Yahoo Finance’s Julie Hyman, Brian Sozzi, and Myles Udland break down the market action for bitcoin.
- All right, hard pivot here. Let's talk about the big markets news over the weekend. And that of course, everything going on in Bitcoin land. We see Bitcoin under a little bit of pressure this morning. But trading above $30,000 at the current hour, $31,000 mid or so. We saw-- you see that brief dip on the chart here on the left side of your screen. And we did see Bitcoin under $30,000 for a time earlier this morning, well off the highs that we saw over the weekend.
Brian Sozzi, it was kind of the big story at the end of last year, everything going on in crypto land. And I don't know, I guess my question to you would be, at what point do we as the financial media sort of stop following every tick of Bitcoin? And at what point do we say, hey you know, it's volatile. Goes up goes down and life goes on.
I mean, it's not going anywhere. I mean, so the 2017 conversation was, is this thing, you know, fraudulent, a scam, whatever? No one talks about that anymore. That's not really interesting. So at what point do we stop caring about every $1,000 move in this thing?
BRIAN SOZZI: Well, I think you have to start looking for fundamental changes in the story. And there do seem to be some things emerging, guys. Look, CME will launch Ethereum futures in February. That is something fundamental to the market. That gives investors something to speculate on into. But again, that is going to happen.
Next up-- and I point to a very cool note out of BTIG's Mark Palmer. Now, this is a little bit of speculation. But again, this could fundamentally change the market.
Lost in the shuffle last week, VanEck, a big player in the ETF market, filed an S-1 registration to list the VanEck Bitcoin Trust. The kicker here-- this would hold-- this potential ETF would hold physical Bitcoin. That could lead to really a massive imbalance-- a further massive imbalance-- between Bitcoin supply and demand. Obviously, this has not been approved by the SEC yet.
Palmer also notes that in August, 2018, nine applications to register Bitcoin ETFs were turned down by the SEC because of concerns about a manipulation and a lot of fraudulent activity in the market. But again, these are potential catalysts that I think you're seeing this market trade into.
- Yeah, just to pick up on the ETF theme there, Sozz, I have to say I'm still skeptical that one of these is going to get through because the regulatory backdrop hasn't necessarily fundamentally changed. And to your point, yes, VanEck has made these attempts before. And there have been all of those other rejected ETF applications. So unless something changes in the way that they are presenting this ETF, it's hard to see regulators passing it and getting it through even if under a new regulatory regime under President-Elect Joe Biden, there would be a shuffling of the people, certainly at the SEC, as Jake Clayton steps down, but other regulators of Bitcoin and the banking and finance systems in the US as well.
So that's something to keep an eye on. And of course, with Bitcoin, there's always a lot of chatter, right? It's never just the fundamentals, whatever the fundamentals for Bitcoin are. But of course, one of the latest memes to hit is sort of finance and BC people moving to Miami, which I know Myles has thought a lot about. But you have to wonder, too, as we see the volatility in Bitcoin, how many of these folks are cashing in at least some of their holdings in order to make moves to wherever they may be, or make purchases of whatever kind. I mean, you have to think that some of these people who have made a lot on paper from this Bitcoin appreciation at some point are going to want to turn that into real money, aka dollars, that they can use to buy stuff.
- Yeah, I mean, certainly that's going to have to happen at some point if you want to realize your gains. Though on the other hand, I mean, the only real fundamental story that is clearly obviously happening with Bitcoin is that there's an imbalance here with the number of people who would like to acquire bitcoins and the number of people willing to sell them. Now of course, this becomes self-fulfilling, and we're all familiar with Soros' reflexivity and so on and so forth.
But you know, there's really no other way to explain this dynamic that we're seeing in the chart here, especially the last couple of months of the year, than there was more demand for Bitcoin than there was salable Bitcoin. And I think that dynamic is probably likely to continue if we have more whales in the market. So if there's bigger holders of Bitcoin, then they are incentivized to make a smaller portion of their available Bitcoin salable, right?
The liquidity kind of disappears in the market. And I think that's certainly a dynamic that is driving things, and really has driven things for this market for some time. And we'll see how that unfolds as we get into the rest of this year.