Speaker 1: I'm Stacy Marie Ishmael, and this is Bloomberg Crypto Daily,
Speaker 1: Bloomberg I Heart Podcast, and I'm Philip Lagger Crancers in
Speaker 1: today for Stacy Marie Ishmael. It is Friday, January, the
Speaker 1: end of the traditional work week. Is here time for
Speaker 1: another This Week in Crypto episode, And you know, as
Speaker 1: is often the case, weird things are happening in crypto.
Speaker 1: Is crypto back? That is one question that we're going
Speaker 1: to be asking this week. Bitcoin is up this year,
Speaker 1: and a lot of smaller tokens are up way, way
Speaker 1: more than that. Salana, which was kind of the ugly
Speaker 1: step child of two thousand two, has rallied more than
Speaker 1: a hundred and thirty percent, for example. Suddenly we're starting
Speaker 1: to hear words like fomo again. And then we have
Speaker 1: the crypto comebacks, or at least crypto comeback attempts. I
Speaker 1: guess we can say the guys behind three a C,
Speaker 1: the crypto hedge fund that literally blew up the industry
Speaker 1: last year, are seeking money for a new startup. A
Speaker 1: lady who's been charged in the world's biggest crypto heyst
Speaker 1: is landing a new tech job here to help me
Speaker 1: break down all of this are Bloomberg Senior editor Anna
Speaker 1: Errera and Bloomberg reporter Bill Donna Hirich. Hello, welcome to
Speaker 1: the show. Everything is back. After pretty appalling we're now
Speaker 1: seeing words like fomo appear again. We've had a long
Speaker 1: winning streak for bitcoin, vill Donna, do you want to
Speaker 1: start talking a little bit about what's happening in markets
Speaker 1: from your advantage point? What's going on here? Bitcoin is back.
Speaker 1: Bitcoin is back, baby, I think is what people are
Speaker 1: saying on Twitter. So we we've had this super strong
Speaker 1: start to the year for cryptocurrencies where we've seen Bitcoin
Speaker 1: rallying more than in the first couple of weeks of
Speaker 1: the year, and you're seeing some retail investors waiting back in,
Speaker 1: maybe tentatively, but they're waiting back in, and possibly institutions
Speaker 1: also showing some interest there. But you know, I think
Speaker 1: we can ascribe it to a couple of different things
Speaker 1: that are happening. The main one being that we're also
Speaker 1: seeing a resurgence in risk appetite when it comes to
Speaker 1: the US equities market, for example, or even just globally speaking,
Speaker 1: equities have been rallying to start the year. So we
Speaker 1: have the SMP if I fund it up. We have
Speaker 1: tech stocks up, and we know in the past, at
Speaker 1: least before f t X, for the majority of crypto
Speaker 1: was trading in tandem in the same way that stocks
Speaker 1: were trading in the US, and so you're seeing the
Speaker 1: two of them moving in similar fashion. Once again, just
Speaker 1: with crypto, the moves have been much more, much bigger,
Speaker 1: much more pronounced. I took a look at the cryptocid
Speaker 1: worksheet that we have today. I saw Solana up and
Speaker 1: thirty six. It seems like in the olt coin space
Speaker 1: it's even more pronounced, right, And this is the thing
Speaker 1: that maybe a traditional asset investor might warn you about
Speaker 1: and say, Okay, maybe don't wait in into the crypto
Speaker 1: space over there with with some of those smaller coins,
Speaker 1: and maybe don't pay attention with what's going on with
Speaker 1: doage coin, etcetera, etcetera. But that tends to happen when
Speaker 1: we do see a resurgence in risk capitae, when we
Speaker 1: do see enthusiasm coming back in. So you have Bitcoin
Speaker 1: rallying big, you have Ether coming big, and then when
Speaker 1: you see the smaller coins, it's sort of telling of
Speaker 1: what's going on in the space. And then similarly in
Speaker 1: the equity space, because I cover your stock markets as well.
Speaker 1: We are also seeing meme stocks, certain memes stocks just
Speaker 1: rallying like crazy. So you are just seeing it in
Speaker 1: certain pockets of of of the different markets. If you
Speaker 1: look at last year, we had all these you know,
Speaker 1: massive blow ups, starting with Terry us d terror USB
Speaker 1: and its sister token Luna lost their head to the dollar.
Speaker 1: In the last few weeks, they had a spectacular meltdown,
Speaker 1: and then bitcoin and crypto folse off a cliff, and
Speaker 1: then there are a couple of weeks of you know,
Speaker 1: either stability or even climbing back a bit, and then
Speaker 1: the next few drops three a C crypt hedge front
Speaker 1: three arrows Capital has been ordered into liquidation by a
Speaker 1: court in the British Virgin Islands. And then saying that
Speaker 1: pattern kind of played out a couple of times during
Speaker 1: and so what you're saying is basically, there is still
Speaker 1: a risk hanging over us that there's ugliness out there,
Speaker 1: whether or not spawned in some way, shape or formed
Speaker 1: by f t X, that we still haven't really clear. Yeah,
Speaker 1: And I think what's interesting is because that situation hasn't
Speaker 1: been resolved. The issues we left the year with so
Speaker 1: like do you put your money in exchange? Maybe you
Speaker 1: don't want to, kno, because you're worried there will be
Speaker 1: more default If not, where do you trade? Like are
Speaker 1: you do you? Are you sure you know who else
Speaker 1: is going to collapse? And do you want to expose
Speaker 1: yourself to more counterparty risk or make new investments because
Speaker 1: you might need them to you know, carry your butt
Speaker 1: if something happens um then you know, until that gets solved,
Speaker 1: then it's it's interesting to see, you know, or to
Speaker 1: to see the price going up because there might be
Speaker 1: a natural ceiling to that I wonder like or maybe not.
Speaker 1: Cryptos very weird and crazy, and you know, it's always
Speaker 1: I'm always skeptical of people have clear reasons about why
Speaker 1: it goes up when it explodes, go and goes up
Speaker 1: a lot, or why it falls, you know, so every
Speaker 1: rally people have had to come up with like their
Speaker 1: narrative about why it's gone up, and it's sometimes it's
Speaker 1: a narrative that develops a sort of excuse in a way,
Speaker 1: so you know it might go up. I don't know. Unfortunately,
Speaker 1: it's sort of my job to predict it. And I
Speaker 1: think Anna is right and if I can just add,
Speaker 1: you know, because we are sort of trying to develop
Speaker 1: these now ratives around why the rallies might be happening
Speaker 1: at any given point. What a lot of investors tend
Speaker 1: to do is look at technical signals. And the thing
Speaker 1: that we did see at the start of this year
Speaker 1: is Bitcoin, for example, trading above it's fifty day moving average,
Speaker 1: which is just like lingo, like a technical indicator to
Speaker 1: say that it's rallying so fast it's moving above the
Speaker 1: it's average price over the last fifty days, and something
Speaker 1: like that can maybe be a sort of trigger signal
Speaker 1: for others to also step in. And so maybe you know,
Speaker 1: that's part of the explanation as well. But I do
Speaker 1: want to add an Anna touched on this as well.
Speaker 1: Trading volumes are still like anemic. They're super low compared
Speaker 1: to what we've seen in the past, and you do
Speaker 1: still have retail and institutional investors who are just terrified.
Speaker 1: They've totally bailed out from from the space, and they're
Speaker 1: not really looking to wait back in in any meaningful way,
Speaker 1: at least at least not yet. And actually I want
Speaker 1: to see some something that Anna said, I think he
Speaker 1: said weird and crazy, and that's kind of the perfect segue.
Speaker 1: It's the best explanation, and it's also a perfect segue
Speaker 1: into what we're gonna talk about next, because we're gonna
Speaker 1: talk about the founders of three A C returning to
Speaker 1: raise money for a new crypto venture. And we covered
Speaker 1: this together vivid memories from both what happened with three
Speaker 1: A C but also what happened on crypto Twitter when
Speaker 1: this got out there. Let's first rewind a little bit
Speaker 1: for those who are not as familiar with three A
Speaker 1: C as we maybe are, so basically, in a nutshelter
Speaker 1: hours capital run out of money, they couldn't sort of
Speaker 1: the investments, that the value of their investments went went
Speaker 1: down and they couldn't meet margin calls from from their
Speaker 1: lenders um and so they went past and since then
Speaker 1: we've not been able to figure out where the founders
Speaker 1: are based. They've been it's not like they disappeared. They're
Speaker 1: been active on Twitter. They are emerged, re emerged somewhat
Speaker 1: triumphantly after FTX went bust um, but they haven't sort
Speaker 1: of been located and they're in discussions with the liquidators
Speaker 1: of their fund, who say they aren't cooperating and so
Speaker 1: it's not like they went completely quiet and we didn't
Speaker 1: know where they were. But obviously there's still a lot
Speaker 1: of people that are very happy with them, especially because
Speaker 1: like three a C Was as you were saying that
Speaker 1: we've been seen lots of like dominoes fall, right. So
Speaker 1: they then were counterparties to many other players, among which
Speaker 1: is Genesis, which we mentioned before, who has at one
Speaker 1: point two billion claim with them. So you know, there's
Speaker 1: lots of people that harbor sort of, uh, not the
Speaker 1: nicest of sentiments towards the founders. And so when these
Speaker 1: guys reappeared this week or rather sort of, it became
Speaker 1: known that they were running around or I guess zooming
Speaker 1: around pitching a new idea for a venture and trying
Speaker 1: to raise million to launch an exchange to trade claims
Speaker 1: of bankrupt crypto companies. Then people had a lot to
Speaker 1: say because obviously, you know, um, it's just crazy. As
Speaker 1: we said we said before, some considered a bit a
Speaker 1: bit in saying that even before their own issues are resolved,
Speaker 1: are the issues of their fund that they're trying to
Speaker 1: set up another venture that, of all things, trades claims.
Speaker 1: And the point being that this is sort of an
Speaker 1: a liquid market. It's hard to trade these things, but
Speaker 1: there is demand, and obviously there are there's no shortage
Speaker 1: of bankrupt crypto companies now and so no short of
Speaker 1: claims and opportunities there. And we have to mention what
Speaker 1: they're proposing to name this new venture, which is G
Speaker 1: t X, which a lot of people immediately seized upon
Speaker 1: because it's so similar to F t X, except that
Speaker 1: G comes after F. Of course, there was a lot
Speaker 1: of F plus one on crypto Twitter. You have to wonder,
Speaker 1: I mean, you can almost not pick, even if it
Speaker 1: was a tentative kind of placehold the name or whatever.
Speaker 1: Just by picking this, I mean, they must have known
Speaker 1: that people were going to skewer them for picking such
Speaker 1: a name. Huh. Twitter was the best place to get
Speaker 1: a sentiment check, just to read on sentiment on on
Speaker 1: what people were feeling about this. And in the stories
Speaker 1: that we were putting together in regards to this, there
Speaker 1: was this great quote from Nick Carter at Castle Island
Speaker 1: Ventures and he said, it's akin to our sinists returning
Speaker 1: to the scene of the crime and offering to charge
Speaker 1: their victims for buckets of water, which I just really
Speaker 1: liked because it sort of ties up exactly what people
Speaker 1: were um sort of talking about in regards to this
Speaker 1: on Twitter. And we'll be right back with more of
Speaker 1: the week's top crypto stories with Anna and Willdonna. Uh.
Speaker 1: I want to talk about another comeback story. Um, we
Speaker 1: want to touch upon it briefly because Razzle Cohn is
Speaker 1: back in the news. Heather Morgan, I believe is her
Speaker 1: given name, the Crocodile of Wall Street, the Crocodile of
Speaker 1: Wall Street. Yes, and she is now I believe, awaiting
Speaker 1: trial for involvement or alleged I should say, involvement in
Speaker 1: one of the biggest crypto heists in history. And it
Speaker 1: emerged this week that she has a new job or
Speaker 1: she's about to have a new job. Yes, so she
Speaker 1: has a new job. The founders of three I C
Speaker 1: apparently have a new job. So it's the comeback week
Speaker 1: for a lot of crypto people or formerly uh disgraced
Speaker 1: maybe we can say crypto people. She had been accused
Speaker 1: with another person of stealing four point five billion dollars
Speaker 1: worth of bitcoin from bitfn x back in the day,
Speaker 1: and we don't know where her new job is going
Speaker 1: to be. I think all that's been revealed is that
Speaker 1: she's going to be working in tech, but it does
Speaker 1: seem like she's on her way to having a new role.
Speaker 1: Everybody gets a second chance in crypto, and memories maybe
Speaker 1: are shorter than elsewhere. I don't know. We are going
Speaker 1: to move on to talk about more. I don't know
Speaker 1: if you want to call it serious news here. UM
Speaker 1: publicly traded crypto exchange coin Base has been in the
Speaker 1: news quite a lot over the past couple of weeks.
Speaker 1: We've discussed them here on this podcast. Um they're cutting jobs,
Speaker 1: and then we had a headline the other day saying
Speaker 1: they will assess their global operations. What does that mean?
Speaker 1: What are they looking at right now? Anna? I think
Speaker 1: the word they use was bright size, but we thought
Speaker 1: it was too jargony, so as we were doing the
Speaker 1: headline without assessment made more more sense to normal humans.
Speaker 1: But you know, they're shutting down their operations in Japan,
Speaker 1: they've said, And so one of the reporters for Bloomberg
Speaker 1: Quicktake in Davos asked the chief policy officer, I believe
Speaker 1: whether they were going to shut down and think more
Speaker 1: or what the plans were, and they sort of He
Speaker 1: said that the plan was in tradatural expansion, but they
Speaker 1: were going to make sure that the sort of their
Speaker 1: operations in every region or are of the right size
Speaker 1: for the opportunity there. And you know, obviously the opportunity
Speaker 1: seems to have shrunk a bit over the last year,
Speaker 1: so you know, question is does that mean downsizing growing?
Speaker 1: But yeah, they're they're going to be looking at where
Speaker 1: they are, what they do, whether they needs to grow
Speaker 1: or shrink, which which is interesting. There's another company there
Speaker 1: is a crypto bank named Silvi gate Um, and this
Speaker 1: is quite an interesting one because there's sort of an
Speaker 1: interface between the crypto world and I guess what we
Speaker 1: could call the regular world of Fiat currencies, etcetera, etcetera.
Speaker 1: And they've been having some troubles, but they did come
Speaker 1: up with result the other day and Vildanna, the share
Speaker 1: re action was actually quite positive. They've been absolutely pummeled
Speaker 1: over the past couple of months. We should going out,
Speaker 1: but the reaction when they presented results finally was fairly positive.
Speaker 1: What's going on there? Yes, a silver gate is known,
Speaker 1: as you said, the biggest crypto bank, and their shares
Speaker 1: had risen just astronomically during the first couple of pandemic
Speaker 1: years and then obviously in two we saw a huge,
Speaker 1: huge draw down just you know, similar to what we
Speaker 1: saw with other cryptocurrencies, but their shares just absolutely plummeted,
Speaker 1: and I think the market was trying to suss out
Speaker 1: exactly how much exposure they had or how exactly they
Speaker 1: were going to be impacted by all of the different
Speaker 1: you know blow ups, the ones that we've been talking
Speaker 1: about today on on this episode, and so recently they
Speaker 1: actually they told in messers, they came out and said
Speaker 1: earlier this month that they had planned to fire something
Speaker 1: like fort of the bank's staff and that they saw
Speaker 1: a huge surge in people looking to withdraw, uh, take
Speaker 1: their money out of silver Gate, and so that's what's
Speaker 1: been some of the trouble that's been facing this company.
Speaker 1: But yes, we saw this maybe um peculiar or interesting
Speaker 1: we can call it reaction in share price, but we
Speaker 1: tend to see stuff like that happen all the time,
Speaker 1: where maybe, uh, the company's shares react in the opposite
Speaker 1: way of what you might think. Analysts might tell you
Speaker 1: that already the drawdown had been so so huge that
Speaker 1: you would assume maybe a bounce back would be coming
Speaker 1: at some point, but yeah, it's very interesting to follow
Speaker 1: what's going on with the bank because it does give
Speaker 1: you sort of um a read on on the industry
Speaker 1: as well. Thank you, Anna and Will Donna. This was
Speaker 1: Bloomberg's Anna Arera and Bill Donna Rich. You can find
Speaker 1: more of their reporting on the Bloomberg Terminal and on
Speaker 1: Bloomberg dot com. For more, be sure to check out
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Speaker 1: to Crypto at Bloomberg dot net. The supervising producer of
Speaker 1: Bloomberg Crypto is Vicky Verglina. Our senior producer is Janet Babin.
Speaker 1: Our producers are Mohammed Faruk and Sharon Barriro. Our associate
Speaker 1: producers are Ty Butler and Moses on Them. Raphael M.
Speaker 1: Seeley is our engineer. Original music by Leo Sidrin. I'm Stacy,
Speaker 1: Marie Ishmael. Have a great weekend.