WEBVTT - Why September is Crypto’s Cruelest Month

0:00:02.480 --> 0:00:06.040
<v Speaker 1>This is Bloomberg Crypto Daily Bloomberg I heard podcast, and

0:00:06.080 --> 0:00:10.200
<v Speaker 1>I'm Stacy Marie Ishmael, Managing editor of Crypto for Bloomberg News.

0:00:10.720 --> 0:00:28.160
<v Speaker 1>It's Friday, September. With apologies in advance to t. S. Eliott.

0:00:28.640 --> 0:00:32.400
<v Speaker 1>In finance, September is currently held to be the cruelest

0:00:32.479 --> 0:00:35.839
<v Speaker 1>month of the trading calendar. This extends to crypto markets

0:00:35.880 --> 0:00:39.519
<v Speaker 1>to almost every year since two thousand thirteen, Bitcoin prices

0:00:39.520 --> 0:00:43.919
<v Speaker 1>have struggled in September and market conditions have been especially

0:00:44.000 --> 0:00:47.600
<v Speaker 1>unforgiving this year. So what's the outlook for crypto asset

0:00:47.640 --> 0:00:51.479
<v Speaker 1>prices as we leave September behind? Joining me now from Sydney,

0:00:51.520 --> 0:00:54.840
<v Speaker 1>we have Jamie Kots, crypto market analyst for Bloomberg Intelligence.

0:00:55.160 --> 0:00:57.080
<v Speaker 1>I was of the view that really we would bottom

0:00:57.080 --> 0:00:59.040
<v Speaker 1>out in the second half of this year, and I

0:00:59.080 --> 0:01:13.720
<v Speaker 1>still think that is entirely possible. Jamie. What a pleasure

0:01:13.720 --> 0:01:15.160
<v Speaker 1>to have you on the show. Thank you so much

0:01:15.160 --> 0:01:17.399
<v Speaker 1>for joining us. Thank you very much for having me. Stacy,

0:01:18.120 --> 0:01:21.160
<v Speaker 1>tell me a little bit more about you know, what

0:01:21.600 --> 0:01:24.039
<v Speaker 1>the part of Bloomberg that you work in does and

0:01:24.120 --> 0:01:27.560
<v Speaker 1>how you got here. Yeah. Sure, So. Bloomberg Intelligence is

0:01:27.760 --> 0:01:30.679
<v Speaker 1>the research arm of Bloomberg. So in terms of there's

0:01:30.680 --> 0:01:32.720
<v Speaker 1>just the number of analysts and strategists. If you think

0:01:32.720 --> 0:01:34.680
<v Speaker 1>of it in the context of like an investment bank

0:01:34.760 --> 0:01:37.120
<v Speaker 1>or a sell side broker, it's a pretty large operation.

0:01:37.160 --> 0:01:38.840
<v Speaker 1>It would sort of be in the top five or

0:01:38.880 --> 0:01:41.600
<v Speaker 1>six in terms of research. Yeah, so I mean with

0:01:41.720 --> 0:01:44.720
<v Speaker 1>spans across all the all the global offices. And you know,

0:01:44.760 --> 0:01:47.960
<v Speaker 1>the way I came into the Bloomberg intelligence role was

0:01:48.120 --> 0:01:51.040
<v Speaker 1>really I was that Bloomberg for seven years prior, I

0:01:51.080 --> 0:01:55.360
<v Speaker 1>was working as a senior equity market specialist based in Singapore,

0:01:55.480 --> 0:01:58.280
<v Speaker 1>and that really speaks to my background in history as

0:01:58.320 --> 0:02:01.400
<v Speaker 1>a sort of an equity sell side idequities trader. For

0:02:01.440 --> 0:02:03.720
<v Speaker 1>the past of the twenty years or so, it's been

0:02:03.720 --> 0:02:05.720
<v Speaker 1>a long week. The highlight which has been the FED.

0:02:05.920 --> 0:02:09.880
<v Speaker 1>Digital assets essentially did not escape the volatility that we

0:02:09.919 --> 0:02:14.520
<v Speaker 1>saw across financial markets, not at all. So you actually

0:02:14.520 --> 0:02:18.000
<v Speaker 1>saw bitcoin outperform traditional socks a little bit. But if

0:02:18.000 --> 0:02:21.600
<v Speaker 1>you zoom out, it's just been a brutal stretch for bitcoin,

0:02:21.800 --> 0:02:26.200
<v Speaker 1>down fifty eight percent almost here today we are obviously

0:02:26.760 --> 0:02:30.000
<v Speaker 1>not just in a kind of a normal down draft.

0:02:30.320 --> 0:02:32.640
<v Speaker 1>We are at you know, as I'm looking at prices

0:02:32.720 --> 0:02:36.880
<v Speaker 1>right now, we're sort of hovering below, well below nineteen

0:02:36.880 --> 0:02:39.680
<v Speaker 1>thousand dollars, which is of course for for one bitcoin,

0:02:39.760 --> 0:02:43.320
<v Speaker 1>which is significantly below the highs that we've reached this

0:02:43.360 --> 0:02:46.280
<v Speaker 1>time last year. One of the things that you, you know,

0:02:46.400 --> 0:02:49.560
<v Speaker 1>have kind of covered a lot for both bitcoin and

0:02:49.600 --> 0:02:51.799
<v Speaker 1>ether or what you see as some of the fundamental

0:02:51.880 --> 0:02:56.079
<v Speaker 1>drivers of that relative underperformance. Like you've talked about liquidity

0:02:56.160 --> 0:02:59.720
<v Speaker 1>risk a lot. Can you share your perspective on how

0:02:59.800 --> 0:03:04.160
<v Speaker 1>you're seeing bitcoin and ether do both relative to your

0:03:04.240 --> 0:03:07.080
<v Speaker 1>projections but also to kind of the broader markets that

0:03:07.120 --> 0:03:10.360
<v Speaker 1>you're so familiar with. Yeah, so, I mean I started

0:03:10.360 --> 0:03:13.000
<v Speaker 1>this role in January, and really from the outset, we

0:03:13.080 --> 0:03:15.600
<v Speaker 1>sort of we put out the outlook, which was that

0:03:15.639 --> 0:03:17.920
<v Speaker 1>crypto is going to underperform at least for the next

0:03:17.919 --> 0:03:20.200
<v Speaker 1>six months, because we was clear that we were entering

0:03:20.280 --> 0:03:23.600
<v Speaker 1>at that stage even though started to rise, but we're

0:03:23.680 --> 0:03:26.120
<v Speaker 1>entering at a tightening environment. And if you just look

0:03:26.120 --> 0:03:28.000
<v Speaker 1>at the FED balance sheet and overlay that onto the

0:03:28.000 --> 0:03:30.160
<v Speaker 1>bitcoin price, it's a chart that I've been using since

0:03:30.200 --> 0:03:33.160
<v Speaker 1>two thousand and sixteen, and it's very clear that the

0:03:33.320 --> 0:03:37.640
<v Speaker 1>big kind of crypto cycles follow monetary conditions. You know,

0:03:37.640 --> 0:03:40.040
<v Speaker 1>what's evolved is something, you know, vastly different to the

0:03:40.040 --> 0:03:42.360
<v Speaker 1>previous cycles, with the rate of change that we've seen

0:03:42.680 --> 0:03:46.000
<v Speaker 1>in the price of money, the interest rates, and also

0:03:46.080 --> 0:03:50.480
<v Speaker 1>the degree of tightening or in the withdrawal of liquidity

0:03:50.600 --> 0:03:54.080
<v Speaker 1>from financial markets by the FED. So this is not

0:03:54.280 --> 0:03:58.680
<v Speaker 1>like previous cycles, although it still has similar hallmarks. I

0:03:58.800 --> 0:04:00.800
<v Speaker 1>was of the view that really would bottom out in

0:04:00.840 --> 0:04:03.000
<v Speaker 1>the second half of this year, and I still think

0:04:03.040 --> 0:04:06.080
<v Speaker 1>that is entirely possible. I think what we saw in

0:04:06.240 --> 0:04:10.840
<v Speaker 1>June had all the hallmarks again of a capitulation style

0:04:11.160 --> 0:04:16.120
<v Speaker 1>bottom that we've seen in previous cycles. All the markets

0:04:16.160 --> 0:04:18.520
<v Speaker 1>that I look at and I had on my sort

0:04:18.560 --> 0:04:21.159
<v Speaker 1>of board of of things to take off for a

0:04:21.320 --> 0:04:25.200
<v Speaker 1>low encrypto. So that came to fruition in June because

0:04:25.240 --> 0:04:28.560
<v Speaker 1>of the things that I mentioned that that changed in liquidity,

0:04:28.600 --> 0:04:31.560
<v Speaker 1>the tightening of interest rates. The cycle is I think

0:04:31.560 --> 0:04:34.000
<v Speaker 1>going to be a little bit more extended, and it's

0:04:34.000 --> 0:04:36.200
<v Speaker 1>possible that we are going to take out the loads

0:04:36.240 --> 0:04:38.480
<v Speaker 1>that we saw in June. But I think a lot

0:04:38.520 --> 0:04:42.040
<v Speaker 1>of that damage in the cycle had been done because

0:04:42.080 --> 0:04:45.400
<v Speaker 1>of the force selling, the liquidations that happened on the

0:04:45.400 --> 0:04:48.400
<v Speaker 1>back of Lunar and the back of the centralized financial

0:04:48.400 --> 0:04:50.880
<v Speaker 1>players that kind of did a redux of two thousand

0:04:50.880 --> 0:04:53.520
<v Speaker 1>and eight GFC and gave crypto a bit of a

0:04:53.520 --> 0:04:55.960
<v Speaker 1>black eye. So I don't think Bitcoin is not going

0:04:56.000 --> 0:05:00.520
<v Speaker 1>to zero. Clearly, the number of people holding bitcoin continues

0:05:00.560 --> 0:05:02.680
<v Speaker 1>to rise a certain new all time high, so the

0:05:02.760 --> 0:05:06.160
<v Speaker 1>utility factor is still quite strong. And these are the

0:05:06.240 --> 0:05:08.760
<v Speaker 1>kinds of things that I look at. So all in all,

0:05:08.800 --> 0:05:10.560
<v Speaker 1>I think of rates continue to go high. If the

0:05:10.640 --> 0:05:13.800
<v Speaker 1>d x Y continues to explode higher, obviously that puts

0:05:14.360 --> 0:05:17.800
<v Speaker 1>or risk assets on notice. But what's very interesting is

0:05:17.839 --> 0:05:20.640
<v Speaker 1>that in the last couple of weeks has been the

0:05:21.160 --> 0:05:25.800
<v Speaker 1>our performance of crypto versus other risk assets such as equities,

0:05:26.520 --> 0:05:29.680
<v Speaker 1>and we've seen that actually from the June lows. You know,

0:05:29.720 --> 0:05:33.520
<v Speaker 1>Bitcoin is up slightly from the June lows, whereas the

0:05:33.600 --> 0:05:36.359
<v Speaker 1>SMP and NASTAC are sort of taking out those lows.

0:05:36.400 --> 0:05:40.599
<v Speaker 1>So I'm not saying that this is a decoupling in

0:05:40.640 --> 0:05:42.440
<v Speaker 1>a long term basis, but these are the sort of

0:05:42.440 --> 0:05:45.360
<v Speaker 1>things you look for to see if the market structure

0:05:45.480 --> 0:05:49.080
<v Speaker 1>is starting to change. We've spoken to people on this

0:05:49.120 --> 0:05:51.599
<v Speaker 1>podcast where like crypto has no fundamentals, you have a

0:05:51.600 --> 0:05:53.960
<v Speaker 1>whole presentation in which you go through what you think

0:05:54.000 --> 0:05:56.119
<v Speaker 1>the fundamentals of crypto war Can you share a couple

0:05:56.120 --> 0:05:59.000
<v Speaker 1>of those kind of underlying elements that you look at

0:05:59.120 --> 0:06:01.719
<v Speaker 1>when you're coming up with how you see what the

0:06:01.760 --> 0:06:06.960
<v Speaker 1>next six twelve easy months may hold fundamentals At the

0:06:07.040 --> 0:06:09.440
<v Speaker 1>end of the day, this is what really drives the

0:06:09.520 --> 0:06:11.760
<v Speaker 1>value of these assets, for the price of these assets,

0:06:11.760 --> 0:06:14.760
<v Speaker 1>and you know, for many people it's it's a challenge

0:06:14.839 --> 0:06:17.839
<v Speaker 1>to sort of adopt or think about these assets with

0:06:17.920 --> 0:06:22.479
<v Speaker 1>a framework, which makes sense because it's very conceptual or

0:06:22.520 --> 0:06:24.640
<v Speaker 1>it's intangible. But in the same way as you know

0:06:24.920 --> 0:06:28.680
<v Speaker 1>social networks like Facebook and Amazon you came to fall

0:06:28.720 --> 0:06:32.240
<v Speaker 1>with massive valuations, these block chains, of these crypto networks

0:06:32.760 --> 0:06:37.479
<v Speaker 1>the same. They are driven by adoption, and there are

0:06:38.000 --> 0:06:42.880
<v Speaker 1>fundamental metrics that you can use to gauge whether adoption

0:06:43.040 --> 0:06:45.880
<v Speaker 1>is taking place. So I have a dashboard that I've

0:06:45.880 --> 0:06:48.640
<v Speaker 1>created for both the Bitcoin and ethereum, and it will

0:06:48.640 --> 0:06:51.040
<v Speaker 1>be rolled out to more assets over time. But this

0:06:51.080 --> 0:06:53.400
<v Speaker 1>looks at anywhere between sort of thirty five to sort

0:06:53.400 --> 0:06:57.640
<v Speaker 1>of forty five different fundamental metrics which measure things like

0:06:57.720 --> 0:07:00.279
<v Speaker 1>adoption on both of these chains. And if you really

0:07:00.400 --> 0:07:03.400
<v Speaker 1>if I just distill it down into the you know,

0:07:03.440 --> 0:07:06.560
<v Speaker 1>the first principles, core tenets of what fundamentals are for

0:07:06.600 --> 0:07:11.800
<v Speaker 1>crypto networks. It's simply the number of addresses holding the asset,

0:07:12.000 --> 0:07:14.800
<v Speaker 1>the number of active users on the network, and the

0:07:14.960 --> 0:07:19.080
<v Speaker 1>value in US dollars or whatever currency that's actually transacting

0:07:19.080 --> 0:07:21.320
<v Speaker 1>on the network. These are the indicators or these are

0:07:21.360 --> 0:07:24.640
<v Speaker 1>the markers of utility. And if these things are going

0:07:24.720 --> 0:07:27.960
<v Speaker 1>higher and the price is going lower, then you have

0:07:28.040 --> 0:07:32.239
<v Speaker 1>a positive divergence which ultimately at some point will self correct.

0:07:33.760 --> 0:07:35.640
<v Speaker 1>Do you have a sense of what that point might be?

0:07:35.680 --> 0:07:38.000
<v Speaker 1>I mean, you did mention and we've been writing on

0:07:38.040 --> 0:07:40.720
<v Speaker 1>the newsroom side about the kind of the breakdown of

0:07:40.720 --> 0:07:44.080
<v Speaker 1>the correlation story, right like the bitcoin and ether and

0:07:44.080 --> 0:07:47.920
<v Speaker 1>so's another tookens I've started to diverge from the dismal

0:07:48.160 --> 0:07:51.320
<v Speaker 1>overall performance of the stock market. Where do you see

0:07:51.320 --> 0:07:54.480
<v Speaker 1>that kind of trajectory in this as you've mentioned, challenging

0:07:54.520 --> 0:07:58.400
<v Speaker 1>liquidity environment that we still that we're still in. Yeah,

0:07:58.480 --> 0:08:02.520
<v Speaker 1>so I'm not in the case amp that cryptos decoupling,

0:08:02.760 --> 0:08:05.120
<v Speaker 1>because I mean, there's so much volatility in the market

0:08:05.160 --> 0:08:07.480
<v Speaker 1>at the moment that it's very hard to read into

0:08:07.600 --> 0:08:10.360
<v Speaker 1>a one week one month trend. But if we see

0:08:10.400 --> 0:08:13.480
<v Speaker 1>this continuing where we see a significant divergence, it is

0:08:13.520 --> 0:08:15.600
<v Speaker 1>telling us something and it's probably a signal that we

0:08:15.640 --> 0:08:18.840
<v Speaker 1>should pay attention to. But I think if things get worse,

0:08:18.920 --> 0:08:22.360
<v Speaker 1>then I can't see how crypto will not break down

0:08:22.400 --> 0:08:25.720
<v Speaker 1>alongside equities, which has just been it's been resilient in

0:08:25.720 --> 0:08:28.560
<v Speaker 1>the last couple of weeks and not doing so well.

0:08:28.560 --> 0:08:31.600
<v Speaker 1>It's testing those those today. So it's interesting in that

0:08:31.720 --> 0:08:33.760
<v Speaker 1>when you look at the Bitcoin network, you know, the

0:08:33.840 --> 0:08:37.440
<v Speaker 1>number of long term holders on the network is now

0:08:37.559 --> 0:08:39.800
<v Speaker 1>at an all time high. You know, you're not seeing

0:08:39.800 --> 0:08:42.439
<v Speaker 1>the long term holders of the Hoddlers get shaken out

0:08:42.480 --> 0:08:45.679
<v Speaker 1>by this. So at some point that's going to matter.

0:08:46.040 --> 0:08:48.560
<v Speaker 1>It's a question of how long it can sort of diverge.

0:08:48.760 --> 0:08:51.880
<v Speaker 1>But yeah, I think it's it's something to keep an

0:08:51.920 --> 0:08:55.400
<v Speaker 1>eye on. I want to just push on that point

0:08:55.400 --> 0:08:57.120
<v Speaker 1>a little bit more because what you said there is

0:08:57.480 --> 0:08:59.760
<v Speaker 1>a very interesting way to think about the market. You know,

0:09:00.280 --> 0:09:02.760
<v Speaker 1>the o G Hoddlers, as it were, These are folks

0:09:02.760 --> 0:09:07.520
<v Speaker 1>who didn't get in, and these are folks have been

0:09:07.520 --> 0:09:10.040
<v Speaker 1>in for a kind of several years, brought in at

0:09:10.160 --> 0:09:14.120
<v Speaker 1>much lower prices than where we are even right now,

0:09:15.400 --> 0:09:17.679
<v Speaker 1>So kind of by definition, you can't be a long

0:09:17.800 --> 0:09:20.079
<v Speaker 1>term holder if you've recently bought into the markets. That

0:09:20.120 --> 0:09:22.760
<v Speaker 1>would suggest from what you're saying that what we're seeing

0:09:22.840 --> 0:09:26.679
<v Speaker 1>is the market the newer entrance get either forcibly liquidated

0:09:26.760 --> 0:09:30.160
<v Speaker 1>or just like opting out entirely, so that the balance

0:09:30.240 --> 0:09:32.319
<v Speaker 1>is returning to the folks who have been players for

0:09:32.360 --> 0:09:35.440
<v Speaker 1>a longer time. Am I understanding that analogy correctly? Well,

0:09:35.480 --> 0:09:37.800
<v Speaker 1>the definition for a long term holder, based on the

0:09:37.880 --> 0:09:40.440
<v Speaker 1>data that I'm using, which is a mixture of different

0:09:40.679 --> 0:09:44.360
<v Speaker 1>data providers, is actually six months or longer. So it's

0:09:44.400 --> 0:09:46.200
<v Speaker 1>just a kind of a moving goalpost. It doesn't just

0:09:46.240 --> 0:09:49.320
<v Speaker 1>include those earlier adopters, but it includes you know, six

0:09:49.320 --> 0:09:52.040
<v Speaker 1>months or or later. And the people within that cohort

0:09:52.120 --> 0:09:54.400
<v Speaker 1>they're changing all the time. But if you just look

0:09:54.440 --> 0:09:58.160
<v Speaker 1>at that as a group of addresses, then that's saying

0:09:58.160 --> 0:10:01.080
<v Speaker 1>that that is actually increasing in the The The entities that

0:10:01.120 --> 0:10:03.640
<v Speaker 1>have been more active in the last couple of months

0:10:03.640 --> 0:10:06.600
<v Speaker 1>have basically left the network right there. There's still a

0:10:06.600 --> 0:10:08.960
<v Speaker 1>lot of short term trading on the margins, and that

0:10:09.120 --> 0:10:12.840
<v Speaker 1>is really what's influencing the price. It's really that trading

0:10:12.840 --> 0:10:15.400
<v Speaker 1>activity what's happening in the derivatives market. The drivers market

0:10:15.480 --> 0:10:18.520
<v Speaker 1>is several times larger than the spot and that tends

0:10:18.520 --> 0:10:22.000
<v Speaker 1>to be faster money. Short term traders sort of involved

0:10:22.040 --> 0:10:24.720
<v Speaker 1>in a lot of the perpetuals and the and the

0:10:24.760 --> 0:10:28.280
<v Speaker 1>futures trading, futures and optimist trading, so it's not quite

0:10:28.360 --> 0:10:31.360
<v Speaker 1>the cohort that you're thinking of. But typically what you

0:10:31.480 --> 0:10:34.240
<v Speaker 1>see in you know, the bear markets is the short

0:10:34.360 --> 0:10:41.160
<v Speaker 1>term holders they exit, you know, they're buying, they're already

0:10:41.200 --> 0:10:42.760
<v Speaker 1>underwater within a couple of days and a couple of

0:10:42.760 --> 0:10:45.440
<v Speaker 1>weeks or just a couple of months, and they exit system.

0:10:45.520 --> 0:10:48.880
<v Speaker 1>And then the people who are actually you know, have

0:10:48.960 --> 0:10:52.200
<v Speaker 1>been accumulating over a long period of time either hold

0:10:52.360 --> 0:10:54.760
<v Speaker 1>or continue to accumulate. At least that's what you definitely

0:10:54.760 --> 0:10:59.160
<v Speaker 1>want to see as a bottoming indicator for something like bitcoin.

0:10:59.480 --> 0:11:03.640
<v Speaker 1>If you start to see that change dramatically, then you

0:11:03.679 --> 0:11:05.320
<v Speaker 1>know there's something to be a little bit more weary of.

0:11:05.440 --> 0:11:10.280
<v Speaker 1>But ultimately what will drive bitcoin higher will be more

0:11:10.360 --> 0:11:15.040
<v Speaker 1>short term buyers coming in owning bitcoin and then obviously

0:11:15.040 --> 0:11:19.720
<v Speaker 1>converting into long term holders over time. Up next, you'll

0:11:19.720 --> 0:11:23.599
<v Speaker 1>hear more from Jamie Kots of Bloomberg intelligence on bitcoin's

0:11:23.600 --> 0:11:44.840
<v Speaker 1>financial health. We'll be right back. We've talked a lot

0:11:44.880 --> 0:11:48.520
<v Speaker 1>about Bitcoin, but you also write extensively and expensively about Ether.

0:11:48.840 --> 0:11:51.240
<v Speaker 1>So and obviously, you know, like one of the biggest

0:11:51.240 --> 0:11:55.680
<v Speaker 1>stories in crypto for a while had been the merge.

0:11:55.720 --> 0:11:57.560
<v Speaker 1>Is the merger going to happen? Okay, the emergen is happening.

0:11:57.559 --> 0:11:59.880
<v Speaker 1>What's going to happen after the merge? We're now kind

0:11:59.880 --> 0:12:01.960
<v Speaker 1>of couple of weeks? Is it a couple of weeks?

0:12:01.960 --> 0:12:05.240
<v Speaker 1>What is time? We're past the merge? And you had

0:12:05.280 --> 0:12:09.320
<v Speaker 1>a note in or around September twenty two in sort

0:12:09.320 --> 0:12:11.880
<v Speaker 1>of in which you talked about like the lack of

0:12:11.920 --> 0:12:16.280
<v Speaker 1>a bid for Ether and what your kind of reflections

0:12:16.280 --> 0:12:18.040
<v Speaker 1>on that ar Can you just share a little bit

0:12:18.080 --> 0:12:20.960
<v Speaker 1>what the premise of that note was. Yes, so it

0:12:21.080 --> 0:12:24.760
<v Speaker 1>goes back to fundamentals again, things like active users and

0:12:25.040 --> 0:12:27.800
<v Speaker 1>the sort of value transacted on these change. These are

0:12:27.840 --> 0:12:32.080
<v Speaker 1>markets of adoption. And whilst I have a very positive

0:12:32.120 --> 0:12:35.840
<v Speaker 1>outlook on Ethereum versus other l ones within the space,

0:12:35.920 --> 0:12:40.200
<v Speaker 1>because of that supply reduction, because of that massive drop

0:12:40.200 --> 0:12:43.400
<v Speaker 1>in inflation, you know, which removes you know, Billy, is

0:12:43.400 --> 0:12:47.640
<v Speaker 1>the dollars in selling pressure every year from the network. Ultimately,

0:12:47.800 --> 0:12:50.280
<v Speaker 1>in order for a recovery in the in the prices

0:12:50.280 --> 0:12:53.720
<v Speaker 1>of these assets, we need to see adoption. We need

0:12:53.760 --> 0:12:57.319
<v Speaker 1>to see an increase in some of these fundamental metrics,

0:12:57.320 --> 0:12:59.520
<v Speaker 1>at least the ones that I'm that I'm tracking. And

0:12:59.679 --> 0:13:04.000
<v Speaker 1>what was highlighting too to my readers back in September

0:13:04.120 --> 0:13:07.000
<v Speaker 1>is that whilst yes, it's it's great to be positive

0:13:07.040 --> 0:13:09.760
<v Speaker 1>about the outlook, and I mean there's structurally some very

0:13:09.800 --> 0:13:12.040
<v Speaker 1>positive things that's going to come out of it, ultimately

0:13:12.679 --> 0:13:15.400
<v Speaker 1>it's all for not if there is an adoption on

0:13:15.480 --> 0:13:18.240
<v Speaker 1>chain and that's been you know, something that's been lacking,

0:13:18.720 --> 0:13:22.760
<v Speaker 1>you know, across the ecosystem for past six to twelve months.

0:13:24.080 --> 0:13:26.760
<v Speaker 1>The Ether and the ethereum bulls, you know, they will

0:13:26.840 --> 0:13:29.079
<v Speaker 1>they will say no, no, the flippening is upon us.

0:13:29.160 --> 0:13:31.559
<v Speaker 1>Ether is going to replace Bitcoin as as the number

0:13:31.600 --> 0:13:34.640
<v Speaker 1>one layer one. Just as a kind of a broad

0:13:34.720 --> 0:13:38.960
<v Speaker 1>question for you, is there anything that you're observing post

0:13:39.120 --> 0:13:41.240
<v Speaker 1>merge and in the as you say, it's still volatile,

0:13:41.240 --> 0:13:44.240
<v Speaker 1>has only been a couple of weeks that would suggest,

0:13:44.960 --> 0:13:48.480
<v Speaker 1>you know, this is having an effect on bitcoin, bitcoin prices,

0:13:48.480 --> 0:13:51.440
<v Speaker 1>bitcoin sentiment at all, or are these two markets kind

0:13:51.480 --> 0:13:55.520
<v Speaker 1>of continuing to operate relatively different trajectories based on their

0:13:55.559 --> 0:14:02.080
<v Speaker 1>own underlying fundamentals. There's almost diametically opposing forces play in

0:14:02.120 --> 0:14:04.400
<v Speaker 1>both of these assets at the same time, on the

0:14:04.440 --> 0:14:07.080
<v Speaker 1>positive and the negative side. So I mean on the

0:14:07.120 --> 0:14:10.640
<v Speaker 1>positive side. Some one thing I'd point out for the

0:14:10.679 --> 0:14:14.720
<v Speaker 1>Bitcoin balls is that what is surfacing is a lot

0:14:14.800 --> 0:14:20.040
<v Speaker 1>better data and more visibility around how bitcoin is actually

0:14:20.320 --> 0:14:25.440
<v Speaker 1>using renewable energy sources and has the potential for greening

0:14:25.520 --> 0:14:28.800
<v Speaker 1>the you know, the grid. And that is a slight

0:14:28.880 --> 0:14:31.680
<v Speaker 1>change in narrative that you know, we've heard and seen

0:14:31.840 --> 0:14:35.440
<v Speaker 1>for the entirety of bitcoins existence. On the foot, it

0:14:35.520 --> 0:14:38.680
<v Speaker 1>was like electricity uses, fine, don't even worry about greening

0:14:38.680 --> 0:14:42.640
<v Speaker 1>the grid. Just a change of perspective as it were. Yeah,

0:14:42.680 --> 0:14:45.320
<v Speaker 1>but I mean through the innovation of participants on the

0:14:45.320 --> 0:14:49.160
<v Speaker 1>network and just the bare basic economics of bitcoin, which

0:14:49.200 --> 0:14:52.520
<v Speaker 1>is a you know, which is a technology in search

0:14:52.600 --> 0:14:56.880
<v Speaker 1>of the cheapest forms of energy, it is actually rapidly

0:14:56.920 --> 0:15:01.400
<v Speaker 1>approaching or it's already over renewable, at least from the

0:15:01.440 --> 0:15:05.280
<v Speaker 1>minors surveyed in the Bitcoin Mining Council documents, which represents

0:15:05.400 --> 0:15:09.360
<v Speaker 1>I think around sixties seventy of all miners I mean,

0:15:09.360 --> 0:15:11.720
<v Speaker 1>the bitcoin was a country would be the greenest country

0:15:11.720 --> 0:15:13.880
<v Speaker 1>in the world. I mean, that's just the reality. But

0:15:14.000 --> 0:15:19.040
<v Speaker 1>through that innovation and seeking of the lowest energy cost,

0:15:19.320 --> 0:15:23.320
<v Speaker 1>what it could potentially do for marginal renewable energy projects

0:15:24.280 --> 0:15:29.520
<v Speaker 1>as well as carbon offsetting is you know, a surprising

0:15:29.800 --> 0:15:32.800
<v Speaker 1>externality that no one really anticipated early on, but is

0:15:33.080 --> 0:15:36.800
<v Speaker 1>is certainly now becoming far more visible. Um. We've seen

0:15:36.880 --> 0:15:40.920
<v Speaker 1>you know, this being acknowledged by politicians in Texas and

0:15:40.960 --> 0:15:43.200
<v Speaker 1>in other states of the United States. To jump on

0:15:43.240 --> 0:15:45.080
<v Speaker 1>the other side of this. On the negative side, I mean,

0:15:45.120 --> 0:15:50.160
<v Speaker 1>you've still got a lot of uncertainty around regulations UM.

0:15:50.200 --> 0:15:53.320
<v Speaker 1>Although Bitcoin has been along with ethereum, depending on which

0:15:53.400 --> 0:15:57.280
<v Speaker 1>day Gainsla are speaking, singled out or petitioned as being

0:15:57.840 --> 0:16:00.160
<v Speaker 1>um not a security, which I think is you know

0:16:00.160 --> 0:16:03.600
<v Speaker 1>obviously policive for those two assets. But there's a lot

0:16:03.640 --> 0:16:05.440
<v Speaker 1>of jockey and going on, and a lot of politics

0:16:05.440 --> 0:16:07.840
<v Speaker 1>and going on. So you know, we until that gets

0:16:07.840 --> 0:16:10.080
<v Speaker 1>cleared up, hopefully in the next twelve months, that could

0:16:10.120 --> 0:16:12.960
<v Speaker 1>be a you know, a massive negative headwind. Well, Jamie,

0:16:13.000 --> 0:16:15.880
<v Speaker 1>thank you very much, and good luck with the rest

0:16:15.920 --> 0:16:17.320
<v Speaker 1>of the year. I hope we'll be able to have

0:16:17.360 --> 0:16:19.760
<v Speaker 1>you back in the show sometime soon. Thanks very much, Tasty.

0:16:21.200 --> 0:16:23.480
<v Speaker 1>You can find more of Jamie Coot's analyses on the

0:16:23.480 --> 0:16:27.120
<v Speaker 1>Bloomberg terminal or follow him on Twitter. He's at Jamie

0:16:27.240 --> 0:16:31.880
<v Speaker 1>one Coots. That's j A M I E one, as

0:16:31.880 --> 0:16:35.120
<v Speaker 1>in the number one c O U T T s

0:16:39.880 --> 0:16:42.640
<v Speaker 1>on the next episode of Bloomberg Crypto. If you don't

0:16:42.680 --> 0:16:45.360
<v Speaker 1>think that Web three is going so great, If you're

0:16:45.400 --> 0:16:48.000
<v Speaker 1>not sure that this crypto thing is everything some folks

0:16:48.000 --> 0:16:50.280
<v Speaker 1>are making it out to be, it might be because

0:16:50.320 --> 0:16:53.320
<v Speaker 1>you've seen the viral threads posted on Twitter by an

0:16:53.360 --> 0:16:57.640
<v Speaker 1>account called Yes, Web three is going great. We'll talk

0:16:57.720 --> 0:17:00.760
<v Speaker 1>to Molly White, the software engineer and crypto skeptic behind

0:17:00.800 --> 0:17:07.200
<v Speaker 1>that Twitter handle. This is Bloomberg Crypto, a dearly podcast

0:17:07.200 --> 0:17:10.320
<v Speaker 1>from Bloomberg and I Heart Radio. For more shows from

0:17:10.320 --> 0:17:13.760
<v Speaker 1>I Heart Radio, visit the I Heart Radio app, Apple Podcasts,

0:17:13.920 --> 0:17:17.840
<v Speaker 1>or wherever you get your podcasts. Send us your comments, questions,

0:17:17.880 --> 0:17:20.680
<v Speaker 1>or suggestions for the show to Crypto at Bloomberg dot

0:17:20.760 --> 0:17:27.560
<v Speaker 1>net or find us on Twitter. We're at Crypto. The

0:17:27.600 --> 0:17:31.560
<v Speaker 1>supervising producer of Bloomberg Crypto is Vicky Vergalina. Our senior

0:17:31.560 --> 0:17:35.000
<v Speaker 1>producer is Janet Babin. Our producers are Mohammed Farouk and

0:17:35.040 --> 0:17:38.760
<v Speaker 1>Sharon Barriro. Our associate producers are Ty Butler and Moses

0:17:38.800 --> 0:17:42.919
<v Speaker 1>on Them. Desta wonder At is our engineer. Original music

0:17:43.040 --> 0:17:47.800
<v Speaker 1>by Leo Sidrn. I'm Stacy, Marie Ishmael. Have a great weekend.

0:17:53.680 --> 0:17:55.720
<v Speaker 1>Before we wrap this episode, I want to mention some

0:17:55.840 --> 0:17:58.560
<v Speaker 1>exciting news from friends of the show, Katie Greifeld and

0:17:58.640 --> 0:18:02.080
<v Speaker 1>Tim Stanovic. They've launched a brand new video series called

0:18:02.119 --> 0:18:05.119
<v Speaker 1>Crypto I r L. For more information about how to

0:18:05.119 --> 0:18:07.679
<v Speaker 1>watch Crypto I r L, the new series from Bloomberg Quicktake,

0:18:07.960 --> 0:18:11.560
<v Speaker 1>go to Bloomberg dot com slash q T. The first

0:18:11.600 --> 0:18:14.080
<v Speaker 1>episode just dropped to day and we'll feature it as

0:18:14.080 --> 0:18:18.160
<v Speaker 1>a bonus podcast episode in our stream tomorrow. That's right,

0:18:18.280 --> 0:18:21.200
<v Speaker 1>You're getting a special Saturday episode to celebrate the launch

0:18:21.240 --> 0:18:24.320
<v Speaker 1>of Crypto I r L. Congratulations to Casey and to

0:18:24.440 --> 0:18:30.120
<v Speaker 1>Tim