Myles Udland, Julie Hyman, Brian Sozzi and Dan Roberts of Yahoo Finance discuss the market action for bitcoin.
Video transcription
JULIE HYMAN: Bitcoin. We’re watching it again this morning like the whole week, because it’s had an incredible climb again, and a lot has been packed this week as far as the news of cryptocurrency is concerned. Only on Monday does it look much longer than Tesla revealed in a submission that it bought $ 1 and 1/2 billion in Bitcoin.
We also learned this week that MasterCard is investigating the acceptance of cryptocurrencies as payment. BNY Mellon said it would possibly support crypto-trading, and then CNBC reported this morning that Daniel Pinto, president of JP Morgan, said – they did not quite say that they would support crypto-trading. It was more, or it is now, if our customers want it, then we’ll have to do it. It was rather an unwilling acceptance of what was going on. We also chatted, remember this week with Michael Sonenshein of the Grayscale Bitcoin Trust.
We also heard from Michael Novogratz, and both said that at this stage there is more risk for professional investors who do not invest in Bitcoin than to invest in Bitcoin. I will not believe it until we hear people who are not a Bitcoin investor. Dan Roberts is back with us. He followed all these developments. And also this kind of narrative about adoption, that’s the big buzzword from Novogratz and others. Adoption, adoption, adoption.
DAN ROBERTS: Yes, I agree.
JULIE HYMAN: I do not know where the tipping point is, or if we have already passed it.
DAN ROBERTS: I agree that this is the buzzword, July, because you know, it’s one thing to just buy Bitcoin for your balance sheet as an investment and hold on to it. This is fine – and some of these businesses are doing just that. It was part of the Tesla news, of course, but more interesting are the companies that say they want to accept it as payment. Now, of course, that’s a reasonable answer: do people really want to use it as payment at a time when the price is skyrocketing? Probably not. They do not want to spend it, but Tesla says in the end they hope customers use cryptocurrencies to buy their products. Maybe it means cars. Maybe it means something else.
And of course, you mentioned MasterCard, BNY Mellon, and then this morning I just thought you would name another one, Uber. CEO Dara Khosrowshahi said in an interview that Uber does not necessarily intend to buy Bitcoin as an investment, but is considering enabling customers to pay for a cryptocurrency on Uber for rides, as well as Uber Eats.
Nobody really wants to spend their crypto again now, but that’s what we mean when we talk about adoption, and I think that’s the most important step. You’re talking about PayPal. This is adoption. Talk about Square, and it’s a rising tide at the moment, apparently lifting other boats. I mean, hey, like you mentioned, it was just a few days ago, we kind of said, who’s next? And then we woke up yesterday, MasterCard was next. BNY Mellon was next. Twitter’s chief financial officer went on CNBC and said that Twitter is considering adopting crypto and buying Bitcoin for its balance.
So there is a parade going on right now, and I think you have a right to distinguish between kind of pure crypto companies. Of course, those people are bullish and non-crypto-tech enterprises. It’s those companies that think that it really attracts people’s attention when they step forward.
MYLES ABROAD: But you know, Dan, it’s funny that you mention adoption in terms of spending it, because we’ve talked for years about how the story of Bitcoin only works when people go out and spend it, is completely flawed and not really what we do not. talk about again. And so I feel that adoption is once companies, and I have found the Khosrowshahi comments to be curious, because it seems to me that we are assuming that we realize that Bitcoin is a good part of an investment portfolio, and not that our customers want it. see use not. Bitcoin. So I mean, I wonder, like–
JULIE HYMAN: I mean, to be honest, Krosrowshahi’s comments were very tentative, right? He was asked. He did not offer the information voluntarily, and he said: yes, we would consider it – you know, it was not so, we are currently investigating it. It was like, yeah, if people want it, we can consider it.
MYLES ABROAD: But he’s still talking, but he’s still talking about Bitcoin in a way that I think is not really part of the serious conversation. There is no serious discussion left, will Bitcoin replace the dollar? Is Bitcoin something that should be part of an investment portfolio?
DAN ROBERTS: Well, that’s right, and you guys, I think it’s fair to point out that the white paper on Bitcoin was originally a peer-to-peer electronic cash system, and that people do not use it as cash. Now all the bulls of course just say store value, digital gold, that’s good, that’s good enough. But I think the truth lies somewhere in the middle. If people try to get rid of Bitcoin because they say, you can not really spend it most places. I can not buy my coffee with it. That is not the point. It’s good, and technologies are evolving, but it’s also true that if it’s the only thrill of buying it as an investment and sticking to it, it’s not very exciting either.
So when I think of an exciting adoption, it also really extends to a third bucket, Myles, right, we’re talking about the adoption to make clients pay in crypto, to invest for it for your balance, and then ‘ be a third bucket If you adopt this decentralized technology, you know, and banks have been doing it for a while now, but now we see decentralized finance and all sorts of new use cases and decentralized programs built on Ethereum. And this is kind of the most exciting adoption, possibly if there are real issues for daily use for it.
JULIE HYMAN: And what’s interesting about the point is that an analyst was spotted to us earlier this week when Jack Dorsey was asked about crypto on the call for Twitter, that’s where he took it. He spoke on Twitter about a decentralized technology that could potentially help with content curing. He talked about the model being centralized. It is Twitter that with its algorithms decides who sees what, but what if the control for it is placed in the hands of the users? Doesn’t sound like they’re actually building it now, but he came up with it as an interesting idea.
But to just return to the payment question for a second, Dan, I still have trouble understanding what exactly it would be like – if I wanted to buy a Tesla with Bitcoin, how would it work if the value – like, how is it a viable currency if the value varies so much? You know, how are you going, how are you going to do the transfer? How, you know, I’m just not doing it – I’m struggling to just turn my head concretely on how it’s going to work now.
DAN ROBERTS: Well, and to be clear, I do not think it is a viable daily currency. Definitely not. If you are a company and want to accept your payment in crypto, you should only do so because you are ready for the volatility and trust that the value will eventually rise. Otherwise, right, it’s very simple. Why would a business take something that could be worth a lot less money tomorrow? But clearly, if you’s Elon Musk, if you’s Jack Dorsey, if you’ve Dan Schulman, you believe in the future of these things.
And I think I want to point out what Jack Dorsey said centuries ago when Square first openly embraced Bitcoin by adding crypto to its cash app, and he believes: Bitcoin will be the currency of the internet. And I think that sums it up nicely, because it does not just mean that you pay with it. The currency of the internet means the underlying technology that it is going to be used for a lot of things, but you were definitely right, July, if you are going to pay in crypto, it can reduce a lot of the friction. It must be completely frictionless. It may not be like when you sign up for a subscription to a news site with paywalls, and have to enter your credit card and enter your address and all the information, but that’s what some of these new coins hope to do is to be smooth. allow micropayments online.
BRIAN SOZZI: Then, let me read these comments to you. This comes from Dan Schulman, CEO of PayPal, yesterday on their investor day. He said: “This is an opportunity in a multi-decade in which the fundamental traces of the system are going to be redefined, and we have the opportunity to help shape it.” Now you’ve been covering Square and PayPal for some time. How far are the two payment companies compared to others?
DAN ROBERTS: Well, I would put Square in the foreground, and you know, this kind of Bitcoin bull run was accelerated by the PayPal news, because PayPal is probably better known. It’s more consumer – oriented. Square is a bit, kind of business and maybe not everyone knows it, although everyone probably swiped their credit card on a Square fob. But it’s really Square that’s been doing it since 2018, as I mentioned. Square was the first car here, and of course we talked about Twitter saying that it’s considering it this week, that it’s finally me, ah, finally it was Dorsey’s other company that looked at crypto, because Square has been doing it for a while .
Square is the one that behind the scenes not only facilitated the purchase and holding of a Bitcoin in its cash app, but was also the first kind of big name provider that could only buy Bitcoin as an investment for its balance. Square bought $ 50 million worth, which at the time was only 1% of its cash.
Of course, Tesla is making more noise because Tesla has spent 10% of its cash on buying Bitcoin, but I will look at Square as one of the companies that is really going to move the needle here in terms of the big name fintech companies that are spreading adoption beywer. . PayPal is in it too. And we’ll see how many people actually use it. Of course, Dan Schulman said in the most recent earnings report that they are delighted with the adoption rate that already exists in his PayPal wallet, but I still want to bet it was quite small.
MYLES ABROAD: Yes, maybe it’s just because I, and maybe I’m talking to myself here, but if you work for a company like Yahoo Finance, you see the world through the lens of the way companies do it, right, so you think first. to investments, and For me, the fact that large companies and large institutional executives now regard Bitcoin as a necessary investment to say that we have covered all our bases, more confirmation of space than I think even the biggest bulls a few years ago could hope. and I mean, you think about it that way, like you do not have a website that covers the dollar. You have a website that covers things that happen because of the dollar. So it’s not about how you use Bitcoin, it’s about the derivative play of the ways crypto works within the broader financial system that creates interest and demand, and so on.
DAN ROBERTS: Well yes, and just lastly, if we have time, I would say, Myles, from a Yahoo Finance perspective and from the perspective of financial investors, this is definitely the most important thing right now to be the institutional investment. Everyone says, oh, this current round has been run by institutions. That’s fine, and it’s true, but I would also say that the excitement in crypto is currently accelerated by a kind of revolution for retail investors.
You know, it’s all tied up in one kind of convergence that really contributed to the pandemic. These are ordinary people, just, never before – even now, much more than in the 2017, kind of hype cycle, I’ve heard of so many ordinary people being interested in this space and wondering about it, so you’re right. These are Wall Street settings, and it excites people as an investment, but I also think you’ll see adoption by ordinary people wondering, what are the different use cases here and should I use these things? Should it be something I understand and want to learn?
JULIE HYMAN: Yes, if we were driving in taxis or Ubers now, the drivers would definitely ask us about these things. All right, thank you very much, Dave Roberts. Really nice conversation there on crypto and on Bitcoin.