WEBVTT - This Week in Crypto - FOMO Returns

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<v Speaker 1>I'm Stacy Marie Ishmael, and this is Bloomberg Crypto Daily,

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<v Speaker 1>Bloomberg I Heart Podcast, and I'm Philip Lagger Crancers in

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<v Speaker 1>today for Stacy Marie Ishmael. It is Friday, January, the

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<v Speaker 1>end of the traditional work week. Is here time for

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<v Speaker 1>another This Week in Crypto episode, And you know, as

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<v Speaker 1>is often the case, weird things are happening in crypto.

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<v Speaker 1>Is crypto back? That is one question that we're going

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<v Speaker 1>to be asking this week. Bitcoin is up this year,

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<v Speaker 1>and a lot of smaller tokens are up way, way

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<v Speaker 1>more than that. Salana, which was kind of the ugly

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<v Speaker 1>step child of two thousand two, has rallied more than

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<v Speaker 1>a hundred and thirty percent, for example. Suddenly we're starting

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<v Speaker 1>to hear words like fomo again. And then we have

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<v Speaker 1>the crypto comebacks, or at least crypto comeback attempts. I

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<v Speaker 1>guess we can say the guys behind three a C,

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<v Speaker 1>the crypto hedge fund that literally blew up the industry

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<v Speaker 1>last year, are seeking money for a new startup. A

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<v Speaker 1>lady who's been charged in the world's biggest crypto heyst

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<v Speaker 1>is landing a new tech job here to help me

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<v Speaker 1>break down all of this are Bloomberg Senior editor Anna

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<v Speaker 1>Errera and Bloomberg reporter Bill Donna Hirich. Hello, welcome to

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<v Speaker 1>the show. Everything is back. After pretty appalling we're now

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<v Speaker 1>seeing words like fomo appear again. We've had a long

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<v Speaker 1>winning streak for bitcoin, vill Donna, do you want to

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<v Speaker 1>start talking a little bit about what's happening in markets

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<v Speaker 1>from your advantage point? What's going on here? Bitcoin is back.

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<v Speaker 1>Bitcoin is back, baby, I think is what people are

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<v Speaker 1>saying on Twitter. So we we've had this super strong

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<v Speaker 1>start to the year for cryptocurrencies where we've seen Bitcoin

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<v Speaker 1>rallying more than in the first couple of weeks of

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<v Speaker 1>the year, and you're seeing some retail investors waiting back in,

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<v Speaker 1>maybe tentatively, but they're waiting back in, and possibly institutions

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<v Speaker 1>also showing some interest there. But you know, I think

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<v Speaker 1>we can ascribe it to a couple of different things

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<v Speaker 1>that are happening. The main one being that we're also

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<v Speaker 1>seeing a resurgence in risk appetite when it comes to

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<v Speaker 1>the US equities market, for example, or even just globally speaking,

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<v Speaker 1>equities have been rallying to start the year. So we

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<v Speaker 1>have the SMP if I fund it up. We have

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<v Speaker 1>tech stocks up, and we know in the past, at

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<v Speaker 1>least before f t X, for the majority of crypto

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<v Speaker 1>was trading in tandem in the same way that stocks

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<v Speaker 1>were trading in the US, and so you're seeing the

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<v Speaker 1>two of them moving in similar fashion. Once again, just

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<v Speaker 1>with crypto, the moves have been much more, much bigger,

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<v Speaker 1>much more pronounced. I took a look at the cryptocid

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<v Speaker 1>worksheet that we have today. I saw Solana up and

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<v Speaker 1>thirty six. It seems like in the olt coin space

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<v Speaker 1>it's even more pronounced, right, And this is the thing

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<v Speaker 1>that maybe a traditional asset investor might warn you about

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<v Speaker 1>and say, Okay, maybe don't wait in into the crypto

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<v Speaker 1>space over there with with some of those smaller coins,

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<v Speaker 1>and maybe don't pay attention with what's going on with

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<v Speaker 1>doage coin, etcetera, etcetera. But that tends to happen when

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<v Speaker 1>we do see a resurgence in risk capitae, when we

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<v Speaker 1>do see enthusiasm coming back in. So you have Bitcoin

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<v Speaker 1>rallying big, you have Ether coming big, and then when

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<v Speaker 1>you see the smaller coins, it's sort of telling of

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<v Speaker 1>what's going on in the space. And then similarly in

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<v Speaker 1>the equity space, because I cover your stock markets as well.

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<v Speaker 1>We are also seeing meme stocks, certain memes stocks just

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<v Speaker 1>rallying like crazy. So you are just seeing it in

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<v Speaker 1>certain pockets of of of the different markets. If you

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<v Speaker 1>look at last year, we had all these you know,

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<v Speaker 1>massive blow ups, starting with Terry us d terror USB

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<v Speaker 1>and its sister token Luna lost their head to the dollar.

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<v Speaker 1>In the last few weeks, they had a spectacular meltdown,

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<v Speaker 1>and then bitcoin and crypto folse off a cliff, and

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<v Speaker 1>then there are a couple of weeks of you know,

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<v Speaker 1>either stability or even climbing back a bit, and then

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<v Speaker 1>the next few drops three a C crypt hedge front

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<v Speaker 1>three arrows Capital has been ordered into liquidation by a

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<v Speaker 1>court in the British Virgin Islands. And then saying that

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<v Speaker 1>pattern kind of played out a couple of times during

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<v Speaker 1>and so what you're saying is basically, there is still

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<v Speaker 1>a risk hanging over us that there's ugliness out there,

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<v Speaker 1>whether or not spawned in some way, shape or formed

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<v Speaker 1>by f t X, that we still haven't really clear. Yeah,

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<v Speaker 1>And I think what's interesting is because that situation hasn't

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<v Speaker 1>been resolved. The issues we left the year with so

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<v Speaker 1>like do you put your money in exchange? Maybe you

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<v Speaker 1>don't want to, kno, because you're worried there will be

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<v Speaker 1>more default If not, where do you trade? Like are

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<v Speaker 1>you do you? Are you sure you know who else

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<v Speaker 1>is going to collapse? And do you want to expose

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<v Speaker 1>yourself to more counterparty risk or make new investments because

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<v Speaker 1>you might need them to you know, carry your butt

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<v Speaker 1>if something happens um then you know, until that gets solved,

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<v Speaker 1>then it's it's interesting to see, you know, or to

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<v Speaker 1>to see the price going up because there might be

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<v Speaker 1>a natural ceiling to that I wonder like or maybe not.

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<v Speaker 1>Cryptos very weird and crazy, and you know, it's always

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<v Speaker 1>I'm always skeptical of people have clear reasons about why

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<v Speaker 1>it goes up when it explodes, go and goes up

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<v Speaker 1>a lot, or why it falls, you know, so every

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<v Speaker 1>rally people have had to come up with like their

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<v Speaker 1>narrative about why it's gone up, and it's sometimes it's

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<v Speaker 1>a narrative that develops a sort of excuse in a way,

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<v Speaker 1>so you know it might go up. I don't know. Unfortunately,

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<v Speaker 1>it's sort of my job to predict it. And I

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<v Speaker 1>think Anna is right and if I can just add,

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<v Speaker 1>you know, because we are sort of trying to develop

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<v Speaker 1>these now ratives around why the rallies might be happening

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<v Speaker 1>at any given point. What a lot of investors tend

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<v Speaker 1>to do is look at technical signals. And the thing

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<v Speaker 1>that we did see at the start of this year

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<v Speaker 1>is Bitcoin, for example, trading above it's fifty day moving average,

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<v Speaker 1>which is just like lingo, like a technical indicator to

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<v Speaker 1>say that it's rallying so fast it's moving above the

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<v Speaker 1>it's average price over the last fifty days, and something

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<v Speaker 1>like that can maybe be a sort of trigger signal

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<v Speaker 1>for others to also step in. And so maybe you know,

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<v Speaker 1>that's part of the explanation as well. But I do

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<v Speaker 1>want to add an Anna touched on this as well.

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<v Speaker 1>Trading volumes are still like anemic. They're super low compared

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<v Speaker 1>to what we've seen in the past, and you do

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<v Speaker 1>still have retail and institutional investors who are just terrified.

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<v Speaker 1>They've totally bailed out from from the space, and they're

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<v Speaker 1>not really looking to wait back in in any meaningful way,

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<v Speaker 1>at least at least not yet. And actually I want

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<v Speaker 1>to see some something that Anna said, I think he

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<v Speaker 1>said weird and crazy, and that's kind of the perfect segue.

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<v Speaker 1>It's the best explanation, and it's also a perfect segue

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<v Speaker 1>into what we're gonna talk about next, because we're gonna

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<v Speaker 1>talk about the founders of three A C returning to

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<v Speaker 1>raise money for a new crypto venture. And we covered

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<v Speaker 1>this together vivid memories from both what happened with three

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<v Speaker 1>A C but also what happened on crypto Twitter when

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<v Speaker 1>this got out there. Let's first rewind a little bit

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<v Speaker 1>for those who are not as familiar with three A

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<v Speaker 1>C as we maybe are, so basically, in a nutshelter

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<v Speaker 1>hours capital run out of money, they couldn't sort of

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<v Speaker 1>the investments, that the value of their investments went went

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<v Speaker 1>down and they couldn't meet margin calls from from their

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<v Speaker 1>lenders um and so they went past and since then

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<v Speaker 1>we've not been able to figure out where the founders

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<v Speaker 1>are based. They've been it's not like they disappeared. They're

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<v Speaker 1>been active on Twitter. They are emerged, re emerged somewhat

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<v Speaker 1>triumphantly after FTX went bust um, but they haven't sort

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<v Speaker 1>of been located and they're in discussions with the liquidators

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<v Speaker 1>of their fund, who say they aren't cooperating and so

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<v Speaker 1>it's not like they went completely quiet and we didn't

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<v Speaker 1>know where they were. But obviously there's still a lot

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<v Speaker 1>of people that are very happy with them, especially because

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<v Speaker 1>like three a C Was as you were saying that

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<v Speaker 1>we've been seen lots of like dominoes fall, right. So

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<v Speaker 1>they then were counterparties to many other players, among which

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<v Speaker 1>is Genesis, which we mentioned before, who has at one

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<v Speaker 1>point two billion claim with them. So you know, there's

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<v Speaker 1>lots of people that harbor sort of, uh, not the

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<v Speaker 1>nicest of sentiments towards the founders. And so when these

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<v Speaker 1>guys reappeared this week or rather sort of, it became

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<v Speaker 1>known that they were running around or I guess zooming

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<v Speaker 1>around pitching a new idea for a venture and trying

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<v Speaker 1>to raise million to launch an exchange to trade claims

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<v Speaker 1>of bankrupt crypto companies. Then people had a lot to

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<v Speaker 1>say because obviously, you know, um, it's just crazy. As

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<v Speaker 1>we said we said before, some considered a bit a

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<v Speaker 1>bit in saying that even before their own issues are resolved,

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<v Speaker 1>are the issues of their fund that they're trying to

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<v Speaker 1>set up another venture that, of all things, trades claims.

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<v Speaker 1>And the point being that this is sort of an

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<v Speaker 1>a liquid market. It's hard to trade these things, but

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<v Speaker 1>there is demand, and obviously there are there's no shortage

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<v Speaker 1>of bankrupt crypto companies now and so no short of

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<v Speaker 1>claims and opportunities there. And we have to mention what

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<v Speaker 1>they're proposing to name this new venture, which is G

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<v Speaker 1>t X, which a lot of people immediately seized upon

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<v Speaker 1>because it's so similar to F t X, except that

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<v Speaker 1>G comes after F. Of course, there was a lot

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<v Speaker 1>of F plus one on crypto Twitter. You have to wonder,

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<v Speaker 1>I mean, you can almost not pick, even if it

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<v Speaker 1>was a tentative kind of placehold the name or whatever.

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<v Speaker 1>Just by picking this, I mean, they must have known

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<v Speaker 1>that people were going to skewer them for picking such

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<v Speaker 1>a name. Huh. Twitter was the best place to get

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<v Speaker 1>a sentiment check, just to read on sentiment on on

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<v Speaker 1>what people were feeling about this. And in the stories

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<v Speaker 1>that we were putting together in regards to this, there

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<v Speaker 1>was this great quote from Nick Carter at Castle Island

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<v Speaker 1>Ventures and he said, it's akin to our sinists returning

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<v Speaker 1>to the scene of the crime and offering to charge

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<v Speaker 1>their victims for buckets of water, which I just really

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<v Speaker 1>liked because it sort of ties up exactly what people

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<v Speaker 1>were um sort of talking about in regards to this

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<v Speaker 1>on Twitter. And we'll be right back with more of

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<v Speaker 1>the week's top crypto stories with Anna and Willdonna. Uh.

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<v Speaker 1>I want to talk about another comeback story. Um, we

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<v Speaker 1>want to touch upon it briefly because Razzle Cohn is

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<v Speaker 1>back in the news. Heather Morgan, I believe is her

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<v Speaker 1>given name, the Crocodile of Wall Street, the Crocodile of

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<v Speaker 1>Wall Street. Yes, and she is now I believe, awaiting

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<v Speaker 1>trial for involvement or alleged I should say, involvement in

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<v Speaker 1>one of the biggest crypto heists in history. And it

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<v Speaker 1>emerged this week that she has a new job or

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<v Speaker 1>she's about to have a new job. Yes, so she

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<v Speaker 1>has a new job. The founders of three I C

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<v Speaker 1>apparently have a new job. So it's the comeback week

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<v Speaker 1>for a lot of crypto people or formerly uh disgraced

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<v Speaker 1>maybe we can say crypto people. She had been accused

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<v Speaker 1>with another person of stealing four point five billion dollars

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<v Speaker 1>worth of bitcoin from bitfn x back in the day,

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<v Speaker 1>and we don't know where her new job is going

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<v Speaker 1>to be. I think all that's been revealed is that

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<v Speaker 1>she's going to be working in tech, but it does

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<v Speaker 1>seem like she's on her way to having a new role.

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<v Speaker 1>Everybody gets a second chance in crypto, and memories maybe

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<v Speaker 1>are shorter than elsewhere. I don't know. We are going

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<v Speaker 1>to move on to talk about more. I don't know

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<v Speaker 1>if you want to call it serious news here. UM

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<v Speaker 1>publicly traded crypto exchange coin Base has been in the

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<v Speaker 1>news quite a lot over the past couple of weeks.

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<v Speaker 1>We've discussed them here on this podcast. Um they're cutting jobs,

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<v Speaker 1>and then we had a headline the other day saying

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<v Speaker 1>they will assess their global operations. What does that mean?

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<v Speaker 1>What are they looking at right now? Anna? I think

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<v Speaker 1>the word they use was bright size, but we thought

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<v Speaker 1>it was too jargony, so as we were doing the

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<v Speaker 1>headline without assessment made more more sense to normal humans.

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<v Speaker 1>But you know, they're shutting down their operations in Japan,

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<v Speaker 1>they've said, And so one of the reporters for Bloomberg

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<v Speaker 1>Quicktake in Davos asked the chief policy officer, I believe

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<v Speaker 1>whether they were going to shut down and think more

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<v Speaker 1>or what the plans were, and they sort of He

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<v Speaker 1>said that the plan was in tradatural expansion, but they

0:13:04.920 --> 0:13:06.959
<v Speaker 1>were going to make sure that the sort of their

0:13:07.000 --> 0:13:10.080
<v Speaker 1>operations in every region or are of the right size

0:13:10.559 --> 0:13:14.600
<v Speaker 1>for the opportunity there. And you know, obviously the opportunity

0:13:14.600 --> 0:13:16.640
<v Speaker 1>seems to have shrunk a bit over the last year,

0:13:16.760 --> 0:13:20.880
<v Speaker 1>so you know, question is does that mean downsizing growing?

0:13:21.360 --> 0:13:23.839
<v Speaker 1>But yeah, they're they're going to be looking at where

0:13:23.840 --> 0:13:25.960
<v Speaker 1>they are, what they do, whether they needs to grow

0:13:26.080 --> 0:13:29.719
<v Speaker 1>or shrink, which which is interesting. There's another company there

0:13:29.760 --> 0:13:34.480
<v Speaker 1>is a crypto bank named Silvi gate Um, and this

0:13:34.559 --> 0:13:38.200
<v Speaker 1>is quite an interesting one because there's sort of an

0:13:38.200 --> 0:13:42.120
<v Speaker 1>interface between the crypto world and I guess what we

0:13:42.160 --> 0:13:45.520
<v Speaker 1>could call the regular world of Fiat currencies, etcetera, etcetera.

0:13:46.240 --> 0:13:49.000
<v Speaker 1>And they've been having some troubles, but they did come

0:13:49.080 --> 0:13:55.120
<v Speaker 1>up with result the other day and Vildanna, the share

0:13:55.160 --> 0:13:58.640
<v Speaker 1>re action was actually quite positive. They've been absolutely pummeled

0:13:58.640 --> 0:14:00.400
<v Speaker 1>over the past couple of months. We should going out,

0:14:00.480 --> 0:14:04.720
<v Speaker 1>but the reaction when they presented results finally was fairly positive.

0:14:05.320 --> 0:14:07.800
<v Speaker 1>What's going on there? Yes, a silver gate is known,

0:14:07.960 --> 0:14:12.240
<v Speaker 1>as you said, the biggest crypto bank, and their shares

0:14:12.280 --> 0:14:17.240
<v Speaker 1>had risen just astronomically during the first couple of pandemic

0:14:17.320 --> 0:14:20.600
<v Speaker 1>years and then obviously in two we saw a huge,

0:14:20.800 --> 0:14:23.840
<v Speaker 1>huge draw down just you know, similar to what we

0:14:23.880 --> 0:14:27.640
<v Speaker 1>saw with other cryptocurrencies, but their shares just absolutely plummeted,

0:14:27.680 --> 0:14:30.160
<v Speaker 1>and I think the market was trying to suss out

0:14:30.240 --> 0:14:33.640
<v Speaker 1>exactly how much exposure they had or how exactly they

0:14:33.640 --> 0:14:35.840
<v Speaker 1>were going to be impacted by all of the different

0:14:36.080 --> 0:14:38.560
<v Speaker 1>you know blow ups, the ones that we've been talking

0:14:38.560 --> 0:14:42.200
<v Speaker 1>about today on on this episode, and so recently they

0:14:42.240 --> 0:14:44.800
<v Speaker 1>actually they told in messers, they came out and said

0:14:44.880 --> 0:14:48.160
<v Speaker 1>earlier this month that they had planned to fire something

0:14:48.240 --> 0:14:52.560
<v Speaker 1>like fort of the bank's staff and that they saw

0:14:52.880 --> 0:14:57.320
<v Speaker 1>a huge surge in people looking to withdraw, uh, take

0:14:57.360 --> 0:15:00.760
<v Speaker 1>their money out of silver Gate, and so that's what's

0:15:00.760 --> 0:15:04.400
<v Speaker 1>been some of the trouble that's been facing this company.

0:15:04.440 --> 0:15:09.560
<v Speaker 1>But yes, we saw this maybe um peculiar or interesting

0:15:09.680 --> 0:15:12.840
<v Speaker 1>we can call it reaction in share price, but we

0:15:12.920 --> 0:15:15.240
<v Speaker 1>tend to see stuff like that happen all the time,

0:15:15.240 --> 0:15:20.160
<v Speaker 1>where maybe, uh, the company's shares react in the opposite

0:15:20.200 --> 0:15:22.560
<v Speaker 1>way of what you might think. Analysts might tell you

0:15:22.600 --> 0:15:25.480
<v Speaker 1>that already the drawdown had been so so huge that

0:15:25.640 --> 0:15:28.080
<v Speaker 1>you would assume maybe a bounce back would be coming

0:15:28.360 --> 0:15:31.080
<v Speaker 1>at some point, but yeah, it's very interesting to follow

0:15:31.160 --> 0:15:34.400
<v Speaker 1>what's going on with the bank because it does give

0:15:34.440 --> 0:15:37.960
<v Speaker 1>you sort of um a read on on the industry

0:15:38.080 --> 0:15:42.880
<v Speaker 1>as well. Thank you, Anna and Will Donna. This was

0:15:42.920 --> 0:15:47.240
<v Speaker 1>Bloomberg's Anna Arera and Bill Donna Rich. You can find

0:15:47.280 --> 0:15:49.840
<v Speaker 1>more of their reporting on the Bloomberg Terminal and on

0:15:49.960 --> 0:15:53.560
<v Speaker 1>Bloomberg dot com. For more, be sure to check out

0:15:53.600 --> 0:16:04.480
<v Speaker 1>our twice weekly newsletter, Bloomberg Crypto. This is Bloomberg Crypto,

0:16:04.720 --> 0:16:08.000
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0:16:14.920 --> 0:16:17.480
<v Speaker 1>Send us your comments, questions, or suggestions for the show

0:16:17.640 --> 0:16:24.160
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0:16:24.160 --> 0:16:28.320
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0:16:28.960 --> 0:16:32.560
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0:16:36.360 --> 0:16:41.880
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0:16:41.960 --> 0:16:43.680
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