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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: The past few years, crypto has been on a wild ride.

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Speaker 2: Back in twenty twenty one, Bitcoin was on fire. It

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Speaker 2: hit an all time high of almost sixty nine thousand dollars.

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Speaker 2: The market was hot. People were making fortunes almost overnight,

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Speaker 2: raking in millions of dollars from their crypto investments. Celebrities

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Speaker 2: like Steph Curry, Larry David, and Tom Brady were all

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Speaker 2: over TV making funny cameos and ads. Listen to how

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Speaker 2: breezily they plug FTX as a safe and easy way

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Speaker 2: to invest in crypto.

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Speaker 1: This is Steph Curry, the world's leading expert on cryptocurrency.

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Speaker 1: I'm not and I don't need to be with FTX.

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Speaker 1: Everything I need to buy, sell, and trade crypto safely,

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Speaker 1: it's FTX. It's a safe and easy way to get

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Speaker 1: into crypto.

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Speaker 2: Yeah, I don't think so. Not a trade trade. I'm

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Speaker 2: a trading crypto.

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Speaker 1: Ftxs safest and easiest way to buy and sell crypto.

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Speaker 1: It's the best way to get in the game.

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Speaker 2: Crypto got so big, other markets started experiencing a kind

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Speaker 2: of crypto glow.

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Speaker 1: There's like some fun spillover effects into other parts of

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Speaker 1: the market that have nothing to do with bitcoin.

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Speaker 2: That's Stacy Marie Ishmael. She's a crypto expert and an

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Speaker 2: executive editor on Bloomberg's Markets team.

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Speaker 1: When crypto prices are really rallying, the secondary market for

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Speaker 1: watches like super takes off, so many people are like, ooh,

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Speaker 1: a protec Philip, that sounds nice, or you know, you

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Speaker 1: see this in real estates in places like Miami and Singapore.

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Speaker 1: Seemed to be correlated to how the bitcoin price was doing,

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Speaker 1: because again there was this wealth effect for people who

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Speaker 1: had substantial holdings of this token.

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Speaker 2: And then the market came crashing down. The price of

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Speaker 2: bitcoin went from almost sixty nine thousand dollars in November

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Speaker 2: of twenty twenty one to around sixteen thousand dollars one

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Speaker 2: year later. People said crypto was dead and then signs

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Speaker 2: of life.

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Speaker 1: I mean, we're pretty much back to exactly where we

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Speaker 1: were in November twenty twenty one.

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Speaker 2: Bitcoin is back. In the past few weeks, it's been

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Speaker 2: hitting all time highs and many say this is just

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Speaker 2: the beginning. Today on the show, is crypto really on

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Speaker 2: a rocket to the moon this time? Or are we

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Speaker 2: on the brink of another Bitcoin bubble. I'm Sarah Holder,

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Speaker 2: and this is the big take from Bloomberg News. Stacy Marie.

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Speaker 2: You've been tracking cryptocurrency for years, from when it was

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Speaker 2: on the fringes of financial markets to when it started

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Speaker 2: dominating Super Bowl ads. Was there a particular moment when

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Speaker 2: you realize crypto had gone mainstream?

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Speaker 1: Crypto goes mainstream every for years. You know, this is

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Speaker 1: not a linear progression necessarily. This is more like a

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Speaker 1: series of peaks and troughs. And you know, in the

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Speaker 1: most recent period, I'd say it was when a bunch

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Speaker 1: of celebrities would go on morning talk shows and talk

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Speaker 1: about their bored ape non fungible tokens like that was

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Speaker 1: that was a strange time, you know. And Justin Bieber

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Speaker 1: was like, have you seen my monkey?

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Speaker 2: Like, okay, right, so Paris Hilton NFT era. Yeah, this

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Speaker 2: was another brief but iconic feature of the last crypto boom.

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Speaker 2: Justin Bieber and Paris Hilton were among many celebrities going

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Speaker 2: online and on talk shows to talk about how they

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Speaker 2: use crypto to buy digital art. Listen to how proudly

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Speaker 2: and casually Hilton talks about buying an NFT. This picture

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Speaker 2: of a Monkey's ape.

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Speaker 1: It's really cool. Like the shad that was when a

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Speaker 1: lot of people were like, what is this? You know,

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Speaker 1: what are we seeing here? But it was certainly not

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Speaker 1: the first time that something like that had happened. I

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Speaker 1: think this was just the most mediagenic moment.

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Speaker 2: What was it like for you as a crypto reporter

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Speaker 2: during that moment where people cornering you at parties trying

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Speaker 2: to get advice?

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Speaker 1: Yeah, there were there was sort of two reactions whereas

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Speaker 1: like what do you do? I cover crypto and they

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Speaker 1: were like, oh my god or oh my god. Those

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Speaker 1: were the only two options. And you know. September eleventh,

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Speaker 1: twenty twenty one, was the day that El Salvador made

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Speaker 1: bitcoin legal tender alongside the dollar, and just a couple

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Speaker 1: of months later was when bitcoin reached its first all

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Speaker 1: time high of close to sixty nine thousand.

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Speaker 2: Dollars and then the fall.

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Speaker 1: So November twenty twenty one all time high November twenty

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Speaker 1: twenty two, Sam Bankment freed and FTX file for bankruptcy.

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Speaker 1: You can News of the Last fifteen minutes or so

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Speaker 1: FTX finding for Chapter eleven bankruptcy.

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Speaker 2: The company's controversial chief executive, Sam bankment, freed, resigning a

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Speaker 2: CEO and will remain.

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Speaker 1: And so it was a very it was a real

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Speaker 1: shock to the cryptosystem to have this person who again

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Speaker 1: was perceived by quite a lot of folks as you know,

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Speaker 1: the next phase of bringing crypto mainstream and was regularly

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Speaker 1: spotted having lunch with legislators and was flying around the

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Speaker 1: country being like, this is the future. And then you know,

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Speaker 1: they were like, oh, by the way, we're filing for bankruptcy.

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Speaker 1: That was not an ideal set of circumstances for an

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Speaker 1: acid class that was really trying to build its credibility.

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Speaker 1: Things got even worse a few months later when the

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Speaker 1: US government was like, and also, we're accusing you of

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Speaker 1: multiple very serious crimes. So, you know, that was kind

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Speaker 1: of an institutional shock to the system for a lot

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Speaker 1: of folks who had been persuaded that this acid class

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Speaker 1: had really matured and had reached a stage of being trustworthy,

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Speaker 1: to have that image really crumble before their eyes.

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Speaker 2: Right, that's a huge shift from again Paris Hiltan hawking

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Speaker 2: her NFT to Sam BigMan free declaring bankruptcy and getting

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Speaker 2: pulled into a courtroom in front of a jury of

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Speaker 2: his peers after the break, Crypto is back, but is

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Speaker 2: history going to repeat itself? We're back, and so is crypto.

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Speaker 2: When we left off, SBF was on trial and crypto

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Speaker 2: was imploding. The price of bitcoin took a dive from

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Speaker 2: almost sixty nine thousand dollars down to sixteen thousand dollars.

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Speaker 2: People had lost their savings, investors were running for the hills,

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Speaker 2: and all of the celebrity endorsers had gone quiet. Some

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Speaker 2: of them were even getting sued. So how did crypto

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Speaker 2: come back from that? How did it recover?

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Speaker 1: It started to recover when one of the if not

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Speaker 1: the largest asset manager in the entire world, a company,

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Speaker 1: a firm called Blackrock, did something relatively innocuous, which would

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Speaker 1: send an email to the SEC being like, we would

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Speaker 1: like to get your approval to have something called an

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Speaker 1: exchange traded fund that would be backed to buy bitcoin.

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Speaker 1: And if you are not a finance reporter, that is

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Speaker 1: like not an exciting set of woods. But if you

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Speaker 1: are a finance reporter or somebody who was paying close

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Speaker 1: attention to the kinds of things that drive mainstream adoption

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Speaker 1: of assa classes, you're like, whoa to That was your

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Speaker 1: reaction as a as a finance editor one hundred percent.

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Speaker 1: I was like, guys, like, what are we doing like

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Speaker 1: file stories? You know, we had had a sense for

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Speaker 1: a long time that this particular type of fund would

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Speaker 1: be the next big thing for bitcoin's perception, as this

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Speaker 1: is the kind of asset that people can have some

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Speaker 1: faith and credibility to invest in. There had been other

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Speaker 1: types of similar funds launched before, but this particular one

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Speaker 1: was really seen as the test. And the reason it

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Speaker 1: was seen as the test is because it would require

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Speaker 1: the most important US financial regulator of the Securities and

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Speaker 1: Exchange Commission, to effectively say, yes, you can move forward

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Speaker 1: and do this particular thing. And that's exactly what the

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Speaker 1: SEC did in January twenty twenty four. And so between

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Speaker 1: Blackrock making that first step in that direction and kind

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Speaker 1: of giving at the veneer of we are a very large,

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Speaker 1: very reputable, extremely well regulated financial services company, we think

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Speaker 1: now is the time for this, and the SEC, through

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Speaker 1: a complex series of events, eventually getting to the point

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Speaker 1: of saying okay, fine, you can all go forward with

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Speaker 1: this thing. That's when you know, the bitcoin price really

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Speaker 1: started to aggressively recover back to where it was in

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Speaker 1: the highs of November twenty twenty one.

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Speaker 2: It's I'm still kind of trying to wrap my head

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Speaker 2: around how crypto has come back so completely and why

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Speaker 2: financial institutions are lining up behind it now, because it

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Speaker 2: wasn't just that crypto's price fell during the collapse, right,

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Speaker 2: It seemed like there was kind of a huge societal

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Speaker 2: rupture with crypto, Like it was all smoke and mirrors

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Speaker 2: and there was this trial going on, and how did

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Speaker 2: the currency come back from a blow like that and

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Speaker 2: win the trust of the financial institutions.

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Speaker 1: I think a few things are happening at the same time.

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Speaker 1: One is financial institutions are very good at deciding this

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Speaker 1: is how we're going to make money, which is a

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Speaker 1: different thing from saying we think this is a good idea.

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Speaker 1: And that nuance is important because you know, I covered

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Speaker 1: the financial crisis, and at the time before it was

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Speaker 1: a crisis, financial institutions were saying subprime mortgages wrapped into

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Speaker 1: other things and then resold it's a great way to

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Speaker 1: make money. This is working super well for us, until

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Speaker 1: it didn't work super well for them, and the SEC

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Speaker 1: when it was saying okay, y'all can go ahead and

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Speaker 1: offer this particular kind of product took multiple sentences of

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Speaker 1: By the way, we're not actually approving of bitcoin. We

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Speaker 1: just want to be real clear. This does not imply

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Speaker 1: endorsement of this underlying thing we think this product. Okay, fine,

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Speaker 1: the courts are telling us that we have to do

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Speaker 1: your own research quote unquote. And so for folks who

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Speaker 1: are trying to say, well, if Blackrock is doing it

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Speaker 1: or Fidelity is doing it, that must mean that something

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Speaker 1: fundamental has changed about the market. No, the thing that

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Speaker 1: has changed about the market is that these financial services

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Speaker 1: firms have like run the calculations the risk reward and

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Speaker 1: have said, with these appropriate caveats, we are finding that

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Speaker 1: there's enough demand for this particular thing to make it

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Speaker 1: worth our while. Does that mean suddenly that a token

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Speaker 1: issued by somebody who you have no idea who they

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Speaker 1: are or where they're based, and it's called something like

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Speaker 1: dog with hat is you know, the type of investment

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Speaker 1: that you should like bet your savings on. Those are

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Speaker 1: not equivalents. But it's definitely in the interests of certain

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Speaker 1: folks in the market to argue that those are equivalents.

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Speaker 1: And if you listen really carefully, which is my job,

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Speaker 1: if you listen really carefully to what a lot of

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Speaker 1: folks in traditional finance are saying. They're much more measured, right,

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Speaker 1: They're not kind of arguing that this is a fundamentally

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Speaker 1: like transformative moment in crypto. And then you have CEOs

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Speaker 1: like Jamie Diamond of JP Morgan, whose favorite thing to

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Speaker 1: do is just like trash bitcoins, like this is the

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Speaker 1: dumbest idea of all time.

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Speaker 2: I could care less with bitcoin trades for how it trades,

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Speaker 2: why it trades, who trades it. If you're stupid enough

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Speaker 2: to buy, you'll pay the price for it one day.

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Speaker 1: And yet you know JP Morgan does use blockchain technology.

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Speaker 1: JP Morgan's clients are very interested in how and whether

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Speaker 1: they can make money on these things. And so, you know,

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Speaker 1: the job that we always have, as like financial reports

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Speaker 1: and financial editors is try to help people understand this

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Speaker 1: is what's happening in the market, this is what the

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Speaker 1: effects of that are on prices. But the fact that

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Speaker 1: prices are going up does not necessarily mean that this

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Speaker 1: is like objectively good or bad. It just means the

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Speaker 1: prices are going.

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Speaker 2: Up, right, So can you give us some context on

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Speaker 2: the highs we're experiencing today, how do they compare to

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Speaker 2: the previous set of all time highs.

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Speaker 1: I mean, we're pretty much back to exactly where we

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Speaker 1: were in November twenty twenty one, right, you know, So

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Speaker 1: it's we have not yet reached a real breakout point

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Speaker 1: above that, which is probably something closer to seventy five

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Speaker 1: thousand for bitcoin or eighty thousand for bitcoin, because you know,

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Speaker 1: between sixty five and seventy is like where we were

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Speaker 1: the last time, and then the market just went all

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Speaker 1: the way down. So if we start to see that

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Speaker 1: we are holding above seventy five or eighty, that does

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Speaker 1: represent like a different stage from where we were the

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Speaker 1: last time. Everyone was having a really good day. There

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Speaker 1: are some projections and there have been for a long time,

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Speaker 1: that bitcoin will hit one hundred thousand, which would you know,

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Speaker 1: is not outside of the realm of possibility if you

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Speaker 1: look at some of the run up over the past

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Speaker 1: couple of weeks. But what has often happened is folks

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Speaker 1: hit like a kind of a ceiling and then they

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Speaker 1: get a little bit freaked out. They're like, that seems

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Speaker 1: really high. And what happens in those environments and you

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Speaker 1: see this with all sorts of things you see this

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Speaker 1: with stocks is behavior called profit taking, which means, let

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Speaker 1: me convert my paper gains into real gains, and so

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Speaker 1: I am now gonna sell and buy a watch and

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Speaker 1: buy a watch or you know, of a yacht or whatever.

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Speaker 1: And that's you know, that's really the kind of what

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Speaker 1: we've seen in the crypto market over the past few

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Speaker 1: Like I'd say the third into fourth week of March

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Speaker 1: is really people consolidating positions and being like, I feel

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Speaker 1: good about seventy. I'm gonna get out while I'm ahead.

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Speaker 2: Right, So there's a level at which people are saying

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Speaker 2: this is maybe too good to last. Yeah, And that's

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Speaker 2: why we're learning those lessons, and they're gonna sell so

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Speaker 2: they can take advantage of the opportunity and the moment.

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Speaker 1: Until potentially we get to eighty and then that becomes

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Speaker 1: the new level.

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Speaker 2: Right.

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Speaker 1: So it's sometimes in finance you'll hear people talk about

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Speaker 1: psychologically important thresholds, which is a fancy way of saying

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Speaker 1: big round numbers. And the current big round number is seventy.

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Speaker 1: The next big round number is eighty.

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Speaker 2: So if we don't see these new thresholds broken, and

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Speaker 2: if crypto prices do stay pretty similar to where they're

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Speaker 2: at right now. What's different about this moment than the

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Speaker 2: last peak? Are we on the brink of another bubble?

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Speaker 1: That's what a lot of very intelligent people who manage

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Speaker 1: lots of money and trying to figure out And you

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Speaker 1: know that the one the big macroeconomic difference is we're

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Speaker 1: in a very different interest rates environment. The geopolitical difference

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Speaker 1: is multiple wars on multiple fronts, the US specific differences.

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Speaker 1: We're about to enter another election cycle, and you know,

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Speaker 1: all of those things independently tend to have effects on

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Speaker 1: financial markets. And you know there are hedge funds that

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Speaker 1: specialize in trying to figure out how the combination of

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Speaker 1: those big exogenous factors are going to weigh on everything

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Speaker 1: from gold prices to where Nvidia is going to trade,

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Speaker 1: to what's going to happen with bitcoin. Within crypto itself,

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Speaker 1: the things that people are looking for include are other

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Speaker 1: regulators and other governments going to continue to make it

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Speaker 1: challenging for crypto companies and crypto exchanges to operate, which

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Speaker 1: would again limit a certain amount of activity in the market.

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Speaker 1: Another challenge is whether everybody's going to continue pouring money

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Speaker 1: into AI right One of the things that definitely happened

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Speaker 1: in the previous cycle is a lot of venture capital

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Speaker 1: firms were like, Oh, yeah, you have an idea about

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Speaker 1: a token, here's one hundred million dollars. It's fine. And

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Speaker 1: right now they're like, oh, you have an idea about AI,

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Speaker 1: here's five hundred million dollars. And so some of the

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Speaker 1: money that was pouring into to crypto has been redirected

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Speaker 1: in the direction of artificial intelligence, which is again providing

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Speaker 1: a little bit of a ceiling to some of the enthusiasm.

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Speaker 1: But if we start to see vcs kind of really

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Speaker 1: come back into crypto, that is another dynamic that we're

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Speaker 1: paying attention to.

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Speaker 2: So, Sacey Marie, do you think we'll start seeing ads

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Speaker 2: for cryptocurrency on TV again?

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Speaker 1: Oh, it's totally yeah. I don't know. I don't know

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Speaker 1: if Tom Brady himself he is going to be the one,

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Speaker 1: you know, like Larry David has has expressed some remorse

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Speaker 1: about appairing in ads for crypto. But if you're in

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Speaker 1: the US and you're in DC, or you're in New

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Speaker 1: York and you're flying into certain airports or certain train stations,

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Speaker 1: or you go to Hong Kong, or you go to Singapore.

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Speaker 1: The ads are totally back, and that's absolutely one of

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Speaker 1: the things we pay attention because what that tells us

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Speaker 1: is crypto companies have money because prices are going up,

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Speaker 1: they're willing to spend that money on advertising marketing, they're

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Speaker 1: paying to sponsor conferences. Again, I haven't seen anyone go

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Speaker 1: in the Morning show recently to talk about NFTs, but

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Speaker 1: you know, not outside of the possibility that that will happen.

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Speaker 2: Well, Stacey Murray, thank you so much.

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Speaker 1: Pleasure to be here.

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Speaker 2: This is the Big Take from Bloomberg News. I'm Sarah Holder.

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Speaker 2: This episode was produced by David Fox. It was edited

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Speaker 2: by Stacy Vannick Smith and Dave Litka. It was mixed

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Speaker 2: by Alex Suguiera. It was fact checked by Stacy Rene.

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Speaker 2: Our senior producers are Naomi Shavin and Elizabeth Ponso. Nicole

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Speaker 2: beamsterbor is our executive producer. Sage Bauman is our head

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