Speaker 1: This is Bloomberg Crypto, a daily Bloomberg I Heard podcast,
Speaker 1: and I'm a Donna Hark, a crypto reporter for Bloomberg News.
Speaker 1: In Today for Stacy Marie Ishmael, It's Monday, October. Hey,
Speaker 1: I'm just the Wonderrett from the Bloomberg Crypto podcast team.
Speaker 1: For the last five years, September has been a bad
Speaker 1: month for crypto prices, but October, the month of ghoules,
Speaker 1: gablins and pumpkin spite lattes, has in the past been
Speaker 1: a more hopeful time for bitcoin enthusiasts. Crypto advocates have
Speaker 1: been optimistic that this year will be the same. In
Speaker 1: this episode, guest host and Bloomberg reporter vil Donna Harrick,
Speaker 1: Bitcoin actually has been less volatile by some measures than
Speaker 1: stocks have been. Just the moves in the stock market
Speaker 1: have been crazy. Keeping me up is joined by Bloomberg
Speaker 1: reporter Hannah Miller. A lot of the sell off happened
Speaker 1: earlier this year is part of why you know October
Speaker 1: could be maybe a decent month for crypto to better
Speaker 1: understand the dynamics at play during the not so spooky
Speaker 1: month of October. Oh you look good, O'm my gosh,
Speaker 1: she looks you look good. Thank you Bush. Okay, right
Speaker 1: off the bat, I'd love to start with a very
Speaker 1: bad joke, which is that October is a scary month. Right,
Speaker 1: we have Halloween, we have ghouls and goblins and whatever else,
Speaker 1: But actually it tends to be a not so scary
Speaker 1: time for bitcoin, and I'm hoping that you can out
Speaker 1: for us why that might be. Yeah. Well, historically October
Speaker 1: has been called October in crypto because we've seen in
Speaker 1: the past that bitcoin and ethereum have actually performed pretty
Speaker 1: well and have had price increases. I think investors are
Speaker 1: kind of waiting to see if that'll be the case
Speaker 1: with this October, despite us being in the middle of
Speaker 1: a cold crypto winter. I love the meme October, and
Speaker 1: I remember writing about it the last couple of years,
Speaker 1: and I'm so happy that you brought it up. But
Speaker 1: just to take a big step back, so we've had
Speaker 1: this really big down draft this year. Both August and
Speaker 1: September were very bad months for cryptocurrencies, and I'm hoping
Speaker 1: you can just lay out the foundation for us for
Speaker 1: what it is exactly that's been happening in crypto markets
Speaker 1: that's been pushing prices lower. Yeah, there's been a lot
Speaker 1: going on this past year. We saw really the market
Speaker 1: take a sharp downturn in the spring after big players
Speaker 1: lapsed within the industry. So I'm thinking, you know, disgraced
Speaker 1: crypto hedge fund Three Arrows Capital. I'm talking about Celsius
Speaker 1: and Voyager, which are both crypto lending platforms that have
Speaker 1: had to file for bankruptcy. And it's really just brought
Speaker 1: prices down enormously. Oh and not to mention the whole
Speaker 1: collapse of the terra ecosystem. You can forget it, you know,
Speaker 1: Oh yeah, I can't forget that. So really all of
Speaker 1: these things have helped tank crypto prices. And then the
Speaker 1: other big one also being the Fed and everything that's
Speaker 1: been happening with interest rates and how it's impacting. Is
Speaker 1: the Fed going to change its rate path because the
Speaker 1: markets are nervous inflation? Inflation, inflation, It's fair to say
Speaker 1: inflation dominated the discussion at the last FED meeting. The
Speaker 1: Fed has been raising rates that is spooking investors when
Speaker 1: it comes to risky assets like crypto like stocks. You know,
Speaker 1: I think we're waiting to see whether more rate raises
Speaker 1: are on the horizon. Did you mean to make a
Speaker 1: Halloween joke when you said spooky? I did. Thank you
Speaker 1: for touching that. So when you're talking to people, because
Speaker 1: basically our jobs are talking to people figuring out what's
Speaker 1: going on with markets, what's going on with the industry,
Speaker 1: what are they telling you about the potential for crypto
Speaker 1: prices to recover anytime soon. Yeah, so a lot of
Speaker 1: the investors I speak with are really you know, buckling
Speaker 1: up for the long haul. They do believe this crypto
Speaker 1: winter is going to be a bit of a long one,
Speaker 1: but they do believe that prices will eventually come up.
Speaker 1: These are investors who've poured a lot of money not
Speaker 1: only into cryptocurrencies and digital assets, but have also backed
Speaker 1: major startups in the industry. So they're really pinning their
Speaker 1: hopes on the fact that crypto prices will eventually rise
Speaker 1: once again. And you know, these are true believers. These
Speaker 1: are people who see value and importance in digital currencies
Speaker 1: and how they can change how we interact with money
Speaker 1: and you know, do transactions with each other. So those
Speaker 1: are some of the narratives that we had been hearing
Speaker 1: about crypto, where you hear the bitcoin is an inflation hedge,
Speaker 1: for instance, or maybe a place to park your money
Speaker 1: for turbulent times. I remember writing those stories a couple
Speaker 1: of years ago, and those narratives really haven't been playing
Speaker 1: out recently, right, Yeah, we I think we've seen really
Speaker 1: a decorrelation when it comes to rising inflation and demand
Speaker 1: for bitcoin. You know, the comparison of bitcoin too. You know,
Speaker 1: digital gold has been so dominant over the past few years.
Speaker 1: But really when inflation has become more rampant in the
Speaker 1: past year or so, that hasn't caused bitcoin prices to spike.
Speaker 1: And just to go back to what you were just
Speaker 1: saying about the sort of hopefulness of the proponents who
Speaker 1: are really sort of waiting and seeing what prices might
Speaker 1: do going forward, and they're hoping that things have recovered
Speaker 1: to where they were before and even above that. But
Speaker 1: I'm just wondering about you know, the last couple of years,
Speaker 1: I remember writing about these huge price targets that people
Speaker 1: had for bitcoin, different strategists on wall streets also saying
Speaker 1: it could reach a hundred thousand or two hundred fifty
Speaker 1: thousand dollars per coin, and we're not seeing as much
Speaker 1: of that right now either, right, So what has sentiment
Speaker 1: been like, Yeah, I think people have had a reality check.
Speaker 1: You know that there are still a lot of unresolved
Speaker 1: issues with crypto. I mean we can see that with
Speaker 1: what happened with Tera Celsius Voyager three A C. There's
Speaker 1: also just the looming specter of regulation. There's a lot
Speaker 1: of uncertainty that's happening here, and I think investors are
Speaker 1: getting more realistic about how this space is growing. But
Speaker 1: that also means greater regulatory scrutiny, that there are going
Speaker 1: to be actions taken to rain the space in We
Speaker 1: started out talking about October and it potentially being a
Speaker 1: much better month than the last couple of months. But
Speaker 1: if we are looking ahead or even through the remainder
Speaker 1: of the year, is there something that people you speak
Speaker 1: with are telling you about a potential catalyst for prices
Speaker 1: to actually start to stabilize and rally. Yeah. I think
Speaker 1: more institutional adoption will help things. I think like a
Speaker 1: big partnership between a major tech or financial company and
Speaker 1: a major crypto company could help things along. And you know,
Speaker 1: we are expecting clearer regulations and I think once more
Speaker 1: clarity comes out around that, that will help things stabilize.
Speaker 1: You know, people will know what they're dealing with, what
Speaker 1: companies are going to be dealing with on the horizon.
Speaker 1: Is that something that we can expect to see more
Speaker 1: of in the coming months even I think so yeah.
Speaker 1: I mean I think every day, you know, we see
Speaker 1: some sort of action by the SEC or the CFTC
Speaker 1: that gives us a pretty clear idea that they're wanting
Speaker 1: to take control of the space and you know, flush
Speaker 1: out bad actors. And I think some people within the
Speaker 1: crypto industry welcome that, you know, they see this crypto
Speaker 1: winter as a clean out that really the truly committed,
Speaker 1: truly functional platforms are going to stay in and that
Speaker 1: bad actors or you know, more fragile platforms are just
Speaker 1: going to be flushed out. Up next, more with Bloomberg
Speaker 1: reporter Hannah Miller on how bitcoin prices are faring this October.
Speaker 1: We'll be right back. So, speaking of the truly committed,
Speaker 1: we have a word for that in crypto. It's hoddlers, right,
Speaker 1: people who are holding on for dear life. But I've
Speaker 1: been reading a lot of notes recently that's basically say
Speaker 1: these long term holders or hoddlers have been sitting on
Speaker 1: their coins potentially waiting for the crypto winter to pass,
Speaker 1: I suppose, or for things to even get a little
Speaker 1: bit worse before they get better. And then at the
Speaker 1: same time, the retail investor that had been involved over
Speaker 1: the last couple of years during the pandemic has largely
Speaker 1: gone missing. And I'm wondering if you can talk about this,
Speaker 1: this trend of retail leaving the space and how much
Speaker 1: actually maybe we need the retail investor to be coming
Speaker 1: back in. Yeah. No, retailers are a bit frightened, you
Speaker 1: know what's happening here. They're you know, pulling out. We
Speaker 1: saw a really big sell off in the beginning of
Speaker 1: the year, so there's hope that things will get better
Speaker 1: and stabilize. But yeah, no, I do think that this
Speaker 1: industry needs retail investors in order to get more mainstream
Speaker 1: adoption and fulfill what many think is, you know, it's destiny,
Speaker 1: which is that crypto is going to be, you know,
Speaker 1: an incredible form of money, that it's going to give
Speaker 1: people more financial freedom, and that it's going to be
Speaker 1: an easier way to conduct transactions. Like Yeah, retail investors, Uh,
Speaker 1: it's a huge question of how they're going to be
Speaker 1: lowered back in and it's been very interesting. I've been
Speaker 1: you know, looking at what projects are gaining funding, what
Speaker 1: what's being invested in. And NFT gaming startups are like
Speaker 1: a huge draw for for VC firms. Yeah, they see,
Speaker 1: you know, n f T gaming is a way to
Speaker 1: kind of bring your average consumer back into crypto. Everyone
Speaker 1: loves virtual gaming. You know, it's a fun, easy thing.
Speaker 1: It's a clear end product, unlike some complicated decentralized finance
Speaker 1: platform the mechanics of which usterers might be leery of.
Speaker 1: It's interesting to see what's still you know, staying resilient
Speaker 1: during this time. Can you actually talk a little bit
Speaker 1: more about that, because even I can't picture what it
Speaker 1: looks like. It's a n f T gaming platform, what
Speaker 1: specifically does that mean? Yeah, so uh this kind of
Speaker 1: bleeds into the metaverse of course, such a buzzword um
Speaker 1: over the past year. But yeah, I know, like a
Speaker 1: lot of startups out there are building virtual worlds. Some
Speaker 1: of them are in blockchain, some of them aren't. Some
Speaker 1: of them just incorporate blockchain elements like non funcible tokens.
Speaker 1: But yeah, these are just like really exciting projects that
Speaker 1: are happening here. And you know, there have been other
Speaker 1: games in the past. I'm thinking of Acxie Infinity, you know,
Speaker 1: which used n f T s, but that was definitely
Speaker 1: a more decentralized, finance focused game. In my opinion, a
Speaker 1: huge part of it was like making money. I think
Speaker 1: some of these new games that are being built are
Speaker 1: more focused on a play and earn model, So it's
Speaker 1: like making money may not be the main objective. It
Speaker 1: might be part of it. You can do a free
Speaker 1: to play option. Yeah, people are excited about what these
Speaker 1: virtual worlds are going to look like, and also the
Speaker 1: advertising opportunities that could be present. You know, if you're
Speaker 1: in a digital world, you might see digital ads around you,
Speaker 1: and I think that's part of why investors are still
Speaker 1: interested in n f T gaming deals. So this is
Speaker 1: maybe one example of something that might help draw the
Speaker 1: average investor, the retail investor, back into the space. Do
Speaker 1: you think that prices need to start recovering first before
Speaker 1: the average investor steps back in, or is it that
Speaker 1: wants the retail cohort actually wades back into the space
Speaker 1: that that actually will help propel prices higher. The chicken
Speaker 1: or the egg, Oh yeah, that's that's that's a really
Speaker 1: good question. It's a tough question, but yeah, I know,
Speaker 1: I inc definitely retail investors need to come back in
Speaker 1: to help boost prices. And something like you know a
Speaker 1: game or you know, a new offering from a tech
Speaker 1: company that uses crypto things like that that it's like
Speaker 1: sort of a blend between a mainstream company and a
Speaker 1: crypto native company. I think something like that could help
Speaker 1: uh LAW investors back in, And I do think retail
Speaker 1: investors are needed to boost prices. We were talking about
Speaker 1: October and how potentially it can be a solid month
Speaker 1: or a better month than the last couple that we've
Speaker 1: had over the summer, and something funny has actually happened
Speaker 1: in the first half of October four bitcoin. So typically
Speaker 1: bitcoin and other other cryptocurrencies tend to be much more volatile.
Speaker 1: They swing just to a greater extent than stocks do,
Speaker 1: for instance, or many other asset classes. And bitcoin actually
Speaker 1: has been less volatile by some measures then, and stocks
Speaker 1: have been just the moves in the stock market have
Speaker 1: been crazy, keeping me up late at night. But I'm
Speaker 1: wondering how this can be. Can you explain this to us, like,
Speaker 1: what is going on? Is it maybe the case that
Speaker 1: we just saw so much of the selling already happened
Speaker 1: in the first half of the year, and potentially does
Speaker 1: that mean that the the end of the year could
Speaker 1: be a bit better. I think what you said, like
Speaker 1: that a lot of the sell off happened earlier this
Speaker 1: year is part of why you know October could be
Speaker 1: maybe a decent month for crypto. We still see stock struggling,
Speaker 1: we still see SMP five hundred struggling, we still see
Speaker 1: tech companies having a difficult time during this month. But
Speaker 1: I do think there's hope that that won't be the
Speaker 1: case for bitcoin. Also fun fact, Stoshi Nakamoto, the creator
Speaker 1: of bitcoin, who uses a pseudonym, published the Bitcoin White
Speaker 1: Paper on October one, thousand and eight, Halloween. So I
Speaker 1: think some diehards within this industry, some of the major hoddlers,
Speaker 1: you know, they look to October as is an awesome
Speaker 1: time and a great anniversary for the world's largest cryptocurrency
Speaker 1: by market cap. What are you going to be doing
Speaker 1: to celebrate bitquin's birthday? My birthday is actually very close
Speaker 1: to Bitpoin's birthday. Happy birthday, thank you. So yeah, I
Speaker 1: think I'm going to be traveling during that time and
Speaker 1: throwing a joint party, I hope. Yeah, yeah, we're best friends. Well, Hannah,
Speaker 1: thank you so much for joining us. All right, thank you.
Speaker 1: You can find more of Hannah Miller's reporting on the
Speaker 1: Bloomberg Terminal, on Bloomberg dot com and on Twitter. She's
Speaker 1: at h G. Miller. On the next episode of Bloomberg Crypto,
Speaker 1: we're going to get a behind the scenes look at
Speaker 1: a very special project from Bloomberg business Week, who are
Speaker 1: publishing an entire issue dedicated to one question, what is Crypto?
Speaker 1: This is Bloomberg Crypto, a daily podcast from Bloomberg and
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Speaker 1: producer of Bloomberg Crypto is Vicky Vergolina. Our senior producer
Speaker 1: is Janet Babin. Our producer is Sharon Barriro. Associate producer
Speaker 1: is Thy Butler. Desta wonder At is our engineer. Original
Speaker 1: music by Leo Sidron. I'm Stacy Marie Schmal We'll be
Speaker 1: back tomorrow,