Live from Bloomberg's world headquarters
in New York, I'm Sonali Basak. And from our studios in Washington,
D.C., I'm Kailey Leinz Welcome to Bloomberg Crypto.
A look at the people, transactions and technology shaping the world of
decentralized finance. And Bitcoin hit a record high today
before retreating amid an overall cross asset market slide.
The demand from ETFs and the upcoming having driving crypto into a frenzy.
And we're going to discuss this frenzy with Glenn Goodman.
He was a bit skeptical before this Bitcoin boom.
And of course it's also Super Tuesday. So we'll talk about the current
political environment as it relates to crypto legislation.
Perry and Boring, founder and CEO of the Chamber of Digital Commerce will join us
shortly. So all of that is ahead.
But first, let's get a snapshot of the market.
The best way to do that on your Bloomberg terminal c r y p go.
And what you will find is that although we did breach that $69,000 level for the
first time since November of 2021, around 10 a.m.
this morning, we very quickly fallen back down.
In fact, Bitcoin now down more than 3% back around the $65,000 level.
So we'll see whether or not this rally is sustainable as we all remember what
happened shortly after those record highs at the end of 2021.
Meantime, though, interesting to see ether sustaining its gains, actually
outperforming once again, hired on the day by about two and a half percent,
were trading around 30 $675. A lot of optimism that the spot Bitcoin
ETF that fueled this rally we've been seeing in Bitcoin could be coming to
Ether if the SEC would grant approval to those products.
We'll find out probably in the coming months.
And you also have other altcoins outperforming Cronos up about 6.3%.
I wanted, though to point to Dogecoin because through the year to yesterday
finale, it had more than doubled. It was up more than 30% yesterday alone,
giving back a big chunk of that gain, though, now down about ten or so percent
on the day thus far. This is what happens when we hover at
the highs. Kelly.
We're going to look at some company stocks also tied to crypto because with
the surge in Bitcoin, you have crypto stocks also surging as well.
First, I'm looking at the shares of MicroStrategy, which has taken off since
the rise of Bitcoin more recently 146% in 30 days, if you can believe it.
It is the largest corporate holder of Bitcoin and now it is proposing to
increase those holdings through a sale of $600 million in convertible senior
notes. The value of Bitcoin on its balance
sheet has risen to about 3 billion and the company held about 193,000 Bitcoin
as of February 25th. Now another company I'm watching here is
Coinbase, very much affected by this latest rally.
But twice in the past week some glitches showed individual users having zero
balances in their accounts. The company posting on X that we are
aware that some users may experience increased latency across Coinbase dot
com and a few users may see intermittent zero balances.
But rest assured your funds are safe. The team is investigating the issue and
will provide an update. Trading was not impacted at this time.
Now the company was able to fix the issues quite quickly and you could see
the company's shares really unaffected. Here you have it up more than 11% over
the last couple of days when you saw some of those glitches hit.
Of course, they're getting these glitches because of increased volumes, a
lot of second and third order effects here, Kaylee.
Well on those increased volumes to large part have come from increased prices as
we have seen this surge in Bitcoin in recent weeks.
And many of Bloomberg's prominent guests have weighed in on the action.
The training has been, you know, by all terms historic.
We've gotten the very frothy, frothy levels.
I do still think, despite, you know, the suggestions that there could be a bad
taste, it's difficult to really hone in on that because when the fact is I think
I'll say Blair and Lee obviously in favor of a bullish case.
Net new buyers drive more adoption and market cycles.
And I think the question to ask is who are the net new buyers in this cycle and
the net new buyers? Is the global financial system.
What we're seeing is these green shoots of demand are emerging.
A lot of retail coming in, the trades are on the smaller side and I think
we're really yet to see what this untapped demand will look like once
these tests are offered on more platforms.
I wouldn't be surprised to see some correction and some consolidation, but
I'm very loathe to pick a Bitcoin high because I really do believe this is
price discovery. It's competing against the S&P index.
It's competing against real estate, 00 trillion plus asset class as a store of
value. So we believe capital is going to keep
flowing from those asset classes into Bitcoin because Bitcoin is technically
superior to those asset classes. Now, Bloomberg's David Pan has been
reporting on the Bitcoin rally and how options traders are pricing in $80,000
calls for the end of March. David, it begs the question we have seen
Bitcoin breached the all time high today.
We are seeing it taking a breather once again.
How do you expect the prices to move on from here?
So while we're still seeing elevated level of, you know, open interest for
higher strikes, higher strike prices. So so the momentum is still there, even
if we're seeing a pretty sharp pullback right now from the top earlier this
morning. Yeah, absolutely.
Seeing that now, we're back down around the 36 inch or 35,000 or $65,000 level,
rather, after hitting that 69,000. And of course, the last time, David, we
were at a record high like this was back in November of 2021, which was very
quickly followed by a deep bear market. So when we think about the bull run that
came ahead of that bear market, how does this bull run compare?
How might it look different? I think the biggest, biggest
differentiator for for the late is that rally would be the Bitcoin spot, Bitcoin
ETF. So we are seeing one of the most
sustained bull Bull run, right, Bull run right now in the history of Bitcoin.
So as long as there's a positive that flows into into the Bitcoin, Bitcoin
ETFs and where we're going to see it, we're likely to see continued momentum,
continued rally in Bitcoin prices. All right.
Bloomberg, David Pan, thank you so much. Now let's discuss the price action
further with the author of the crypto trader Glenn Goodman is back on the
program. Glenn, always great to see you.
The last time you joined us here on Bloomberg Crypto was right at the
beginning of 2020 for about a week before spot Bitcoin ETF were actually
approved. And you told us at the time where we we
were trading about $20,000 below where we are now that you thought all of that
was priced in, maybe it clearly was not. What do you say this time around?
Well, if you remember correctly, I was saying was I was long term bullish, but
short term bearish at that point in time.
And in fact, the price of Bitcoin shortly after I said that came down by
20%. So I was right to feel that it was sort
of frothy and overpriced at that particular point in time.
But the long term bullish case remains. So I suppose I feel similarly actually
this time somewhat similar to Mike. No regrets.
You were just showing a clip of him there saying that he was a little bit
worried for the short term, a bit like me.
And the reasons are obviously the price has gone power parabolic recently and it
doesn't take a genius to work out what usually happens after the price of
Bitcoin or indeed any other asset goes parabolic.
But there are lots of warning signs. For example, I think the main thing to
look out really is the bitcoin for the BTC futures funding rates.
If you look at big exchanges like Binance, you'll see that people are now
paying around about 100% interest per year to borrow money to trade Bitcoin,
and they're doing that in the billions of dollars.
Whenever that has happened historically, we tend to get a big correction.
Now, already, as you know, as we're speaking, we've seen a correction
already from 69,000 down to 65,000 already today.
I've been watching those funding rates to see if they're adjusting.
They have come down ever so slightly, but they're still at very elevated
levels. So I would say my short term outlook is
that perhaps we get another big surge to take us resolutely above that above the
all time high. But at some point in the not too distant
future, I think we're going to see one of them big flash crashes at the very
least. Glenn, how do you think about the nature
of leverage in the system now as opposed to when you saw it the last time around
that really drove many companies into bankruptcy?
Do you think that the leverage that is built into the system now is
unsustainable? Now it's completely different.
This is just a short term leverage thing.
As I say, you can wash it out within a day quite easily.
You know, that's why I said a flash crash, because it needn't last for
weeks. It could be a really big one just to get
rid of those. Those are futures traders and allow us
to have a more sustainable upward movement.
It's nothing like the top of 2021. Big difference.
Yes, we have got a lot more institutional money now thanks to those
Bitcoin ETFs. But what we don't have is the return of
the retail traders. You remember it was during the pandemic,
everybody was at home trading Bitcoin. All the all the ordinary people, the
ordinary people have gone and they have not returned yet.
But now, of course, we have the big headline, Bitcoin reaches all time high
and that in itself is bound to attract a lot of new retail interest in the coming
weeks and months, which will probably in the longer term push the price higher.
Yeah. I feel like we've been talking about
that a lot. When the return of the retail investor
into crypto, really what happened and what effects that could have on prices.
What about the activity we are seeing in ether specifically?
It feels like where we were with bitcoin a few months ago in anticipation of a
spot Bitcoin ETF is now where we are with ether as we look ahead to
potentially, although it's not a given that product being next to be approved.
What are you seeing with ether? I think with ether, we have got, as you
say, because there is now that same expectation as we had ahead of the
Bitcoin ETF launch a lot more interest in ether.
And you know, over the past couple of years I'd been, you know, watching that
space quite closely to see if the Ethereum killer would emerge.
And there have been various pretenders to the throne over that time to try and
be, you know, the new sort of Internet computer or worlds computer, as Etherium
was once called, quite, quite by quite a lot of people.
But now it seems that nobody is quite got that.
Etherium is still very much second to Bitcoin in terms of price, but you know,
below it, everything else is sort of quite a lot lower.
So I think still at this point it Etherium is the big one to watch.
It is the big one to buy. And that's why everybody's getting into
it is because quite frankly, nobody is seriously challenging it, nor yet you
know, how fast things change once you're in the heat of a bull market, Right.
So in the months ahead, that could change.
But not you were talking about retail interest and how it hasn't showed up in
Bitcoin yet, but it's hard to imagine institutions buying hordes and hordes of
Dogecoin. And so when you look at the interest
that is in the meme coins and other altcoins, where is that interest coming
from and do you worry about the any bubble popping there?
I'm not too worried about bubbles popping just yet, because, as I say, the
retail interest in there and it's pretty rare for a bubble to pop before the
before the ordinary people get in to carry the bag, to take it off the
insiders. And you know that that's the way it
works in the stock market quite often, just as it does in the crypto market.
And I think it's worth reflecting on how closely Bitcoin's rise has
has mirrored NASDAQ. Actually, we did talk about this when I
spoke to you some months ago, but I think it's worth noting that it's still
doing much the same thing. Bitcoin followed NASDAQ all the way down
and it followed it all the way back up again.
Now, just in the last few days, maybe a week.
It seemed to supercharge it's way, way above where Nasdaq is.
So that then begs the question, has it broken that correlation or is it now
time for Bitcoin to come back down to that existing trend to where the Nasdaq
is? The only other possibility is Nasdaq
going absolutely crazy through the roof, which, you know, of course, is a
possibility, too, at this stage, because, you know, everybody saying that
everything's priced in four for the Magnificent Seven tech stocks, but stuff
being priced in on fundamental terms, as we know, doesn't mean that the market
can't go a lot crazier before it reverses.
But one way or another, Bitcoin and Nasdaq, I think, are going to sort of
get back to the level that they were at before.
Either Bitcoin comes down a fair bit in the near future or NASDAQ comes up a
fight. Glenn Goodman we have to leave it there.
That is the author of The crypto Trader. We thank you for your time on a day that
Bitcoin, of course, hit a fresh record. Now coming up, we're going to talk about
regulation this Super Tuesday with Perry and boring of the Chamber of the Digital
Commerce and the pressure on the FCC to green
light as we were just discussing ether ETF.
It's cold water throat on it from Gary Gensler and his team and to access all
the latest data and news on crypto, check out c r y p go on the terminal.
This is Bloomberg. Welcome back to bloomberg crypto.
I'm caitlin lines in Washington alongside Sonali Basak in New York.
Thank you for joining us on what is not just any Tuesday but super Tuesday and
with an eye on 2020 for electoral politics, we want to bring in now and
bring the chamber of digital commerce CEO perry.
And of course, by the end of today, we very well could be effectively at the
start of a general election matchup between Donald Trump and Joe Biden.
There's a lot of down ballot races to consider as well.
What is the optimal outcome electorally for crypto of these 2024 elections?
You know, it's super interesting. The past four years with the Biden
administration, they've clearly taken a very hostile approach to digital assets
and cryptocurrency. We fully understand that they really
don't want this technology to proliferate here in the United States.
There's a lot of talk about Donald Trump and what's his his current state on
crypto. And the truth is, is we don't actually
know what his stance on crypto is. And I would caution people to think he
might be a strong proponent of digital asset technology during the Trump
administration. And they didn't have a very good track
record of promoting, you know, technological innovation.
The FCC, you know, Trump under the Trump administration blocked spot Bitcoin
ETFs, just like Chairman Gensler did. Secretary Manoogian, the Treasury
secretary, tried to outlaw self-hosted wallets, which led to ICE being involved
in in legal action with the U.S. Treasury to prevent some, you know,
devastating requirements on this technology.
And then President Trump himself put out a statement saying he was not a fan of
Bitcoin or cryptocurrency. So we are calling on Donald Trump to
issue a clear statement on his position of digital assets and cryptocurrency,
because as of today, it's not clear. Yeah, well, we'll see if we get that.
It may be a little bit more clear where, say, Senator Elizabeth Warren, the
Democratic from Massachusetts, stands on the crypto issue as she is pushing
anti-money laundering legislation as we speak in her chamber.
I actually caught up with the senator about that last week.
Just take a listen to what she told me. In our financial system, pretty much
everybody follows the same set of rules. I'm talking banks and credit unions and
credit card companies, gold traders, stock brokers, Private equity now has to
follow the rules. Precious metals dealers.
Venmo, Western Union, but not crypto.
My view of the world is same kind of activity, same kind of risk.
Should have the same regulation. Perrin.
She told me she just wants to level the playing field with this legislation.
Do that. Where do we even start here?
I mean, Senator Warren is literally the queen of political theater.
What is she even talking about? Same risk.
Same regulation. Of course, we agree with that.
And that's exactly what we currently have.
Senator Elizabeth Warren has misled the U.S.
Congress and many of the American people through the way she is communicating how
cryptocurrency is regulated today. As you know, she has a bill that we're
calling an effective ban on cryptocurrency.
19 members of the Senate are currently sponsoring that bill.
We've met with all 19 of those offices, and many of those offices were shocked
to learn that cryptocurrency businesses are regulated as money service
businesses, the exact same way that remittance providers like your Venmo and
MoneyGram and PayPal are. Companies are where you go to buy and
sell cryptocurrencies. These are exchanges you can now buy a
cryptocurrency through PayPal in the cash app.
All of these companies where you do the exchanging so to buy and sell
cryptocurrency or anything else, they're regulated as money service businesses.
They are registered with FinCEN under the U.S.
Treasury and they are subjected to the Bank Secrecy Act.
There is not a gap that is just misinformation and shame on her for
doing that. She does know the difference.
This is a political attack on Bitcoin and on cryptocurrency and we must hold
our elected officials accountable. And you know, you think about some of
the bigger leaders in the crypto community.
Brian Armstrong of Coinbase this week online, not just talking about Bitcoin
and his trading platform, but a lot about a stand with crypto rally in Los
Angeles urging people to vote and really have a stance when it comes to pro or
anti crypto candidates in Super Tuesday alone.
How many more candidates are people really targeting in state and local
elections at this point as well to really elevate them into the upcoming
races? Well, that's one of the things that's so
interesting about all of these themes that are happening right now in our
country. Americans, what is their number one
issue? Poll after poll says it's inflation.
We are living in historically high inflation rates.
Most Americans, just middle class, normal people who have regular jobs are
having a harder time just surviving to pay their rent or their mortgage or to
buy groceries, gas. The price of everything has gone up and
Bitcoin in particular is inflation proof.
It has a limited supply. You can't print more.
And so why do we have politicians trying to take this option off the table that
would protect Americans from inflation at a time when they need that protection
most? And that's why we have so many people
around the country who are running on pro Bitcoin and pro crypto platforms.
You have Bernie Moreno in Ohio is one you have
in Pennsylvania. You know, Senator Casey, he's one of the
19 who wants to ban cryptocurrency. His challenger, McCormack just came out
pro cryptocurrency. Elizabeth Warren has a challenger, John
Dean, running for Senate here in Massachusetts.
So we are starting to see that Americans don't want their access to technology
taken away from them, especially in an illegal way.
And I do think this is going to have an impact on the polls.
And we must be diligent about who we vote for because the current state is
really unsustainable. All right.
And we got to go. But thank you so much for joining us in
Boring Chamber of Digital Commerce CEO. We appreciate it.
And of course, you can have more coverage.
A special Tuesday, our Super Tuesday special coverage, rather, 9 to 11 p.m.
Washington, D.C. time right here on Bloomberg TV and
Radio tonight. And coming up, we're going to talk about
the FCC telling crypto enthusiasts and not so fast when it comes to an ether
ETF. Stick with us.
This is Bloomberg. Either has rallied nearly 60% this year
amid expectations of a swift approval for an ETF from the FCC.
But regulators are not in a rush. And Bloomberg's Emily Rafal reported on
this. She joins us now.
Emily, for the people betting on Etherium, are they facing a rude
awakening when it comes to an ETF approval?
Well, they could be. We have until May 23rd where the SEC has
to make a final decision on Vaneck ether ETF application.
And there's still a number of different factors that the regulator has to
consider. Ether's legal classification.
Is it a security? Is it a commodity?
And also the correlation study is the ether futures market and the spot market
correlated enough just like the study that we saw in the Bitcoin approval.
So there's a number of issuers, the bitwise Valkyrie, that have Bitcoin
ETFs, but they actually haven't applied yet for an ether ETF because they're
still waiting for all these questions to be answered.
So not as much excitement, at least out the gate as a Bitcoin ETF.
See? We'll have to see.
Emily, we thank you so much for your time and reporting.
We know you'll be all over it. That does it for Bloomberg crypto.
Join us again, same time, same place next week and watch Kaylee covering
Super Tuesday all day. It's certainly a big day for crypto and
non crypto communities alike. This is Bloomberg.
