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Speaker 1: This is Bloomberg Crypto, a daily Bloomberg I heard podcast.

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Speaker 1: M Valdana Hirak, a market supporter at Bloomberg, filling in

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Speaker 1: for Stacy Marie Ishmael. It's Wednesday, November two, m h.

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Speaker 1: We all know crypto is notorious for its volatility and

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Speaker 1: all the wild swings that we see in prices have

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Speaker 1: been a trademark of the market for years, and it's

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Speaker 1: also something that's been shaping the trading behaviors of investors

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Speaker 1: who are sometimes looking to make a very quick profit.

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Speaker 1: So what happens when the market's largest digital asset, Bitcoin

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Speaker 1: starts losing its volatility. Over the last four months, the

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Speaker 1: coin has been trading in a very tight range of

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Speaker 1: around twenty dollars a coin, and it's been unable to

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Speaker 1: break out in any real way. So how have crypto

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Speaker 1: investors who are used to those ups and downs been

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Speaker 1: spawning and how have their investing strategies shifted. For more

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Speaker 1: on how traders are dealing with Bitcoin's stagnation, we're joined

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Speaker 1: by Katie Greifeld, markets reporter at Bloomberg. Have you been

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Speaker 1: in this space for a long time? You're sitting on

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Speaker 1: still just magnitudes of gains. Katie, thanks so much for

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Speaker 1: joining us, Thanks for having me. I hope we have

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Speaker 1: a really good time. I'm a little bit nervous. I

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Speaker 1: feel like the bar is high. It's extremely high. Filling

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Speaker 1: in for Stacy Marie, Jeez, high for me, high for you.

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Speaker 1: I was gonna say that's a you problem. Stakes are

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Speaker 1: high for you because you need to do a good job.

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Speaker 1: Can I ask you a question here too? Okay, I'm

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Speaker 1: going So we've been talking about how bitquin has been

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Speaker 1: hovering around the twenty thousand all arranged for a couple

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Speaker 1: of months now, and my first question for you is

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Speaker 1: is bitquin boring? I feel like it's super boring when

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Speaker 1: you look at almost every other asset class that exists.

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Speaker 1: You have stocks, of course, you have treasury bonds which

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Speaker 1: have just gone insane, and then don't even get me

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Speaker 1: started on the currency market. When you look at the

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Speaker 1: don't want to get the Great British Pound, it's just

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Speaker 1: been totally erratic. So I feel like when you compare

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Speaker 1: bitcoin to its own history, and when you compare it

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Speaker 1: to the rest of the investment landscape, it's super boring.

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Speaker 1: Because people are used to huge swings in crypto prices, right,

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Speaker 1: that's kind of what it's known for. I feel like,

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Speaker 1: so now that we have prices sort of just like

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Speaker 1: meandering around nineteen on a very good day. Around twenty thousand,

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Speaker 1: volatility has also gone down. Can you talk about that

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Speaker 1: and what that means? So I think this is probably

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Speaker 1: a long term problem for crypto when you think about

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Speaker 1: what attracted a lot of traitors to the cryptocurrency sphere

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Speaker 1: over the past two years, particularly during the pandemic. It's

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Speaker 1: supposed to be exciting, it's supposed to be fun. Now

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Speaker 1: you're just stuck in this range. It feels like a

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Speaker 1: lot of narrow tis have sort of fallen apart, which

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Speaker 1: I know we'll get to. So I feel like cryptos

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Speaker 1: having a bit of an identity crisis. But I think

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Speaker 1: part of the reason why you're seeing Bitcoin just sort

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Speaker 1: of trade sideways and going a straight line sideways versus

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Speaker 1: what we're seeing in almost every other asset class feels

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Speaker 1: like the marginal seller is gone. They've already been flushed out.

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Speaker 1: All you're left with is the hardcore believers who might

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Speaker 1: be depressed, but I don't think they're going to sell.

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Speaker 1: You're hitting on a million topics. I want to touch

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Speaker 1: on with you, one of them being the narratives, but

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Speaker 1: maybe just talk a little bit more about why it

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Speaker 1: is the prices haven't really been able to break out

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Speaker 1: because I know, a couple of months ago, for example,

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Speaker 1: we had a really big announcement between black Rock and

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Speaker 1: the crypto platform coin Based. Black Rock chose to partner

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Speaker 1: with coin base because of its scale in the market.

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Speaker 1: This news coming out with coin Based and with black

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Speaker 1: Rock showing that the institutional demand to be able to

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Speaker 1: trade go through some of the more traditional huge players

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Speaker 1: in the market is not slowed down. And in fact,

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Speaker 1: as the saying goes that this is the time to build,

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Speaker 1: people are obviously building now. And I think Bitcoin rally

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Speaker 1: like one or two percent that day. Nothing It's nothing

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Speaker 1: for bitcoin, it's nothing. So you would have thought maybe

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Speaker 1: that the reaction would have been just much larger. You

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Speaker 1: mentioned the stock market where we've been going through periods

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Speaker 1: of seeing stocks rallying and bitcoins still stuck. Why is

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Speaker 1: it that there's not been a catalyst really to help

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Speaker 1: it break out. Let's talk about the ceiling and the

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Speaker 1: floor on that range. I think I'll start with the floor,

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Speaker 1: which goes back to the point I made that the

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Speaker 1: marginal seller is gone. I mean I tracked the world

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Speaker 1: of e t f s and exchange traded fund like

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Speaker 1: products pretty closely. Bloomberg Intelligence has some great data, which

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Speaker 1: is if you look at previous quarters, there was a

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Speaker 1: lot of selling from global crypto tracking funds, and then

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Speaker 1: if you look at the most recent quarter, you really

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Speaker 1: didn't see that many outflows because again that seller had

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Speaker 1: already left. We've already seen this enormous depressing draw down

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Speaker 1: which has far outpaced the declines that we've seen in

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Speaker 1: the stock market. So I feel like that is acting

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Speaker 1: as a bit of a support on the downside while

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Speaker 1: you're not seeing a breakout there. And then on the upside,

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Speaker 1: even with those incremental pieces of good news, the big

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Speaker 1: backdrop hasn't changed, and that is the feed is actively

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Speaker 1: raising rates, tightening monetary policy, taking liquidity out of the system.

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Speaker 1: And it feels like that is really the huge factor here.

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Speaker 1: That just isn't an environment where sort of speculative asset

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Speaker 1: classes are going to do that well, and that I

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Speaker 1: think is what's been extinguishing every rally that maybe looks

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Speaker 1: like it's going to get off the ground. I love

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Speaker 1: this point about the Fed. I love talking about thank you,

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Speaker 1: because I remember a couple of years ago, during the pandemic,

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Speaker 1: you and I used to write stories about the very

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Speaker 1: very popular money printer go Burr meme. Oh yeah, maybe

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Speaker 1: you can tell our listeners what that was and how

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Speaker 1: it's relevant today. That was just the idea of quantitative easing,

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Speaker 1: just the FED buying a ton of bonds, every single

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Speaker 1: bond it could get its hand on, during again, the

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Speaker 1: grips of the pandemic, when it was just trying to

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Speaker 1: keep the entire system functioning. So that was Jerome Pal

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Speaker 1: sort of cranking the worrying money printer. I'm describing it badly,

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Speaker 1: just great, but that was the idea of printing money.

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Speaker 1: That they're just making money out of thin air. That's

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Speaker 1: going to devalue Fiat currencies. That hasn't happened. The dollar

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Speaker 1: is really strong right now. But if you think about

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Speaker 1: the inverse of that meme, money printer, I don't know

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Speaker 1: dies that's what's happening now. It's basically they're sucking the

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Speaker 1: money out of the system. All that money that was

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Speaker 1: created is coming out. The FED is actively whittling down

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Speaker 1: its balance sheet slow really, but it's happening, and just

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Speaker 1: the signal that this is what the FED intends to do.

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Speaker 1: It intends to shrink its balance sheet. That's really weighing

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Speaker 1: on every stripe of risk asset right now, which bitcoin,

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Speaker 1: crypto in general definitely falls into that camp, maybe the

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Speaker 1: ultimate one even yeah, the purest measure of risk, appetite

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Speaker 1: of sentiment too. Glitch was a reference to one of

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Speaker 1: the new Taylor Swift songs. I actually didn't even catch that.

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Speaker 1: Which one glitch it's called? Well, that would be easy.

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Speaker 1: But remember you and I wrote a great story I

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Speaker 1: think in anticipation of the FEDS liftoff hike back in March,

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Speaker 1: that this will be the true test of whether or

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Speaker 1: not crypto was a bubble, because if you think about

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Speaker 1: the FEDS last rate hiking campaign it was it ended

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Speaker 1: in and if you think about where bitcoin and the

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Speaker 1: crypto sphere was at that point, it was a much

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Speaker 1: less large system. There just wasn't as much money involved.

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Speaker 1: I mean, I think bitcoin was under five grand a coin,

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Speaker 1: so the state were much higher this time around. And

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Speaker 1: I mean it's still early days, I guess, but it

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Speaker 1: seems that so far the bubble has been popped. But

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Speaker 1: how smart were we to write that story. You know,

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Speaker 1: we were so on the ball, we were so ahead

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Speaker 1: of our time. Yeah. I hope our bosses are listening. Yeah,

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Speaker 1: Stacy Marie, I hope you're listening. So you mentioned the

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Speaker 1: different narratives, and we've talked on this podcast before about,

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Speaker 1: you know, some of the narratives that have existed around

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Speaker 1: bitcoin in particular, where you know, people used to say

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Speaker 1: that it's an inflation hedge or that it's a store

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Speaker 1: of value, and the narratives really have been shifting over

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Speaker 1: the last couple of years, especially this year as prices

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Speaker 1: have been crashing. So what when you talk to people,

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Speaker 1: what do they tell you the narratives are, or what

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Speaker 1: even when you're on Twitter when people are talking about crypto,

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Speaker 1: what narratives are they associating with the space? They tell

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Speaker 1: me to zoom out. Honestly, because I've asked a few

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Speaker 1: different people in a few different formats, can we put

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Speaker 1: the inflation hedge meme narrative to bed? It feels like

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Speaker 1: it absolutely hasn't worked. We're dealing in the US with

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Speaker 1: the hottest inflation in forty years. Bitcoin is what down

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Speaker 1: over fifty sixty percent year to date, and I mean,

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Speaker 1: the answer is still that I get is zoom out.

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Speaker 1: It hasn't been around for long enough. In the grand

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Speaker 1: fullness of time, this will work. So I feel like

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Speaker 1: that narrative Most would tell you, Okay, it's we've debunked

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Speaker 1: that one, but there's we put it to bed, but

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Speaker 1: some are still hanging onto it. The store of value

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Speaker 1: is something I still hear that. You know, this is

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Speaker 1: still the place where you want to put your money

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Speaker 1: if you're worried about government's basically inflating way the value

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Speaker 1: of their currencies. Obviously, that narrative has been a bit

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Speaker 1: more challenged recently. The narrative that I feel like has

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Speaker 1: fallen away is bitcoin as a means of payment. I

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Speaker 1: don't see a lot of people making the case that

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Speaker 1: this should be a currency you use day to day

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Speaker 1: to pay for coffee exactly, Taylor Swift album exactly. I'm

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Speaker 1: not gonna, you know, buy a piece of pizza or

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Speaker 1: concert tickets to the next Taylor Swift show with my bitcoin?

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Speaker 1: So can I come with you? Sure? We'll be paying

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Speaker 1: with you know, the good old greenback. Probably in terms

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Speaker 1: of what the next narrative will be though, that really

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Speaker 1: drives the space forward for better or for worse. I'm

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Speaker 1: not sure what that will be. I haven't heard a

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Speaker 1: clear consensus around what's next. I love the one on

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Speaker 1: Twitter that's one btc equals one btc. Have you've seen that?

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Speaker 1: What does that mean? Tell me what that means? Who

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Speaker 1: it means? One bitcoin is always going to be worth

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Speaker 1: one bitcoin? Okay? Cool? Does that make me want to

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Speaker 1: buy it? It should? Yeah, this is what people on

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Speaker 1: Twitter are hoping. Yeah. Yeah, I guess I'm not necessarily

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Speaker 1: the target audience for that one. Yeah I am. Yeah.

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Speaker 1: I feel like you hear that a little bit around

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Speaker 1: or more than a little bit around stable coins. Oh really,

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Speaker 1: I don't know what do people say about tablecoins? One

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Speaker 1: stable quote? Yeah, of course there's one stable Yeah, but

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Speaker 1: I think the one bitcoin equals one bitcoin is just

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Speaker 1: the idea that it's crashed, but there's hope. Well we'll

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Speaker 1: see if it gets down to one dollar and then

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Speaker 1: one bitcoin will be Oh my gosh, that's dark. You're

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Speaker 1: gonna get hat on Twitter for that. I didn't say it.

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Speaker 1: Don't at me. Please up next more with Bloomberg reporter

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Speaker 1: Katie Greifeld on how investors and traders are adapting to

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Speaker 1: Bitcoin's lack of volatility. Okay, so we're talking about how

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Speaker 1: bitcoin has been hovering around twenty volatility has come down,

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Speaker 1: the space has become a little bit more boring. You

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Speaker 1: and I also, over the last couple of years, have

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Speaker 1: been writing quite a bit about how there's so many

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Speaker 1: opportunities within the crypto space if you're a trader to

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Speaker 1: take advantage and potentially make a quick book, or to

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Speaker 1: sort of take advantage of some arbitrage or some discrepancy

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Speaker 1: within the market. So things are a little bit more boring. Now,

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Speaker 1: what are people doing? This is a great question because

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Speaker 1: it brings me back to the days where I covered

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Speaker 1: actual currencies for Bloomberg News. I started at Bloomberg as

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Speaker 1: a traditional currencies reporter, covering the dollar, the euro, the yen,

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Speaker 1: the pound, and back when I was doing it, it

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Speaker 1: wasn't fun. Nothing was happening. There was absolutely no volatility

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Speaker 1: in the space at all. I'm talking about. Like, so,

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Speaker 1: I wrote a lot of these stories about, Okay, you're

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Speaker 1: a currency trader, how do you make money? You run

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Speaker 1: a heade fund, you have to make money. What are

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Speaker 1: you doing? So it's kind of a similar idea here,

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Speaker 1: And you had a great story on this. Actually, part

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Speaker 1: of the way that people are making money is that

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Speaker 1: they're selling options on crypto. This is a way to

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Speaker 1: make money in a sideways market, not necessarily taking a

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Speaker 1: directional bet. And that you know, rhymes with some of

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Speaker 1: the stuff that you saw in traditional currencies back in

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Speaker 1: the dark days of no volatility. I thought this was

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Speaker 1: interesting too. There are some people going long. You spoke

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Speaker 1: to a portfolio manager at Ledger Prime, so I mean

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Speaker 1: hope springs eternal. I guess there. Well, that's the big point,

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Speaker 1: right And I remember speaking to somebody else at Valkyrie,

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Speaker 1: which is a crypto ascid manager, and they said, if

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Speaker 1: thecoin comes down to seventeen thousand or eighteen thousand dollars,

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Speaker 1: that they're actually buying at that level. So is this

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Speaker 1: something else that we're seeing where you do have people

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Speaker 1: who are just going to be long term and I

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Speaker 1: really mean like long term believers in the space, and

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Speaker 1: they're finding opportunities prices come down and to the point

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Speaker 1: if you've been in the space for a long time.

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Speaker 1: And when we spoke a little bit about where bitcoin

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Speaker 1: was at at sort of the peak of the last

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Speaker 1: rate hiking cycle, we're talking what dollars per coin. Even

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Speaker 1: now at like nineteen twenty thousand dollars, have you been

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Speaker 1: in this space for a long time, You're sitting on

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Speaker 1: still just magnitudes of gains. So that makes sense that

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Speaker 1: if you're a long term believer that you would just

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Speaker 1: sort of cover your eyes and keep buying because the

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Speaker 1: line will go up. There will be other October's to

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Speaker 1: look forward to October. This last point in this great

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Speaker 1: article that you wrote is really interesting to me. I

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Speaker 1: think we should look into this more. Basically creating a

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Speaker 1: distressed asset market strategy. When it comes to some of

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Speaker 1: these dows, those centralized autonomous organizations, I'm still wrapping my

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Speaker 1: mind around them, but basically they're supposed still allow the

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Speaker 1: holders to vote on different proposals. It's a different way

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Speaker 1: to run a business. They have treasuries like they have

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Speaker 1: treasury assets, not treasury bonds that they're sitting on, and

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Speaker 1: in some cases those treasuries are in distress. The prices

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Speaker 1: of the treasuries are beneath the treasury value, so that's

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Speaker 1: a really interesting arbitrage. So you can force the DOW

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Speaker 1: to potentially vote distributing that money, right, which is cool.

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Speaker 1: That feels like another traditional finance strategy coming into the

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Speaker 1: world of crypto. So I guess, you know, if you

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Speaker 1: want to fight, that's one way to do it, sort

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Speaker 1: of force a dow to liquidate the treasury and then

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Speaker 1: take those assets. Are you up for I'm up for

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Speaker 1: covering someone who wants to fight. If anyone here is

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Speaker 1: running that specific strategy, that's fascinating. Yeah, And I think

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Speaker 1: that's a really interesting way to sort of pick through

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Speaker 1: some of the speculation that we saw, especially in DAWs

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Speaker 1: because thats were so hot. I feel like a couple

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Speaker 1: of months ago, a year ago too, there was something

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Speaker 1: about stealing the Constitute, not stealing by Yeah, I'm thinking

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Speaker 1: about stealing the Declaration of Independence. No na, no, no,

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Speaker 1: no, no no, buying the constitution. So there was a lot

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Speaker 1: of that froth, and you know, just as you would

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Speaker 1: see in sort of the distressed bond market, people are

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Speaker 1: trying to capitalize on that. Yeah, this was the most

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Speaker 1: fun conversation I've ever had. This was the best. This

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Speaker 1: was the best part of my Thank you so much

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Speaker 1: for joining the podcast. Thanks for having me. You're welcome.

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Speaker 1: You can find more of Katie Grydfeldt reporting on the

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Speaker 1: Bloomberg Terminal, on Bloomberg dot com and on Twitter. She's

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Speaker 1: at k Greyfelt. On the next episode of Bloomberg Crypto,

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Speaker 1: we're gonna talk about bitcoin miners who've been having what

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Speaker 1: can reasonably be described as a very bad time of late.

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Speaker 1: Folding bitcoin prices and soaring energy costs make for a

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Speaker 1: tough combination for the companies in this sector. For more

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Speaker 1: on the challenges facing these miners, tune in tomorrow. M

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Speaker 1: This is Bloomberg Crypto, a daily podcast from Bloomberg and

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Speaker 1: I Heart Radio. For more shows from I Heart Radio,

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Speaker 1: visit the I Heart Radio app, Apple Podcasts, or wherever

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Speaker 1: you get your podcasts. Send us your comments, questions, or

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Speaker 1: suggestions for the show to Crypto at Bloomberg dot net

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Speaker 1: or find us on Twitter. We're at Crypto. The supervising

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Speaker 1: producer of Bloomberg Crypto is Vicky Verglina. Our senior producer

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Speaker 1: is Janet Babin. Our producers are Mohammed Farruk and Sharon Barriro.

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Speaker 1: Our associate producers are Ty Butler and Moses on Them.

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Speaker 1: Desta wonder At is our engineer. Original music by Leo Sidrin.

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Speaker 1: I'm Stacy Marie Schmal we'll be back tomorrow.