Bloomberg Crypto 03/19/2024

Summary

The Bloomberg Crypto segment discusses the recent price swings in the crypto market, with Bitcoin experiencing a significant drop. Anthony Pompliano of Pomp Investments shares insights on the market's volatility and the role of venture capital in the crypto industry. The upcoming Bitcoin halving and its potential impact on the market are also explored, along with the influence of crypto lobbyists in the U.S. elections and the possible introduction of regulatory bills affecting the crypto space.

Takeaways

• 📉 Bitcoin experienced a significant drop of over 12% in the past week, continuing its retreat from the previous week's record high.
• 💰 MicroStrategy's stock price fell 26% in two days after its executive chairman, Michael Saylor, sold $5 million in shares and the company made a substantial Bitcoin purchase.
• 🔄 Bitcoin's trading volatility was highlighted by a flash crash on BitMEX, where a sudden influx of sell orders caused a sharp price drop, differing from other exchanges.
• 📈 Despite recent declines, Bitcoin has seen a compound annual growth rate of 60% over the last ten years, outperforming the S&P 500.
• 🤝 The venture capital interest in the crypto space has increased, with more capital flowing into the industry compared to a year ago.
• 💼 Anthony Pompliano, founder of Pomp Investments, discussed the historical context of Bitcoin's price movements and the potential for future volatility.
• 🏛️ Crypto lobbyists are planning to spend tens of millions of dollars to influence U.S. elections, with a focus on supporting pro-crypto candidates.
• 🔄 The upcoming Bitcoin halving event is anticipated to impact Bitcoin's price, with historical trends suggesting an increase in value post-halving.
• 🚀 The growth of Ethereum and other blockchain technologies is being mirrored on the Bitcoin network, with developments like staking and cross-chain bridges opening up new use cases and potential for yield.
• 📊 The crypto market is currently seeing a mix of investor interest, with both institutional and retail investors participating in a market that includes both traditional assets like Bitcoin and more speculative 'meme coins'.

Q & A

What is the current trend for Bitcoin according to the transcript?

Bitcoin is experiencing a decline, being down about 5% at the time of the discussion and extending its retreat with a drop of about 13% from the previous week's record.

Who is joining the Bloomberg crypto discussion to talk about big price swings and venture capital in the crypto industry?

Anthony Pompliano is joining the discussion to discuss the big price swings and the latest in venture capital in the crypto industry.

What does the Bitcoin halving potentially mean for the crypto market?

The Bitcoin halving could lead to potential crypto consolidation, although the specific implications are not detailed in the transcript.

How is MicroStrategy's stock performance related to the company's Bitcoin purchases?

MicroStrategy's stock performance is negatively impacted, with the company's stock down 26% in two days following a 16% decline, despite the company making a second multimillion-dollar purchase of Bitcoin.

What is Grayscale Bitcoin Trust's current situation regarding outflows?

Grayscale Bitcoin Trust has faced outflows of about $12 billion since its conversion into a spot Bitcoin ETF in early January, with inflows moderating and outflows exacerbating since then.

What prediction does one analyst from Standard Chartered Bank have for Bitcoin's value by the end of the year?

One analyst from Standard Chartered Bank predicts that Bitcoin will hit $150,000 by the end of the year.

What unusual event occurred on BitMEX's crypto exchange?

BitMEX experienced a flash crash on its exchange due to unusual trading activity, including possible misconduct, which led to a significant drop in Bitcoin's price against Tether's USDC stablecoin.

How does the trading of Bitcoin differ across various exchanges compared to traditional equities?

In traditional equities, trades eventually feed back to a single data source. In contrast, the crypto market consists of different exchanges with various data feeds, and some exchanges like BitMEX do not employ internal market makers to maintain a stable price, leading to potential price volatility.

What is the historical context for Bitcoin's price drawdowns during bull markets?

Bitcoin has experienced 30% drawdowns five or more times during its bull markets, making the current 13 to 15% drawdown relatively small in comparison.

How does Anthony Pompliano view the recent interest in meme coins?

Anthony Pompliano views meme coins as a form of gambling that appeals to human nature, similar to lotteries and zero-day options. He acknowledges that people are making real money from them, but he likens it to playing video games for adults.

What is the role of crypto lobbyists in the upcoming U.S. elections?

Crypto lobbyists are planning to spend tens of millions of dollars to influence the U.S. elections, with the goal of swaying races in favor of pro-crypto candidates and increasing their influence in Congress.

Outlines

00:00

📉 Crypto Market Update and Anthony Pompliano's Insights

The segment begins with a discussion on the current state of the crypto market, highlighting Bitcoin's significant drop of over 12% in the past week. Sonali Basak and Tim Stuntz introduce Anthony Pompliano, who is set to discuss the reasons behind the large price swings and the latest venture capital trends in the crypto industry. They also touch on the Bitcoin halving event and its potential impact on the market. The conversation then shifts to the influence of crypto lobbyists in the upcoming U.S. elections, aiming to support pro-crypto candidates. The segment ends with a brief overview of MicroStrategy's recent activities, including a substantial share sale by its executive chairman, Michael Saylor, and the company's multi-million dollar Bitcoin purchase.

05:04

📉 Bitcoin Price Volatility and MicroStrategy's Market Impact

This paragraph delves into the specifics of Bitcoin's price volatility, noting a 5% drop in the current trading day and a 13% decline from the previous week's record high. The selling pressure across crypto assets is emphasized, with Ether also experiencing a drop. The focus then narrows to MicroStrategy, which has seen a 26% decline in two days following a 16% drop the day before. The company's purchase of over 9000 Bitcoin for $623 million is highlighted, indicating that MicroStrategy now owns more than 1% of all Bitcoin that will ever be issued. The paragraph also discusses Grayscale's Bitcoin trust, which has faced significant outflows since the conversion into a spot Bitcoin ETF in early January, and the potential implications of these outflows on the market.

10:05

💡 Anthony Pompliano on Bitcoin's Market Dynamics

Anthony Pompliano shares his perspective on Bitcoin's price dynamics, comparing the current market pullback to historical trends in previous bull markets. He notes that Bitcoin has experienced 30% drawdowns multiple times, making the current 13-15% drawdown relatively small. Pompliano emphasizes the significant growth of Bitcoin over the last ten years, outperforming the S&P 500 index. He also discusses the unpredictability of Bitcoin's price movements, referencing recent historical rules that have been broken, such as Bitcoin never going below a previous all-time high. Pompliano then touches on the venture capital interest in crypto, highlighting the blurred lines between private and public markets and the potential for high returns in the public market.

15:05

🤝 Kavita Gupta on Bitcoin Halving and Market Expectations

Kavita Gupta, founder and managing partner of Delta Blockchain Fund, provides her insights on the Bitcoin halving and its anticipated effects on the market. She expects Bitcoin prices to stabilize in the mid-to-late fifties range after the halving event. Gupta discusses the balance between selling and buying pressures, noting that while long-term holders and small miners may sell at high prices, the demand from ETFs will prevent significant price drops. She also highlights the growing use cases for Bitcoin, such as staking and decentralized finance, which could lead to higher yields for Bitcoin holders. Gupta concludes by predicting a new threshold for Bitcoin prices and a potential uptick in the second half of the year.

20:08

🏛️ Crypto Lobbyists' Influence on U.S. Elections

The final paragraph focuses on the increasing influence of crypto lobbyists in U.S. politics, with plans to invest tens of millions of dollars into the upcoming elections. Alison Brill from Bloomberg reports on the efforts of crypto executives, such as Brian Armstrong from Coinbase, who are actively supporting pro-crypto candidates through a super-PAC called Fair Shake. The impact of these efforts on various levels of government is discussed, including the potential to sway House and Senate races and influence crypto-related legislation. The conversation also touches on the industry's stance on former President Donald Trump's evolving views on Bitcoin and the implications for the 2024 elections.

Keywords

💡Bitcoin

Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. In the video, it is discussed as experiencing significant price fluctuations and being a focal point for venture capital investments and legislative interest.

💡Decentralized Finance (DeFi)

Decentralized Finance, or DeFi, refers to financial technologies aimed at creating an alternative to traditional financial systems by enabling decentralized, open-source financial services on blockchain networks. In the context of the video, DeFi is mentioned as a growing area within the crypto space, with new technologies being built on Bitcoin to facilitate its integration into DeFi ecosystems.

💡Cryptocurrency

Cryptocurrency is a type of digital or virtual currency that uses cryptography for security. It is decentralized and operates on technology called blockchain, which is a distributed ledger enforced by a network of computers called nodes. The video discusses the impact of cryptocurrency on finance, technology, and politics.

💡Venture Capital

Venture capital (VC) is a type of financing that is provided by institutional investors to startups and early-stage companies perceived to have high growth potential in exchange for equity or a stake in the company. In the video, VC's role in the crypto industry is highlighted, with the mention of increased interest and capital flow into the sector.

💡Crypto Lobbyists

Crypto lobbyists are individuals or groups that advocate for the interests of the cryptocurrency industry, primarily by influencing political decisions and regulations. They aim to create a favorable environment for the growth and adoption of cryptocurrencies.

💡Bitcoin Halving

Bitcoin halving is an event that occurs approximately every four years, where the reward for mining new blocks in the Bitcoin network is halved, leading to a decrease in the rate of new Bitcoin creation. This event has historically been associated with changes in the price dynamics of Bitcoin.

💡MicroStrategy

MicroStrategy is a company that provides business intelligence, mobile software, and cloud-based services. In the context of the video, it is noted for its significant investments in Bitcoin, to the point of owning more than 1% of all the Bitcoin that will ever be issued.

💡Grayscale Bitcoin Trust

Grayscale Bitcoin Trust is a digital currency investment trust that offers investors exposure to the price movement of Bitcoin through a traditional investment vehicle. It is mentioned in the video as having faced significant outflows, which impacts the broader cryptocurrency market dynamics.

💡Flash Crash

A flash crash is a sharp and sometimes temporary drop in the price of a security or market, typically caused by high-speed trading, market liquidity issues, or unexpected news. In the video, a flash crash is referenced in relation to unusual trading activity on the BitMEX exchange.

💡ETF (Exchange-Traded Fund)

An ETF is a type of investment fund and exchange-traded product, traded on stock exchanges much like individual stocks. ETFs are designed to track the performance of a specific index, sector, commodity, or asset class. In the context of the video, the conversion of Grayscale Bitcoin Trust into a spot Bitcoin ETF is discussed, highlighting its impact on market dynamics.

💡Market Makers

Market makers are financial institutions or individuals that provide liquidity to trading markets by continuously quoting bid and ask prices for a particular security. They facilitate trading by ensuring that buyers and sellers can always find a counterparty to trade with.

Highlights

Bitcoin experiences more than a 12% drop in value over the past week, prompting discussions on market volatility.

Anthony Pompliano joins to discuss big price swings in Bitcoin and the latest venture capital trends in the crypto industry.

Bitcoin halving event and its potential impact on crypto market consolidation are analyzed.

Discussion on the role of crypto lobbyists in the upcoming U.S. election, aiming to support pro-crypto candidates.

MicroStrategy's stock drops significantly following Michael Saylor's sale of shares and the company's multimillion-dollar Bitcoin purchase.

Grayscale Bitcoin Trust faces outflows of around $12 billion since the conversion to a spot Bitcoin ETF.

Standard Chartered Bank analyst predicts Bitcoin could reach $150,000 by year-end and $250,000 by 2025.

BitMEX investigates unusual trading activity that led to a flash crash on its platform, with Bitcoin price temporarily plummeting.

Comparison of Bitcoin trading issues across different exchanges versus traditional equities.

Anthony Pompliano's perspective on Bitcoin's historical performance and its current market position.

Venture capital interest in crypto has increased, with a focus on both private and public market investments.

MicroStrategy now owns over 1% of all Bitcoin that will ever be issued, raising questions about distribution and control.

Delta Blockchain Fund's Kavita Gupta shares insights on Bitcoin price movements and the upcoming halving event.

The potential for increased consolidation in the Bitcoin mining industry due to the halving's effect on miner revenues.

Crypto lobbyists are planning to spend tens of millions of dollars to influence U.S. elections in favor of pro-crypto legislation.

Discussion on the role of crypto in Capitol Hill, with a focus on the influence of crypto executives and super-PACs.

The impact of crypto lobbying on various levels of government, including the House, Senate, and potential presidential implications.

Transcripts

Live from Bloomberg's world headquarters in New York.

I'm Sonali Basak man. I'm tim stunt evac.

Welcome to bloomberg crypto. A look at the people transactions and

technology shaping the world of decentralized finance.

And coming up as bitcoin falls more than 12% over the past week.

Anthony Pompliano is joining us to discuss the big price swings and the

latest in venture capital in the crypto industry.

Plus, we look at the Bitcoin halving and what it might mean for potential crypto

consolidation. We're going to talk to Delta Blockchain

Fund's Kavita Gupta. And as we head closer to the big U.S.

election, we're going to discuss the millions being spent by crypto lobbyists

to tip elections in favor of pro crypto candidates.

First, though, let's get a check on a snapshot of what's going on in the

crypto market today. A sea of red.

Bitcoin right now down about 5%, extending its retreat.

It's actually down about 13% from last week's record.

We're seeing seeing selling across across crypto assets right now.

Ether also lower today. Now, it hasn't hit a record going all

the way back to 2021. Still down, though, nearly 20% just

since last week's high. I do want to take a look at various

pressure points that are affecting crypto right now.

First, MicroStrategy down yet another day.

This after yesterday's 16% decline. Look at this, down 26% in the last two

days. The company's executive chairman and

co-founder, Michael Saylor, sold about $5 million in shares over the last week.

The company also made its second multimillion dollar purchase of Bitcoin

in just over a week. Just over 9000 Bitcoin for $623 million.

That's according to an SEC filing that we got earlier today.

Now, because of that, it now owns more than 1% of all the bitcoin that will

ever be issued finaly. Now, Tim, I also want to bring us over

to another firm very much impacted by the volatility in crypto prices.

That is grayscale because the Bitcoin trust, which we know has faced outflows

to the tune of about $12 billion since the conversion into a spot Bitcoin ETF

in early January. You can just see how much those inflows

had moderated and outflows rather, and how much they have exacerbated since

then. Of course, more recently we have had

Bitcoin prices come off of new record highs and you see that just on Monday it

had its worst day in terms of outflows for more than 640 million worth alone.

Tim So we'll watch where that goes. Of course it matters to grayscale, but

that decline in bitcoin prices also matters to other Bitcoin issuers out

there, ETF issuers rather, and it does also show why they're launching that

other one soon. Elsewhere, we are seeing a lot of calls

for Bitcoin, including this one from Standard Charter Bank.

One analyst predicting that it's going to hit $150,000 by the end of the year

and then get as high as $250,000 by 2025.

That would be a more than 250% increase just from today's price.

Now, you remember last week on our program, Raleigh Perdue, Hova from

seven, R-S.C., also boosted her year end call for Bitcoin.

Check it out. The last time we were here, our target

was 100,000. We are currently revising that to 200 by

the end of the year, if not higher. Indeed.

And there's another developing story on our radar.

BitMEX said it's investigating unusual trading activity, including possible

misconduct that led to a flash crash on Bitcoin on its crypto exchange just

yesterday. The price of Bitcoin against Tether's

Usdc Stablecoin fell to as low as 80 $900 while trading above $66,000 on

rival platforms. Bloomberg's Mike Regan is here to

explain. Bloomberg Answer Mike, how do you see

issues forming with how Bitcoin is traded across different exchanges, and

how does that differ from what you might see, for example, in traditional

equities? Well, in traditional equities,

especially in the U.S., you know, you have this consolidated tape where no

matter what exchange or dark pool stock is traded on, it all eventually feeds

back to one single data source. Whereas in crypto you have sort of a

bunch of different exchanges and various data feeds.

And in this case with BitMEX, I think what is interesting is this is an

exchange we don't talk a lot about in the U.S., but it's not available in the

U.S. But it is a very well-established,

well-known exchange overseas. It's famous for introducing the

perpetual futures for Bitcoin in 2016. Again, they're not available for the

most part in the U.S., but very popular overseas and very sort of influential on

the price. So that's what they're known for.

And they they do offer spot trading. And in this case, what happened is they

just had a very aggressive deluge of sell orders yesterday, sort of early

evening New York time. And unlike many exchanges, they don't

employ their own internal market makers to sort of maintain a stable price.

They say they do that. So they think it's a more fair market

that way. But what it meant in this case was that,

according to a tweet from BitMEX, is that there was such an onslaught of sell

orders that the external independent market makers and other traders just

weren't able to react quickly enough to stop that price from plunging.

So it's interesting that we see this on one exchange, but not necessarily on

other exchange exchanges. And I'm wondering if, as we start to see

institutional adoption happen with crypto, happen with Bitcoin, do you

think we'll start to see some of those precautionary measures put in place on

these individual exchanges that we see when it comes to like traditional

exchanges, like the New York Stock Exchange or the Nasdaq?

Yes. So if this were a stock, it wouldn't

have been able to sell off so aggressively because of circuit breakers

that go off if, you know, the stock gets too volatile.

The crypto, for the most part, doesn't have that.

There's been talk for years about introducing them, but there's really no

consensus to have them everywhere. So I think it is possibly something that

could come into the conversation and the discussion.

And, you know, if if a price suddenly drops on one exchange by a real

aggressive amount, you just halt trading on that exchange and let everyone catch

their breath and sort of catch up with the price action.

It's a great question that I think comes up every now and then, especially when

an event like this happens. So I think Bitcoin goes on sale like

that. Yeah, Yeah, right.

And to be sure, you know, it's not clear exactly how long it stayed or how many

orders were able to be filled at that that price.

BitMEX said they think there was only one trader who was able to get a price

under 12,000, but not exactly clear. You'd have to go through sort of line by

line on the order book to see, see what happens.

Lucky trader Mike Regan, thank you so much.

We're going to bring in Pompe Investments founder now, Anthony

Pompliano, where we're going to talk about something much simpler than the

intricacies of market structure here, because you do have Bitcoin prices back

below $65,000. What's happening under the surface?

Yeah, for context, this is a pullback for aunt's compared to what bitcoin

historically has been right in previous bull markets.

Bitcoin has experienced 30% drawdowns five or more times.

So on the way up in 2017, we went from 1000 to $20000.

There was multiple 30% drawdowns. Right now we're about 13 to 15%

drawdown. So in historical context, it's actually

a very small drawdown in a bull market. Now, the other thing that's happening, I

think, is if you extend out and you look over the last ten years, in last five

years, Bitcoin is up 1500 percent. The S&P is up not even double.

If you go back ten years, Bitcoin is compounded.

The compound annual growth rate of bitcoin is 60%, the S&P is 11%.

And so if you compare those things, if you want volatility on the upside,

you're going to need some volatility on the downside to get there.

And so I think that just keeping the historical context important is

important because this is a very, very small drawdown compared what we've seen

in the past, but doesn't mean that traders really ought to buckle up here

and expect potentially more volatility, further drawdowns ahead.

I mean, there is some irony in the fact that Wall Street came in and when the

ETFs were approved, immediately the price crashed.

Right. Welcome to Bitcoin.

And then we break all time highs in three of the last four times that we

have broken all time highs. Bitcoin's price had doubled in 18 days

or less, and then all of a sudden we get a 15% drawdown.

And so I think one of the lessons of Bitcoin over the last three or four

years is no one knows what the future is going to be.

And we've even violated some of those historical rules that people held kind

of as these like wholly rule. We had never seen Bitcoin go below a

previous all time high. We had never seen Bitcoin hit an all

time high before having both of those rules got broken.

And so I think we're in uncharted territory here and people have to

understand this is like an evil asset that yes, it's been the best performing

asset, but it is very, very volatile all the way, all the way up.

You know, you've been in this space for quite a while, relatively speaking,

because it's a relatively young space. You're known for a couple of things

being early to the space, but also making quite a few private investments

when it comes to crypto, when it comes to blockchain technology.

Given that we have emerged from the crypto winter, how would you

characterize venture capital interest right now around crypto versus where we

were about a year ago before this bull market?

So venture capital interest for sure has increased.

We've seen a lot more capital flow into a but I think it's interesting about

crypto is there's private markets and public markets, but the public markets

are not like in traditional technology, right?

In traditional technology, we have the best companies staying private for

longer. And so the returns available to in the

public market are not nearly as attractive as, let's say, an early stage

investment in crypto. That line is much more blurred.

And what I mean by that is you can go and you can invest in a seed round a

series, maybe even a series B of a private, you know, kind of normal equity

investment. But if you're buying some of these

tokens in the public liquid market, these still early stage investments.

Right? And so you have liquidity, which

obviously changes kind of the way that you think about risk and reward.

But two is there's still a lot of asymmetry.

And if you go back, you know, there's maybe the last cycle Solana was kind of

the famous example, but anybody in the world who had an Internet connection

could have gone and bought Solana for a dollar on the liquid exchanges or $250.

Those are historically have been returns that have been reserved only for private

market investors. And so, again, it doesn't mean that

they're all going to work. They're all early stage, you know, type

things. So there's a lot of risk.

But I do think that there's a more of a blending.

And so when you see interest come back in the public market, it's also coming

back in the private market. Hey, one of the promises of crypto has

been this idea of democratization, this idea that instead of it being controlled

by a small number of very wealthy people, the masses, for lack of a better

term, have access to it. I was pretty struck earlier today when I

saw that Michael SAYLOR'S MicroStrategy now holds 1% of all Bitcoin that's ever

going to be created. Does that concern you?

Not really. I mean, you know, Cameron, Tyler

Winklevoss, they've owned 1% for a decade or so, give or take.

And so there's a number of different organizations or people who have, you

know, a percent, half percent. What I think is really interesting is as

Bitcoin's price has been moving up, there's a report that came out that 1500

wallets per day were reaching the million dollar threshold inside.

And we don't know if those are individuals.

We don't know who those are. But let's just say, you know, some

portion of the more individuals. And so Bitcoin is essentially minting

millionaires on the way up. Now, how do you think about what's like

the ideal distribution? Right?

Does everyone in the world get one Bitcoin?

Well, there's not enough for that. Right?

How do you kind of view okay, if we could perfectly plan distribution?

Well, the beauty is this is a free market, right?

It is kind of the epitome of what economics and a lot of economic theory

has always pontificated about. And so what we're seeing is people are

buying Bitcoin at the price they kind of desert for it.

If they've done the work and they understand it, they start to buy it.

They're access to capital, right? It's not like Michael Saylor has bought

all the Bitcoin with his own money. Actually, I would argue that Michael

Saylor is in control of that Bitcoin. What happens is he's got debt investors,

he's got equity investors, he's got himself, etc.

And there's a lot of people who kind of have their hand in the cookie jar of

that bitcoin. We're talking so much about Bitcoin and

we should say that you guys are hosting a Bitcoin Investor Day in just a couple

of days. But it begs the question, what about

everything else but Bitcoin? You see so much interest that has just

flown back into the markets. You can call it exuberance, you could

call it a bubble if for some. What about the meme coins?

So I think right now the market story is bitcoin and meme coins.

And frankly, they're both right. Right.

That's kind of the crazy part about this market is the Bitcoin investors have

been right. We hit a new all time high.

Everything they've been saying is now getting repeated as talking points by

some of the most respected people in finance.

But on the other end of this, human nature is gambling, right?

You know, we have government sanctioned lotteries, etc..

And so if I say to someone, hey, there's somebody over there who put $500 in the

thing, went to sleep, woke up and it's now worth $25,000, there's a lot of

people in America who say, well, I'm interested in that, but this just isn't

an American story. It's a global story.

And so we're seeing these meme coins work now.

Again, it's almost like a video game for adults, right?

I don't like playing video games that much.

I play every once in a while, but I'm not confused as to say that's real life.

And I think these financial assets are very similar.

The odds that these things actually have real value were kind of tethered to

anything in the real world are very low. But there are people making real money

doing this. And I would argue it's no different than

what we see in the stock market. Many times people are gambling on, you

know, zero day options. Well, if I buy a meme coin or I do a

zero day option, which one has better odds?

You know, that's pretty hard to beat. Anthony, we're going have to leave it

there. Always good to see you.

Thanks so much for joining us on the Bloomberg crypto Pomp Investment's

founder Anthony Pompliano. Well, coming up could be the Gupta of

the Delta Blockchain Fund joins us to talk about these price moves and of

course, the upcoming havoc. Tens of millions of dollars are being

pumped into US elections by crypto lobbyists.

We're going to discuss the potential impact on the races and access all of

the latest data and news on crypto. Check out our whip.

Go on the Bloomberg terminal. This is Bloomberg.

But they post having there will be some miners whose profitability may be

challenged or who may be looking for an exit as their revenues will drop because

of the price, the amount of bitcoin being awarded will drop.

And so I think what will find is there'll be further consolidation.

Some comments there from crypto mining giant Marathon Digital CEO Fred Till

last week. Speaking about the having effect.

For more, let's bring in Kavita Gupta, founder and managing partner of Delta

Blockchain Fund. Kavitha, good to have you on the

program. I want to get to the having in just a

second, but first I want to talk about the price moves that we've seen.

As we mentioned, Bitcoin down around 12, 13% from last week's highs.

How are you watching the price moves in such a short time?

It was very much expected. I mean, if you look at even like the

last week when I was on Bloomberg, I was saying the same thing, that there is

going to be a sell pressure. What is going to be interesting and

different about this time? But I think Bob, who was here before me,

was also sort of insinuating it. It is this is the first time and the ETF

market also have a very big buyer pressure.

So between the sell and the buy, we are finding a very new chart for bitcoin

prices said that do I expect bitcoin prices after the bitcoin halving over

the summer to go around late fifties or around mid-thirties?

Absolutely. But I don't see much more movement

beyond that. But that's still a while away.

BE I mean, how do you think about we thought only about the way up until this

point when it came to Bitcoin ETF and how much more buying pressure but the

selling pressure, could that add more volatility to the Bitcoin asset class

than meets the eye? Oh two selling pressure on the Bitcoin

asset class, actually, even in six days is not bad for the people who really

believed in it. During the bitcoin winter at 20 and late

twenties and only 3330 Duke. And for them this is a good exit price,

but said that based on the new technologies which are coming on bitcoin

and lot of movement which is happening on the buy side, I think you will still

see that there is going to be a new threshold on which and 50 that's going

to find its balance for quite some time before we go into another new 80 for

Bitcoin somewhere, Q3, Q4 of this year. What about when it comes to the having

the upcoming having, how do you anticipate that's going to affect the

price of Bitcoin? We do have other having to go back to

that. We can look at what happened.

So so how should we look at history here and what do you think's going to happen

again? As with respect to the history we have

always seen around halving the prices going up, then the sell pressure comes

down, going down and then eventually pick it up because people start getting

into the market. I expect the same.

But at the same time, I do expect that, as I mentioned before, the forces with

respect to sell and buy the different. I do expect people who have been holding

it from a long time, especially out of Asia, a lot of individual small miners

to have the sell at the high prices. But I still see that the ETF demands

people keep on buying it. And so the buy pressure is going to make

sure that it doesn't go down to 20 or 30 years again.

And we are going, Mm. I think it's worth talking about what

people are actually buying here for a moment because people think about

Bitcoin, they think about it almost as a store of value at this point, but to the

point that you started to get at that there are things that are happening

outside of this ecosystem that are use cases to you, which are the most

promising. I mean, if you look at ether, right, and

we always only talk about Bitcoin or like you just mentioned about me going

right before me, I mean the main technology which started with the tedium

and then moved to a lot of different chains, whether it's LEO tools like all

Polygon or we have non EVM like Solana, it's all about technology which has put

them into multibillion dollar PhDs in the market.

Now we are seeing in last year, year and a half, a lot of similar technologies

getting built on Bitcoin, whether it's staking, whether it's actually creating

and if these and means on Bitcoin, whether it's actually creating a

decentralized finance with having a cross bridge to Etherium, which is EVM

compatibility and to be able to have a multi-billion or $1,000,000,000,000

liquidity out of it video. So we're going to start seeing that a

lot of Bitcoin holders, which has always seen Bitcoin as just a pure storage

value, actually stock having a lot of use cases of it and having 15 to 25%

yield which people on the tedium staking and staking has been getting those

benefits for last couple for five years. Capital Group the founder and general

partner of Delta Blockchain Fund, we thank you so much for your time and I

can't wait to have you back soon as we watch this price action play out through

the course of the year. Now, coming up, how crypto lobbyists are

using their warchest to try and sway the elections this year.

But will it work? We'll answer that next.

This is Bloomberg.

Well, the crypto lobby stepping up efforts to boost its influence in

Congress, planning to pump tens of millions of dollars into elections this

year. Bloomberg's Alison Brill reported on

this and joins us now. Alison, good to have you with us.

If we were talking about this two years ago, I think we'd be talking about Sam

Bankman-fried making the rounds on Capitol Hill.

Certainly a lot has changed in the last two years, this time ahead of the 2024

election. What can you tell us about the role of

crypto and the role of crypto money on Capitol Hill this year?

So I think you made an interesting point about Sam Bankman-fried.

You're right that two years ago we were talking all about him, what he was

doing. I think what makes this iteration

different is, you know, we have a lot of crypto executives getting into the

action. In particular, you know, Brian Armstrong

from Coinbase has been really vocal and there's kind of one key big pro crypto

super-PAC called Fair Shake that's already been diving into elections.

It started with, you know, $80 million of funding, which is pretty, pretty

huge. And it already pumped, you know, 10

million of that into kind of an attack ad campaign against Rep Katie Porter,

who was running for an open Senate seat in California.

You know, they've claimed credit for for knocking her out of that primary race.

I think some people will say, well, you know, she had about half of the votes as

the top two candidates move forward to the general election in November.

But I think the message is clear. You know, they have a lot of money to

spend. You know, for any politicians who are in

close races, they see that and they may either be concerned about that or trying

to court that. So we'll see how that progresses.

What level does this matter at? It's interesting, Ali, because you're

going to an event tomorrow that involves Coinbase, where you will see congressmen

of all sorts there. And some have support very strongly

outside of the crypto industry for their stance here on technology and financial

services. Does it matter at the presidential

level? Does it matter in the Senate?

Does it matter in the House? Where does the rubber hit the road?

You know, I think it matters on all levels.

Right now there are a number of crypto bills that Congress is considering.

You know, they haven't really gone anywhere.

They've gone through some committee votes, some of them.

But, you know, bills to regulate stablecoins bills for, you know, telling

you which agency, either the FDA, the Securities and Exchange Commission or

the Commodity Futures Trading Commission is your regulator

bills on illicit finance that the crypto industry has really concerned about.

So, you know, making an impact on these House and Senate races is a big deal.

If they can get people into these seats who might be more sympathetic.

It's also a chance for them to sort of reward those politicians who may be

stuck with them through the aftermath of this collapse and kind of the turmoil of

2022 and then the presidential election. You know, I will say that the industry

hasn't given a sense one way or the other, if it's going to jump into that

one. But, you know, I think there's some

sentiment that maybe president former President Donald Trump, if he wants to

be elected, he would be potentially a little bit more sympathetic.

He's kind of come around a little bit on the messaging for Bitcoin.

Right. Ali, we have to leave it there.

That is Bloomberg's Alison Versfeld. Don't miss her coverage on the Bloomberg

terminal on bloomberg.com, on just what's happening in politics in crypto.

And that's all for bloomberg crypto today but join us next week on Thursday,

March 28th for full coverage of Sam Bankman-fried.

The prosecuting prosecution has entered as prosecutors are saying that he should

get as much as 50 years behind bars for his role in the collapse of RTX.

But stick with us. We have Coinbase CEO Brian Armstrong in

10 minutes from now and before that, Carson block or Muddy Waters.

This is Bloomberg.