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Breaking down the state of the crypto market

Flori Marquez, BlockFi Co-Founder, joined Yahoo Finance Live to break down the current state of the cryptocurrency market.

Video Transcript

SEANA SMITH: Bitcoin under a bit of pressure today, off just around 2%. Will be trading just below $38,000, off about 13% in the past month. We want to talk about this, what this means for the broader crypto markets. For that, we want to bring in Flori Marquez. She's the co-founder of BlockFi. And Flori, it's great to have you on Yahoo Finance. And BlockFi, for any of our viewers who aren't familiar, investors can buy and sell cryptocurrencies on your platform. You also function as sort of a crypto bank. I'm curious just to get your thoughts on the volatility that we've seen in Bitcoin recently. Yes, it's not anything new, but how does it impact your business and the platform?

FLORI MARQUEZ: It's great to see you again, Seana. And there has been a lot of volatility in the price of Bitcoin, specifically in the month of May. But the important thing that I always like to remind people of is the bigger picture. And Bitcoin is actually still up 4x at its current price of $37,000 than this time last year, at its price of $9,000. And if you compare that to the NASDAQ, which in the same time period only gave returns of about 40%, or the S&P, which returned 31%, that's still an incredible return to have in your portfolio.

And what we saw on the BlockFi side-- so one of the products that we offer is trading, both on the institutional side and on the retail side. And on both sides, clients throughout this period of volatility were net buyers of crypto in the recent swings of the market. And the other thing that we saw, specifically on the institutional side of the business, was that more household name alternative asset managers actually moved into the space throughout the month of May than any other month in history.

And both of these factors led to what we saw at BlockFi being one of the strongest months for company performance in our history. So we always say that volatility is opportunity. You're right that volatility is not new to anyone who has been investing in crypto. And net-net, we saw that when the price dipped down, people who are waiting on the sidelines to get in for the first time use that as an opportunity to move into the space.

ADAM SHAPIRO: Hi, Flori. When a billionaire, though, loses big, it's got to hurt, I would imagine, the perceptions of where this is all headed. Now you've got Mark Cuban calling for stablecoin regulation after something he invested in went from, what was it, $60 down to bupkis, nada, zilch, nada, nothing. What does that do to perception?

FLORI MARQUEZ: Yeah. So it's still very early in the asset space. And I'm a huge believer in more of the mainstream coins, if you will, like Bitcoin and Ethereum. Like any rise in technology, like the early days of the internet, you're going to see a lot of new types of technology come up that have been unproven. I'm a huge believer in just the things that are mainstream and have been proven, which are Ethereum and Bitcoin.

And to your point on regulation, I absolutely believe that the industry needs more regulation. Last week, we had the Senate hearing, which was the first of many more hearings to come. And I was really excited about the questions that were being asked in that hearing, which were particularly some questions like, what would crypto look like if it was a part of the US's monetary system? How would you bring in bank regulators to decide how banks could hold Bitcoin?

So all of this, to me, points that we're still really early in this asset story. It means it's still an interesting investment to hold in your portfolio. Recently, you were talking about the moves in the stock market as a result of the Fed's hawkish news. And one thing that we saw was that, like historically we've seen with the price of Bitcoin, it didn't really correlate directly with the prices of the moves that you saw in regular stock.

So overall, we're still early in the space. We do need more regulation, and it's a very interesting asset to hold in your portfolio.

SEANA SMITH: Flori, digging into that just a little bit deeper, do you think that regulation-- do you think it will help it go more mainstream? Do you think it will also help investors take cryptocurrency a little bit more seriously?

FLORI MARQUEZ: Absolutely. Really, the question that we're asking here is how can you trust this asset class? And how can you trust the institutions that are providing you access to this asset class? And I do believe that both consumers and institutions alike are more likely to enter the space if there's clear guidance in terms of how these assets should be regulated. So BlockFi, very early on, our first hire was our chief compliance officer. We've been working with regulators since the beginning, when we were founded in 2017. And I think that increased consumer protections only leads to better adoption.

SEANA SMITH: Flori Marquez, great to have you, co-founder of BlockFi. We look forward to having you back.