Bitcoin falls below $70,000 in overnight sell-off: CNBC Crypto World

today Bitcoin sinks below $770,000 to end the week micro strategy plans its second convertible note offering in less than 10 days and kraken's head of strategy breaks down why crypto prices are falling after notching new records in recent weeks welcome to cnbc's crypto world I'm Brandon Gomez Bitcoin and ether both ending the week in the red as of noon Eastern Bitcoin dropped nearly 4% to the $68,000 level and ether fell more than 4% to just under $3,700 salana however jumped more than 8% to $181 now for the week Bitcoin dropped nearly 2% and ether fell more than 65% even with the Network's latest upgrade Denon being finalized this week now that update is meant to help with scalability but a bright spot is salana soaring more than 23% as of noon okay let's talk about today's top stories micro stry is planning its second convertible debt offering this month to buy more Bitcoin after markets closed on Wednesday micro strategy announced it was offering $500 million in convertible notes due in 2031 to institutional investors today micro strategy announced the pricing of its offering $525 million now the goal well buy more Bitcoin to increase exposure convertible notes can be exchanged for shares when the stock hits a predetermined level and gives companies an option to raise money at lower interest rates than regular bonds this came just 9 days after the firm announced a $600 million private offering in convertible notes earlier this week micro strategies executive chair Michael sailor said on X that the company bought another 12,000 Bitcoin taking its total Holdings to 205,000 next two Senate Democrats are urging the SEC to block any further crypto exchange traded products Senators Jack Reed of Rhode Island and lansa Butler of California sent a letter to SEC chair Gary gendler earlier this week arguing that retail investors would face quote enormous risks from etps referencing thinly traded cryptocurrencies or cryptocurrencies whose prices are especially susceptible to pump and dump or other fraudulent schemes the Senators also pointed to a finra survey which disclosed that 70% of broker's Communications with retail investors regarding crypto violated Fair disclosure rules which the Senators say raise quote significant conc concerns that Brokers and advisers might provide incomplete or deceptive information about Bitcoin etps to retail investors the SEC approved spot Bitcoin ETFs in the US back in January and are currently reviewing applications for spot ether ETFs the SEC is due to give decisions on those applications from asset managers including Black Rock vanck and grayscale beginning May 23rd and finally a UK judge has decided that Australian computer scientist Craig Wright is not the anonymous inventor of Bitcoin Wright claimed he was the author of the 2008 white paper that introduced the groundwork for the crypto currency that paper was written under a pseudonym Satoshi Nakamoto well the Jack dorsy backed crypto open patent Alliance took right to court to prevent him from making that claim and suing Bitcoin devs and a UK judge agreed Reuters reported that at the end of closing arguments the judge said the evidence that he was not Satoshi was quote overwhelming and that he was in fact not the author of the Bitcoin white paper all right back to the markets for our main story crypto world's Jordan Smith spoke with kraken's head of strategy Tomas perfumo about what's behind bitcoin's move lower after the cryptocurrency has been hitting new records the past two weeks all right Tomas thank you so much for being here really I think at a perfect time to talk about markets directly Bitcoin falling overnight back to the $68,000 level as we're talking and it's about 7% lower from its recent all-time high and people we've spoken to on crypto have been telling us for some time to prepare for a pullback of some kind so is this just Bitcoin falling back to something that's more sustainable what's the driving Factor here in your your opinion for the sell-off that we're having sure so firstly thanks for having me on but you know when I think about this recent pullback obviously consolidations in the face of bull runs tend to happen um I like to contextualize this kind of movements uh Bitcoin volatility is still fairly low compared to historical standards when it comes to bull runs so we're right now tracking between 60 to 70% annualized ball that compares to Triple digits when you get into some of these really crazy movements historically and you know going back to that conversation around the all-time high you really have to contextualize this so even though people get excited about Bitcoin exceeding 70,000 it's really still a trillion dollar market capitalization asset and in the broader context it's a sliver of overall financial asset capitalization so equities fixed income even Fiat currencies hundreds of trillions of dollars and so I think right now the focus should always be looking forward and for me it's a story around adoption and if you have conviction like I do in this industry we see on the order of 500 million to a b billion people entering crypto and so that's really what's going to drive that long-term trend of of growth in the value of crypto in general yeah let's let's talk about adoption long term I mean we've seen this huge rally this year it's up as you said above 70k as a new all-time high and and I feel like we haven't really seen any new addresses come online in that time we haven't seen new users really come into the crypto market in terms of adoption what needs to change there to yes reach new all-time Highs but how do you expect adoption to change and to get more people into Bitcoin sure so let's put some data behind it and and some again context uh when I think about adoption about maybe a little less than 10% of the global population has adopted crypto in some format as of last year per a lot of market research and when you think about empirical studies of technological disruptions and the adoption of those Technologies you tend to hit this Tipping Point they call it the chasm around 13 to 15% and that's when you start to see that really a big acceleration along the S curve in adoption itself and so we're really close to that Tipping Point of think about it and for me that's what I'm most focused on in the next call it three to five years but let's look where we were even just four years ago at the last having salana had just barely launched only a few months prior EIP 1559 on ethereum wasn't a thing nfts weren't a big deal staking was nent uh institutions were only then at the very earliest stages of talking about Bitcoin as an inflation hedge and since that time total central bank balance sheets have grown 30% inflation has gone from call it one and a half 1 to 2% in oecd countries to 3 to 4% and then of course interest rates going from slightly negative to maybe maybe 2% all the way up to five five and a half percent today so it's a completely different world when I think about four years ago and what that means for people in adoption is you have more and more development you have better more intuitive and higher utility experiences that are going to cater to that early majority that's looking for something familiar and useful to them and so that's when you start to really see that acceleration and that 500 million billion plus people that I'm personally looking forward to in the next three to five years you mentioned the magic word the having uh just now and we keep saying it over and over again on crypto world and it really is just a few weeks away in the past it's been a huge Catalyst for bit Bitcoin but I'm curious if you feel that it's going to have the same impact on price this time around or do you expect it to have less of an impact on this bull cycle when I think about the have this having specifically for me I actually think it's perhaps the most symbolic in bitcoin's history and possibly ever uh especially in this stage of adoption and what I mean by that is like I said before we're still very early stages on adoption rates you really have to think about that acceleration and so this timing is particularly important and when I think about this having it's the first time that annual growth in Bitcoin Supply is going to fall below 1% so it's going to be around 8% to start and 94% of all Bitcoins that will ever exist will have been mined by April of this year and so think about institutions or individuals who are looking at Bitcoin as sound money that pitch Around The Limited Supply only 6% left to create uh as well as that really limited Supply growth less than 1% per year you don't get that in addition to the technological advantages that Bitcoin has to offer on the demand side so it makes for a really crisp messaging that's going to really I think play a role in that acceleration in the next three to five years the other Catalyst we're talking about this year alongside the having is obviously the ETFs um do you expect them to continue to be a major driving factor for Bitcoin this year and I'm also curious just in terms of Kraken strategy um if you see them as competitive or as complimentary to your business I think it does play a big role you know you had a lot of Locked Up capital in the US That Couldn't participate in getting Bitcoin exposure and now you're starting to see this narrative play out in other countries where they're already looking at potentially launching their own exchange traded products if they haven't already on bitcoin so I do think there's going to be an ongoing trend of the role of exchange traded products now how does it impact Kraken so I I see this on Two Front in particular so direct impacts uh Kraken has or has ownership of CF benchmarks which is actually the largest index provider for not just regulated derivatives but also the US Bitcoin ETFs themselves and so uh we do play a role in the reference and pricing of these ETFs for comparison and benchmarking purposes and because we are included in that as a constituent in that pricing we are also a liquidity venue uh for Bitcoin coin itself within the context of the ETFs and so a lot of that sourcing of Bitcoin that happens at the ETF level at the end of the day has to go to exchanges like Kraken to get that Bitcoin into their Treasury and so Kraken is going to play a role directly as far as trading itself and and whether it's complimentary or competitive I think it's more on the complimentary side because at the end of the day when you think about the different assets or asset managers that are playing in that in that space in the ETF Market uh in a lot of cases they're prohibited from even touching spot Bitcoin uh itself and so I think that it's going to be complimentary nature it's going to grow liquidity it's going to grow volume it's really good for Bitcoin okay that's all for crypto world this week we'll be back again on Monday we'll see you then

Channel: CNBC Television

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Keywords: crypto world, cryptocurrency, bitcoin, digital currency, CNBC, business news, finance stock, stock market, news channel, news station, breaking news, us news, world news, cable news, finance news, money, money tips, financial news, stock market news, stocks, crypto investing, crypto, crypto mining, bitcoin mining, crypto industry, ether, U.S. currency, U.S. economy, cryptocurrency news, Bitcoin, crypto world cnbc, blockchain, etf, web3, nft, kraken, thomas perfumo, tom perfumo

Id: ztwTSYG2ysw

Length: 11min 24sec (684 seconds)

Published: Fri Mar 15 2024