Yahoo Finance’s Julie Hyman, Brian Sozzi and Myles Udland break down the bitcoin market action.
Video transcription
– Good, hard play here. Let’s talk about the big news this past weekend. And that, of course, is all about Bitcoin. We see Bitcoin under some pressure this morning. But currently trades more than $ 30,000 at the current hour, $ 31,000 on average or so. We saw – you can see the short dive on the graph here on the left side of your screen. And we saw Bitcoin a little below $ 30,000 earlier this morning, far from the highs we saw over the weekend.
Brian Sozzi, that was kind of the big story at the end of last year, everything happens in crypto-land. And I do not know, I think my question to you would be, at what point do we as financial media stop following every sign of Bitcoin? And at what point do we say, hear, it’s erratic. Go up go down and life goes on.
I mean, it’s not going anywhere. I mean, so the 2017 conversation was, is this thing, you know, fraudulent, a scam, whatever? Nobody talks about it anymore. It’s not really interesting. So at what point do we stop taking care of every $ 1000 move in this thing?
BRIAN SOZZI: Well, I think you should start looking for fundamental changes in the story. And there seem to be a few things going on at the beginning, guys. Look, CME will launch Ethereum futures in February. This is something fundamental for the market. It gives investors something to speculate about. But again, this is going to happen.
Next – and I point to a very cool note from Mark Palmer of BTIG. This is a bit of speculation. But again, these would mean that you have to spend for these processes.
Last week in the turmoil, VanEck, a major player in the ETF market, lost an S-1 registration to name the VanEck Bitcoin Trust. The kicker here – it will hold – this potential ETF will hold physical Bitcoin. This could lead to a large imbalance – a further large imbalance – between the supply and demand of Bitcoin. Clearly, the SEC has not yet approved.
Palmer also notes that nine applications to register Bitcoin ETFs were rejected in August 2018 due to concerns about manipulation and many fraudulent activities in the market. But again, these are potential catalysts that I think you consider the market.
– Yes, just to spot the ETF theme there, Sozz, I have to say that I’m still skeptical that one of these is going to come through, because the regulatory background has not necessarily changed fundamentally. And as for you, yes, VanEck has made these efforts before. And there were all the other rejected ETF applications. So, unless something changes in the way they present this ETF, it’s hard to see regulators passing it on and going through it, even though under the new regulatory regime under Pres. the SEC, while Jake Clayton retires, but so do other regulators of Bitcoin and the banking and financial systems in the US.
So this is something to keep an eye on. And of course there are always a lot of conversations with Bitcoin, right? It’s never just the basics, whatever the basics are for Bitcoin. But of course, one of the latest memes to hit is kind of finances and BC people moving to Miami, which I know Myles thought a lot about. But you should also wonder, as we see the volatility in Bitcoin, how many of these people are earning at least a portion of their possessions to move to wherever they may be, or to make purchases of whatever kind. I mean, you have to think that some of these people who at this point have earned a lot on paper from this Bitcoin valuation, want to turn it into real money, or dollars, that they can use to buy good.
– Yes, I mean, it will definitely have to happen sometime if you want to realize your profits. Although, on the other hand, I mean, the only true fundamental story that clearly happens with Bitcoin is that here there is an imbalance with the number of people who want to obtain bitcoins and the number of people who are willing to sell them. Of course, it becomes self-fulfilling, and we are all familiar with Soros’s reflexivity, and so on.
But you know, there really is no other way to explain this dynamic that we see in the chart here, especially the last few months of the year, than that there was more demand for Bitcoin than there was a marketable Bitcoin. And I think the dynamics are likely to continue if we have more whales in the market. So if there are larger holders of Bitcoin, they are encouraged to make a smaller portion of their available Bitcoin marketable, right?
That kind of liquidity disappears in the market. And I think it’s definitely a dynamic that’s driving things, and that’s been driving things for this market for some time. And we’ll see how it unfolds as we approach the rest of this year.