00:00Tony Edward joins us now for a one-on-one interview here on the trading floor of the New York Stock Exchange.
00:04Tony, of course, longtime friend of ours.
00:07He is author of Rethinking Crypto and host of the Thinking Crypto podcast.
00:11Thank you for being here. Quite the time to be talking crypto majors.
00:15Absolutely. I'm happy to be here with you.
00:17And I wish the price of Bitcoin was above $100,000, but the market is what it is.
00:21The market certainly is what it is.
00:23Peak to trough Bitcoin from Monday, October 6th to Friday, November 21st, 36% sell-off in seven weeks, a 46% sell-off for Ethereum over nine weeks.
00:34Tony, what is going on?
00:36It's a painful time, but these type of corrections are not uncommon in the crypto market.
00:41I've been in this market since 2016, and I remember my first bull market in 2017, we saw 36% drops, 40% drops.
00:48So the volatility is par for the course.
00:51However, a lot of folks are a bit uncertain about this correction.
00:54Is it the top of the market, or is this your regular run-of-the-mill correction?
00:58Because the four-year cycle timeline, if you're counting days, has played out for Bitcoin.
01:03But the macro with the Fed cutting rates, ending quantitative tightening, crypto market structure on the table, getting ready to pass in the Senate,
01:13those things are setting up a bullish narrative, which could send crypto higher,
01:17but it's still uncertain because the charts are showing some bearish signals.
01:21So if you're talking monetary policy, it leads me to a question on correlation,
01:24which I think a lot of people have been trying to figure out.
01:26What is and what is not Bitcoin really ultimately tied to?
01:30Maybe some of the argument is, if the central bank takes off the table the possibility of interest rate cuts,
01:36riskier assets get impacted first, tech and discretionary stocks, maybe Bitcoin majors as well.
01:41How do you think we should think about the relationship between the crypto majors and the Fed?
01:45I think as Bitcoin and the crypto asset class has matured over the years, it's become more of a macro trade.
01:53It's moving along with the stock market.
01:55There's a strong correlation there.
01:57Now, because it's still very young and there's not as much liquidity, it gets affected worse than the stock market.
02:03So to your point, if the Fed makes certain decisions, you could see the volatility spike in one direction, either up or down.
02:09And that's why you see so much fear right now in the crypto market, even though the stock market was down a bit and it's starting to recover.
02:17But crypto is taking the blunt of the hits because it's still very young.
02:21There's still not a lot of crypto market structure in place from the government, even though that's on the table.
02:28So it's correlated to the macro, I would have to say.
02:31As it's maturing, we're seeing that clearer and clearer.
02:34How should we think about leverage?
02:35We're hearing a lot about the crypto exchanges.
02:37They are allowing crypto investors 50x, 100x, 200x.
02:41And when we have these thin liquidations and thin off the top numbers, we have this cascading effect.
02:46Hey, it's great to the upside, Tony.
02:48But when we get these downward pressure points on price action, man oh man, who wants to catch that falling knife?
02:54Leverage in crypto is very dangerous.
02:56Case in point, October 10th, Donald Trump tweets out about China and the tariffs.
03:01We have the largest liquidation ever in the crypto market.
03:05And that, it almost seems like we haven't recovered as yet.
03:08There's still a lot of hurt and pain from that.
03:11So I would caution folks, be careful with leverage.
03:14Look, if you know what you're doing, you're a seasoned investor, you've been at this and you know how to handle risks when it comes to leverage, go for it.
03:23But if you're new to it, be careful.
03:25I would avoid it.
03:25Spot Bitcoin ETF inflows versus outflows, what have we seen alongside the downward pressure on prices?
03:33There were multiple weeks of outflows, but the overall trend is still up and we're starting to see the inflows recover now.
03:40I think ETFs are, you know, living, breathing financial products.
03:44So you're going to see naturally folks deleverage over time or distribute, I should say.
03:50And that's healthy.
03:51But if you look at, for example, BlackRock's Bitcoin ETF, the overall trend from the macro is continuing to grow.
03:59They now have over, I believe, 700,000 Bitcoin in their ETF.
04:04And that's not to mention Fidelity's ETF and Franklin Templeton and the others.
04:08People will always wonder at what point are we in a new winter, the days of the bulls behind us?
04:15How are you approaching that sort of thinking and questions undoubtedly from your listeners?
04:19Yeah, that's the big uncertainty right now.
04:21Folks want to know, are we heading into 2026 and are we still in a bull market?
04:26You know, are we going to see the bullish rallies?
04:28Right now we're seeing Bitcoin do a small uptick.
04:30This looks like a relief rally or it could be the start of the next leg up to new all-time highs.
04:35Because that's the big question everyone has.
04:38Is it just a dead cat bounce or the continuation of the bull market?
04:42And I've been here since 2016.
04:44I'm a bit uncertain.
04:45But if I'm weighing the scales, right, if I'm putting bear and bull scenario, I think the bull scenario has the higher probability of playing out.
04:53Because the Fed just ended quantitative tightening.
04:56Rate cuts, I think, are going to continue because of the job numbers that came in recently.
05:00And you have market structure, which if that gets approved, that's going to open up a lot of liquidity to come into the market.
05:07You have crypto companies looking to go public, securitize, cracking, grayscale, and others.
05:11So the milestones, the landmark events are still ahead of us.
05:16And I'm leaning more bullish.
05:18But look, who knows?
05:19I don't have a crystal ball.
05:21We could see that's it.
05:22That could be the end of it.
05:23It's just a relief rally.
05:25Yeah, you highlight some important catalysts there.
05:26Of course, if the Fed does cut because of a weakening in labor conditions, given the ADP payroll print, is what I think you were just alluding to there a moment ago,
05:35that might be interpreted a little bit different by market participants than if the Fed is cutting because it's got a control on inflation.
05:41But that's at least for equities.
05:43Crypto majors may respond in their whole own way.
05:45You talk with a lot of amazing experts and guests on your podcast.
05:48Talk to me about some of the key insights, the major themes they are sharing with you that you think we should be paying a bit more attention to.
05:55So folks are very optimistic.
05:58They're heads down building.
06:00The innovation is starting because we're getting crypto market structure and legislation.
06:05So we got the Genius Act passed this year.
06:07So a lot of stable coin innovations happening.
06:10And everyone is anticipating, I think, under the Trump administration that, look, market structure is going to happen.
06:14So everyone's getting ready to hit the ground running.
06:17It's like everyone's at the race line waiting for the go ahead.
06:21And I think once crypto market structure is passed, and this is the indication I'm getting from a lot of guests, we're going to see a lot of crypto M&A.
06:30And it's not just TradFi buying crypto firms, but crypto firms buying TradFi firms as well.
06:36Yeah, we've seen Coinbase start to do this, Ripple with Hidden Road.
06:40So I think that's going to boom.
06:42And then just recently, I think just this week, SEC Chair Paul Atkins was here at the New York Stock Exchange.
06:47He talked about wanting to make IPOs great again.
06:50And I know there's AI IPOs on the horizon, but there's a lot of crypto IPOs.
06:54So, again, I think people are looking towards those things optimistically, and they're seeing there's one more leg maybe left in this market before we call it, you know, that's the end of it.
07:05Yeah, we've had a few of those.
07:06Bullish was down here just IPO not long ago.
07:09That's Tom Farley, former NYSE president, now leads that firm.
07:12And obviously, we've had a lot of others.
07:13So the pickup of the potential IPO conversation as interest rates ease will be a big one for 26.
07:19And, J.D., no one in the history of markets, IPOs or goes public in a bear market.
07:25There's no liquidity.
07:26Right.
07:27So, again, if these folks are looking to do that in 2026, that's why I'm leaning more, tipping the scale towards the bulls.
07:35Yeah, it sounds like there's cash to be deployed, at least in this environment, in the mindset of many, if you've got this much interest.
07:41Right.
07:41Before I let you go, we're almost to the end of 2025, almost a full year into President Trump's 2.0 term.
07:49What has that meant for the broader crypto ecosystem, even in terms of things like you mentioned Paul Atkins, an SEC that may be a bit more willing to clearly define the rules of the road?
07:59What's a security?
08:00What's a commodity, et cetera?
08:01Yeah, look, I think the Trump administration has been net positive for crypto.
08:06However, has Trump thrown some monkey wrenches in the system that were major headwinds for us?
08:11Yes, tariffs.
08:13Plus, he launches on meme coin, which I'm not a fan of.
08:15I thought that stole some liquidity from the crypto market.
08:18Down 60%, about 60%.
08:19Yeah.
08:20So I think we're still recovering from some of those things, but I think net positive overall, because legislation is key to unlocking innovation and more liquidity.
08:29And you mentioned SEC Chair Paul Atkins.
08:32You know, one of his statements in this week was they want to provide crypto rules, the SEC, directly, but also contribute to passing the Clarity Act, the Market Structure Bill.
08:41And I think, once again, that's just going to unlock a lot of innovation and liquidity to come into the market.
08:47No longer will folks have to look over their shoulder.
08:49No longer will they have to be under fear.
08:51I'm going to get a Wells notice or a lawsuit.
08:53And I think we're going to see the IPO boom and the innovation boom.
08:56I got one more for you.
08:58Sure.
08:59I cover stocks almost full time.
09:02And so when we talk about the benchmark indexes, my frequent go-tos, as is for all of us down here.
09:07You look at the S&P, you look at the Dow, you look at the NASDAQ.
09:09When we talk about the crypto majors, we tend to gravitate towards here's Bitcoin, here's ETH, here's Solana.
09:15But from where you're situated, are we looking at the right?
09:18I've always wondered this from an expert.
09:19Are we looking at the right crypto benchmarks or are there others you think we should be talking more about?
09:24That's a great question because it's very easy to look at the top one to five assets and say, you know, these are good to invest in.
09:32But what we're seeing, and it's along the lines of the SEC, we have some clarity around the ETFs.
09:38And we're seeing issuers are issuing ETFs beyond Bitcoin, Ether, Solana, and XRP.
09:44They're going to AVAX.
09:45They're going to Cardano.
09:46They're going to HBAR.
09:47These are assets that are in the top 15 to 20.
09:50So I would say look, explore the top 15 to 20.
09:52Obviously, do your research, but we're seeing the ETF being issued for those additional altcoins.
09:58See, I knew you were the perfect person to ask that question to because you dropped some knowledge there that I, you know, listen, I, you know, you do all these shows, you do all these interviews.
10:05And I think I'm going to the right stuff, but I'm not the expert in this stuff.
10:08You are, and that's why we bring you in.
10:09And I've been interviewing a lot of the issuers like Franklin Templeton, Grayscale, and these folks.
10:14So they're telling me about their methodology and their approach.
10:17So Grayscale, for example, launched their Chainlink ETF just Tuesday, I believe it was.
10:23And there was a Dogecoin ETF by Bitwise.
10:25So these issuers are in a race now.
10:27Everyone is trying to do a land grab, right?
10:29Get your ETF out there.
10:31And we're seeing some great performance despite the market being down right now.
10:35What a fascinating time to have this conversation.
10:36Tony Edward is the author of Rethinking Crypto.
10:39He's also the host of the Thinking Crypto podcast.
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