00:00Really good to have you with us. There's been a lot of focus on what's been happening, not just in global equities, but also in the crypto space as well with that huge pullback.
00:08We're sitting at around $86,000 now in Bitcoin. Who is selling, Rachel? Is it institutional clients or is it retail?
00:17So thanks so much, Jamada. Great to be here. So from our vantage point where we sit across ETF and hedge funds, the majority of the selling pressure has actually come from retail investors.
00:28And let's not forget that retail is often momentum driven. So that's really been where most of the selling has been coming from.
00:36While institutional investors, we actually see them either continuing to accumulate on this side.
00:41And this is whether you look at, say, the Treasury holding companies like Strategy.
00:46Michael Saylor announced earlier this week that he was buying an additional 8,000 Bitcoin.
00:52So really it has been momentum retail driven from our vantage point.
00:58You know, since you mentioned Michael Taylor's strategy, I was reading a note the last couple of days.
01:04Analysts at JP Morgan have said that the that its strategy could lose.
01:09The company could lose its place in some of these indices like MSCI and Nasdaq 100.
01:14If that does happen, then it could bring about four selling to the tune of billions of dollars.
01:20How much of a catalyst do you think that could be for perhaps a further leg down in Bitcoin?
01:27Well, I think you have to look at the role that some of these Treasury holding companies originally played.
01:33So they were really the quasi Bitcoin ETF before Bitcoin ETFs were actually available due to SEC regulation.
01:41And now we have seen a number of new Bitcoin Treasury holding companies, but also Treasury holding companies in other areas.
01:49I also think it depends on what their entry point was.
01:52And some people are still using this as a proxy for getting into the Bitcoin market because their investment parameters allow them to invest in equities,
02:00still doesn't allow them to invest necessarily in digital assets per se.
02:04I mean, you also need to look at this in the context of the greater market and some of the recent events that we've had.
02:10There is fear in the market right now, but I think that is also natural reaction to what's been happening with the mass deleveraging event that we saw in October.
02:21And the, you know, 19 billion was wiped out, which was almost twice the size of the FTX in 2022, the crash there.
02:29And what we're seeing in the market now in terms of the fair is that it's almost like an aftershock and an earthquake.
02:36You know, there were two key parameters that had this happen.
02:39You had the you had the crowded positioning and you had the excessive leverage.
02:44And so after a period like this, it's only natural.
02:47Yeah, I was going to ask you about that.
02:49Yeah. So maybe we just do.
02:50Yeah. So how long does it take to clear out?
02:52Yeah. How long does it take to clear out the extra leverage in the system since you think that's one of the catalysts for the drawdown that we're seeing?
03:01Yes. You actually mentioned the evaluations earlier in your piece, Jumana, and how you have to put it in the context of recent history.
03:07So I would like to do the same here for digital assets.
03:10So we did have the surge of Bitcoin to over 126,000 earlier in the year.
03:15And then we had the massive deleveraging event that happened on October the 10th, like I just mentioned.
03:22Now, while the severity of the crash was geopolitical, you had President Trump's 100 percent tariffs on China.
03:28It was largely due to leverage in the system and the crowded positioning.
03:33A lot of that has been flushed out. And we actually expect that this is we are towards the end rather than the the beginning of that.
03:42So we expect a period of consolidation around 90,000 before the broader uptrend actually continues.
03:50Yeah. OK. I was going to ask you about where you think we stabilize and we're just a bit below that.
03:55So probably around these levels then the other phenomenon that's taking place is the dollar has been strengthening.
04:01Is there still somewhat of a correlation between the USD and Bitcoin here?
04:06I remember earlier in the year we were talking about money perhaps moving away from the U.S. dollar into other assets like gold, like Bitcoin.
04:13With the dollar strengthening, does that perhaps pose a challenge to some of the upside thesis?
04:19I think Bitcoin still has. I mean, Bitcoin has a number of macroeconomic drivers.
04:24And you've also got to look at in parallel, there's a lot of the rise of stable coins in the digital asset space,
04:30which is really helping to lift the entire market as well.
04:34I think that the Bitcoin price and the U.S. dollar price, it also was historically correlated to the money supply as well.
04:42And a lot of the price movement that we saw earlier in the year was in anticipation of Fed rate cuts as well,
04:49as well as general adoption and increased investor sentiment coming out of the U.S.,
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