.

0:56Kelly Crow:And Anthropik's AI model mythos helped researchers find a way to crack Apple's famously secure software. It's Thursday, May 14th. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

1:16Kelly Crow:We start today's show in Washington, talking about the consequences of the Iran war. The war, along with troop deployments along the southern U.S. border, are eating up military funding. Pentagon leaders say they could start running out of money for operations this summer unless Congress passes a new wartime spending bill. Defense officials also haven't said when they intend to ask Congress for more money for the war. The latest estimate of the conflict's cost so far is$29 billion. In the meantime, the entire military is exploring ways to save money. That could include holding back on training or denying flying hours for pilots.

1:52Kelly Crow:Turning to the summit between President Trump and Chinese leader Xi Jinping in China, another day of talks will be kicking off Friday morning in Beijing. U.S. allies in Asia, like South Korea and Japan, are paying close attention to discussions about Taiwan. As we mentioned on this morning's show, Xi told Trump that any mishandling of Taiwan could lead to, quote, an extremely dangerous situation. So what do regional U.S. allies want out of these meetings? WSJ Tokyo Bureau Chief Jason Douglas says their goal is status quo.

2:23Greg Zuckerman:They didn't want any rocking of the boat, if you know what I mean. There has been and there still is a bit of anxiety, particularly around Taiwan. There's this lingering concern that President Trump, in this pursuit of some grand bargain or trade deal with Chinese leader Xi Jinping, will in some way weaken American commitments to Taiwan and American commitments to the region. They would probably take a degree of reassurance from what we've heard so far, but we're only halfway through the summit, so I don't think nerves will make entirely soothed until the whole thing is over.

2:53Kelly Crow:The U.S. has a longstanding policy of not supporting Taiwan independence while also stopping short of formally opposing it. The China summit doesn't seem to have affected that, as U.S. Secretary of State Marco Rubio made clear in an interview with NBC Today. U.S.

3:07Greg Zuckerman:policy on the issue of Taiwan is unchanged as of today and as of the meeting that we had here today. It was raised. They always raise it on their side. We always make clear our position and we move on to the other topics. We know where they stand and I think they know where we stand.

3:23Kelly Crow:In Cuba, the government says the country has completely run out of fuel oil and diesel. Officials blamed the U.S. energy blockade. Since January, only one shipment of Russian crude has reached Cuban ports. In the capital, Havana, protests have erupted as days-long blackouts lead to deteriorating living conditions. Last night, residents showed their anger by banging pots and burning garbage.

3:48Kelly Crow:The Trump administration said that it continues to seek meaningful reforms to Cuba's communist system. Cuba's foreign minister says Cuba was ready to hear the U.S. offer, but it heard no details of the plan. And back in the U.S., the latest census data show that some of the country's fastest growing cities are its exurbs, communities that sit a long or a longish commute away from a larger city. That's the case in places where the populations of cities themselves are shrinking, like in Dallas and Boston. But in cities that themselves are growing, like Phoenix, the exurb cities, such as Goodyear, Buckeye, Surprise and Avondale, are growing even faster.

4:26Kelly Crow:Coming up, the market debut of chip company Cerebris shows how excited investors are about AI, and we'll give you the details about the merger of two major Manhattan art museums. That's after the break.

4:55Greg Zuckerman:Just add a song to your chosen playlist and put your summer on track. Red Bull Summer All-Day Play. Red Bull gives you wings. Visit redbull.com slash bright summer ahead to learn more. See you this summer.

5:13Kelly Crow:Crypto enthusiasts are souring on Bitcoin. They say it's gotten too mainstream, that it no longer offers the privacy they value. Now, some crypto diehards are betting on a coin they say could be the next big thing. It's called Zcash. WSJ special writer Greg Zuckerman is here to tell us more about it. Greg, there are plenty of other cryptocurrencies out there that say that they're going to improve on Bitcoin. What makes Zcash different?

5:38Greg Zuckerman:It's got more privacy. Bitcoin lets users send and receive funds on this public ledger. and the difference is Zcash gives users the option to use these shielded addresses. You can hide sensitive data. You want to send, you want to receive money, and you can hide it a lot better. Part of it is this reaction to the fact that Bitcoin has been embraced by a lot of high-profile politicians and such, and that's kind of not the ethos. Now it's sort of mainstream and people looking for an alternative.

6:11Kelly Crow:So they want to bring crypto back to the people.

6:14Greg Zuckerman:or kind of make it anti-authoritarian. And part of the idea of Bitcoin, especially abroad, was to protect your money or wealth from the authorities and their ability to kind of swoop in and take it away. And then now you can watch it on the blockchain. You can trace it.

6:28Kelly Crow:When you're saying that Zcash has more of these privacy features, criminal activity was one of the first things that came to mind for me. Is there a reason to be wary of Zcash or the risks that it carries?

6:39Greg Zuckerman:Yeah, I'm nervous, frankly, because Hamas, Hezbollah, They've been proven to have used crypto in the past. And if we're now going to embrace and have some liquidity in another alternative that's harder to trace and understand what they're doing, well, that raises all kinds of troubles and challenges for the authorities and for all of us in society. The proponents of Zcash will say, well, yeah, maybe some of the bad guys will use it, but a lot of the good guys will too, and the good offsets the bad.

7:09Kelly Crow:Well, no matter where you come out on it, Zcash is ticking off right now. It's up 50 % over the past month and more than 1 ,000 % over the past year. By comparison, Bitcoin has gained 8 % in the past month and dropped 24 % in the past year. What is driving Zcash's increase?

7:27Greg Zuckerman:So listen, we have to keep in mind that it's tiny. It's only about$9 billion in market cap, and Bitcoin is$1.6 trillion. And these things sometimes come and go where people get all excited and then they collapse. But that said, it's seen by even established players, investors and such as a better alternative to Bitcoin, a new and improved version of it. At the end of the day, Bitcoin is just an object of speculation. We're still using PayPal and Zelle and our credit cards. It's digital gold at this point. And the argument for Zcash is it's digital gold plus because you've got this ability to shield yourself from the government such that if you want to do transactions, you want to spend for legitimate reasons, you're a business and such, but you don't want authorities keeping an eye on you, then this is the alternative.

8:19Kelly Crow:That was WSJ special writer Greg Zuckerman. Thanks, Greg.

8:22Greg Zuckerman:Thank you.

8:23Kelly Crow:Crypto is becoming more mainstream in finance. Well, so are prediction markets. We're exclusively reporting that online brokerage Interactive Brokers is expanding its business for trading users' yes-or-no bets. It's launching a platform where people can do that on its own existing platform, as well as through Calci and CME Group. WSJ reporter Crystal Hur says prediction markets like Calci are trying to gain more institutional investors.

8:49Greg Zuckerman:People on interactive brokers previously could only trade on their own ForecastX platform. Now they can also trade through CME and CalShe, which is one of the largest players in the prediction market space. And so that should give them access to more liquidity. Their own ForecastX platform had not drawn too much volume since they launched. And so with integration of CalShe and CME, I would expect that it would draw more users to their platform. It's also a big deal for CalShe because it expands how their users are able to access their platform too.

9:23Kelly Crow:In today's stock market trading, companies tied to artificial intelligence kept gaining. Cisco climbed 13 % after the tech company said it would cut jobs so it can invest more in AI. The Nasdaq led the gains, closing up almost 1%. But the Nasdaq and the S &P closed at their latest record highs, while the Dow finished over 50 ,000 for the first time since February. And one standout trade today, shares of AI chip company Cerebris jumped almost 70 % in their stock market debut. Its IPO, the biggest of the year so far, raised$5.6 billion. Investor demand for Cerebris sets the stage for much bigger AI IPOs from OpenAI and Anthropic that are expected later this year.

10:07Kelly Crow:And speaking of Anthropic, its Mythos model is known for its ability to find and exploit software vulnerabilities. Now we're exclusively reporting that an early version of Mythos helped security researchers find bugs in Apple's state-of-the-art security technology. Apple has put a lot of effort into locking down its computer operating system, Mac OS, making it one of the toughest targets for hackers. The researchers say what they created could corrupt the Mac's memory and then gain access to parts of the device that should be inaccessible. The company is reviewing the researchers' findings, and an Apple spokeswoman said that security is the company's top priority.

10:45Kelly Crow:And finally, a big announcement from New York's Metropolitan Museum of Art today. It's agreed to merge with the Neue Gallery. That's cosmetics billionaire Ronald Lauder's Museum for German and Austrian Modern Art, and it's conveniently located just up Fifth Avenue. The financial details of the deal weren't disclosed, but the Neue Collection is valued around$1.5 billion. Kelly Crowe, who covers art for the journal, says that's a big asset for the Met. The Met has strong holdings in so many areas, but they don't have huge holdings in modern art, particularly German and Austrian art, in part because basically Ron Lauder bought it all over the years.

11:25Kelly Crow:And so he has this trove of really iconic pieces by Klimt and Kirchner and Sheila. And the Met has always probably lusted over those pieces. And then for the Lauder family, it's an elegant solution to what to do with their space. And now the Met can take it over and very importantly, keep it intact, similar to what they did with the Rockefeller's medieval collection at the Cloisters. Keep it sort of this distinct identity. The Met said it will assume ownership and operation of the Noya Museum in 2028, informally renaming it the Met Noya Gallery. This summer, the Noya will close for renovations and will reopen in the fall for a 25th anniversary show.

12:04Kelly Crow:82-year-old Lauder says he plans to stand at the front doors and welcome visitors himself to that exhibit. And that's what's news for this Thursday afternoon. Today's show is produced by Anthony Bancey and Danny Lewis with supervising producer Tali Arbel. I'm Alex Oselev for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

12:47Greg Zuckerman:We'll see you next time.