Julie Hyman, Brian Sozzi and Myles Udland of Yahoo Finance analyze the action of the bitcoin market.
Video transcription
– Okay, rigid pivot here. Let’s talk about news from the big markets over the weekend. And that, of course, is all that is happening in the land of Bitcoin. We see Bitcoin under a little pressure this morning. But trading over $ 30,000 at the current time, $ 31,000 in the middle or something. We saw – you see that brief drop in the graph here on the left side of the screen. And we saw Bitcoin below $ 30,000 for a while earlier this morning, well outside the highs we saw over the weekend.
Brian Sozzi, it was kind of the big story at the end of last year, everything going on in cryptography. And I don’t know, I think my question for you would be: at what point do we, as financial media, stop following every Bitcoin tick? And at what point do we say, hey, you know, it’s volatile. It goes up and down and life goes on.
I mean, you’re not going anywhere. I mean, so the 2017 conversation was, this thing, you know, is fraudulent, a scam, whatever? Nobody talks about it anymore. This is not very interesting. So, at what point do we stop worrying about every $ 1,000 move in this thing?
BRIAN SOZZI: Well, I think you have to start looking for fundamental changes in history. And it looks like some things are coming up, guys. See, CME will launch Ethereum futures in February. This is fundamental for the market. This gives investors something to speculate on. But again, it will happen.
Next – and I point to a very nice note from Mark Palmer of BTIG. Now, this is a bit of speculation. But again, this can fundamentally change the market.
Lost in last week’s confusion, VanEck, a major player in the ETF market, filed an S-1 record to list the VanEck Bitcoin Trust. The kicker here– this would hold up– this potential ETF would contain physical Bitcoin. This could lead to a really huge imbalance – an even greater imbalance – between the supply and demand of Bitcoins. Obviously, this has not yet been approved by the SEC.
Palmer also notes that in August 2018, nine Bitcoin ETF registration applications were rejected by the SEC due to concerns about manipulation and a lot of fraudulent activity in the market. But, again, these are potential catalysts for which I think you are seeing this market.
– Yes, just to pick up on the ETF theme there, Sozz, I must say that I am still skeptical that one of these will pass because the regulatory landscape has not necessarily changed fundamentally. And as for your point, yes, VanEck has made these attempts before. And there were all those other rejected ETF requests. So unless something changes in the way they are presenting this ETF, it is difficult to see regulators approving it and getting it approved, even if under a new regulatory regime under President-elect Joe Biden, there would be a confusion of people , certainly in the SEC, when Jake Clayton leaves office, but also other regulators of Bitcoin and the U.S. banking and financial systems.
So this is something to keep an eye on. And, of course, with Bitcoin, there’s always a lot of talk, right? It is never just the fundamentals, whatever the fundamentals of Bitcoin. But of course, one of the last memes to hit is a kind of finance and BC people moving to Miami, which I know Myles has been thinking about a lot. But you should also ask yourself, as we see Bitcoin’s volatility, how many of these people are profiting from at least some of their holdings to make moves wherever they are, or make purchases of any kind. I mean, you must think that some of those people who have gained a lot on paper with this Bitcoin appreciation at some point are going to want to turn it into real money, also known as dollars, that they can use to buy things.
– Yes, I mean, it will certainly have to happen at some point if you want to realize your earnings. Although, on the other hand, I mean, the only real fundamental story that is obviously going on with Bitcoin is that there is an imbalance here with the number of people who would like to buy bitcoins and the number of people willing to sell them. Now, of course, this becomes self-fulfilling, and we are all familiar with Soros’s reflexivity and so on.
But you know, there’s really no other way to explain this dynamic that we’re seeing on the chart here, especially in the last two months of the year, because there was more demand for Bitcoin than salable Bitcoin. And I think that dynamic is likely to continue if we have more whales on the market. So, if there are larger Bitcoin holders, they will be encouraged to make a smaller portion of their available Bitcoin available for sale, right?
Liquidity kind of disappears from the market. And I think it is certainly a dynamic that is driving things, and has really been driving things for this market for some time. And we’ll see how that plays out as we enter the rest of this year.