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Fed: ‘I wouldn’t be surprised if they actually moved’ to a 100 basis point hike, strategist says

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BloxCross Global Head of Markets Strategy Keith Bliss joins Yahoo Finance Live to discuss the launch of crypto exchange CEX in Colombia, the state of the stock market, and the expectations for the Fed's FOMC meeting.

Video Transcript

BRIAN SOZZI: All right, let's get a quick check of the markets here. You're seeing losses accelerate. Really, the Dow now down over 100 points a year. S&P 500, NASDAQ also in the red as we await that decision on Fed policy tomorrow. But I do want to get over to the high chairs where Jared Blikre is standing by with a special guest. Jared.

JARED BLIKRE: Oh, I got to tell you, I love these high chairs here. And sitting with me is Keith Bliss. He's on the board of directors of BloxCross. And we're going to talk about that in a second. But first, let's take the opportunity to talk about the general markets here. We've been talking about the big Fed decision. They're meeting right now, tomorrow maybe hiking 75 basis points. All of this comes within the last 24 hours. Bond market is chaos. Stocks are taking big hits here. What are you seeing?

KEITH BLISS: Yeah, I guess the only positive thing is that we're still walking around and talking to one another. And I'm glad to be back here in the Yahoo Finance studios.


KEITH BLISS: Yeah, I mean, listen, there's enough bad news around. And as it relates to the destruction in the markets, both on what we're seeing on the supply side and just generalized markets, but also when you look at cash equities. Bonds are gyrating in these spasms right now, trying to figure out where it is going to be the interest rate move.

And equities, of course, do not like higher interest rate environments and low earnings. Those are the two things that could really take a hatchet to that. And that's what we're seeing. I think 75 basis points tomorrow from the Fed is baked in the cake. And I wouldn't be surprised if they actually moved 100.

JARED BLIKRE: All right, well, let's talk about the crypto world here because you are launching a new crypto exchange in Colombia. And you're going to venture out from there. Tell us a little bit about it.

KEITH BLISS: Yeah, thanks for asking. Yeah, so BloxCross is the name of the company. We started on this project a little over a year ago. A friend of mine that I met at Knight Securities about 100 years ago-- actually 23 years ago.

JARED BLIKRE: I remember Knight from back in the day.

KEITH BLISS: Yeah, he was a technologist. And I was running institutional electronic trading at that time, whatever that business meant at that time. And we really formed a nice partnership. He also is a technologist by trade. And one of his past experiences in the last three years was the global head of financial markets for the old Hortonworks, which merged with Cloudera.

I've been working on digital asset projects since 2016 in the investment banking world. And Diego Baez is his name-- was able to travel around the world. And we really saw the trillions of dollars that had been spent in digital infrastructure. And we saw an opportunity based upon what we've seen in the last six years. This is a case where being first mover is not an advantage, but actually a disadvantage. Because--

JARED BLIKRE: That's interesting. You would have been-- six years ago, we didn't have NFTs. I think the term was coined, what, two or three years ago--


JARED BLIKRE: --at the very earliest. So you weren't a first mover, but that's an advantage somehow.

KEITH BLISS: It is because, again, I was early from the investment banking standpoint. What we called NFTs back then were utility tokens, right? We were trying to tokenize everything. Your glasses, this TV studio, a building, but we were just too early. But now we've seen what can happen both in the cryptocurrency world, as well as the NFT world.

And we selected a region of the world where there are low barriers to entry, a very large addressable market, a real interest and curiosity, a real sarcasm, if you will, towards the monetary policy in the region, and large distribution of technology and a very underbanked market. So bringing a cryptocurrency exchange is just the first step that we have, but it provides the foundation for all the innovation that we're going to do inside of the digital assets company, which is BloxCross.

JARED BLIKRE: Well, let me ask you something. I think about-- you mentioned Brazil. You're launching in Colombia, Mexico as well. I think about, what do these places have in common? Well, there's no Gary Gensler running the show down there. That could be a good thing, or it could be a bad thing. If you're a good operator and you just want low barriers to entry, guess what? DeFi is taking off in ways that it cannot here, because it's being blocked, in certain ways. It's very slow to launch.

KEITH BLISS: Well, one of the foundational tenets-- having said that, you're absolutely correct. And one of the reasons we went to that region, low barriers to entry from a competitive and regulatory landscape. However, because we all come from a regulatory background, including myself-- over 25 years in the brokerage industry, so I've been regulated the entire time-- we are approaching the startup phase with that regulation in mind. It's coming. We're accepting of it.

So everything that we've put inside of the app and client onboarding already does-- know your customer, anti-money laundering. We do ID verification. So we're already well ahead of the curve on that because we know it's coming. And we're going to be ready. And we want to participate in structuring that regulation when it comes down the pike. So, yes, that will allow us to get into those markets with a low expense, low spend, to get out of there.

But again, we think one of the things that we bring is security, running into regulation, a good client user experience, and being able to then eventually extend into banking services for the underbanked or unbanked in that region.

JARED BLIKRE: Before we go, we got time for one more. I got to ask you about the price of crypto. We've had some huge washouts. Can you say Celsius, Terra? And price of Bitcoin, I think, hit $21,000 overnight. But we were talking offline about the institutionalization and the buildout. The infrastructure is here. My theory, when we hit almost $70,000, failed to really break out, was $13,000 is in the cards because that's where you can really accumulate. Crypto winter kind of feeds the beast.

KEITH BLISS: Yeah, I mean, listen, I'm old enough to have lived through four bear markets starting in 1987. And bear markets, as painful as they can be and as changing as they can be, they're actually good for industries that clear out all the weak ends, the bad business models. What you see in the crypto world, though, is that cryptocurrency prices are tied to the business models of the companies that issue those. So that's why a lot of them are being sent southward at this point in time.

And unfortunately, a lot of them may fail. For us, what we do is we're centralized exchanges. We come out-- think of us as the New York Stock Exchange in Latin America for cryptocurrencies. We hold none of the balance. We're not the market maker. We simply provide the technology to allow people to enter this market.

JARED BLIKRE: I'll tell you what, Keith. I think I met you my first week on the job. I was a producer on Yahoo Finance's "Midday Mover." And I would dial the New York Stock Exchange, and you would be there like magic every Wednesday. So are you going to be in? Maybe I'll dial you up in Colombia at the New York Stock Exchange of Colombia down there, Bogotá. Keith Bliss, BloxCross global head of market strategy, thanks for joining us here today.