- 6 hours ago
Bitcoin is back above US$66,000. Is this the start of a new bull run or another wave of market optimism?
We speak with Aaron Tang, the General Manager APAC, Luno about Bitcoin's evolving role as a macro asset, the impact of interest rates and inflation, implications for Malaysian investors, and the key catalysts that could determine its trajectory over the next 12 months.
We speak with Aaron Tang, the General Manager APAC, Luno about Bitcoin's evolving role as a macro asset, the impact of interest rates and inflation, implications for Malaysian investors, and the key catalysts that could determine its trajectory over the next 12 months.
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00:00Bitcoin has once again captured global attention, reclaiming the US$66,000 level after weeks of volatility and renewed uncertainty
00:08across financial markets.
00:10While some investors viewed the latest rally as a sign of strengthening fundamentals and growing institutional confidence,
00:16others remained cautious, questioning whether sentiment and speculation continue to drive much of the momentum.
00:21So to help us understand what's behind Bitcoin's recent strength and what it could mean for investors moving forward,
00:27we're joined by Aaron Tang, the General Manager of APEC-LUNO. Good morning, Aaron.
00:32Good morning, Nabila. Thank you for having me.
00:34Thank you for taking the time to speak with us.
00:36Like I mentioned earlier, Bitcoin has reclaimed the US$66,000 level after weeks of volatility.
00:42So in your view, Aaron, is this rally being driven by stronger fundamentals or are we once again seeing a
00:47market fueled primarily by sentiment and speculation?
00:50What are your thoughts?
00:52Yeah, from my perspective, I think it is more towards the stronger fundamentals because a lot of the speculation that
00:58we've seen definitely from retail investors,
01:01a lot of speculation that has been flushed out over the past couple of months, given that the price action
01:05hasn't been very, very good.
01:07If we look at things like institutional inflows by ETS, we look at things like clearer global regulations,
01:14we look at things like on-chain metrics such as the number of long-term Bitcoin holders and so on,
01:19all these are actually uptick on an upward trend right now.
01:23So I think it does point towards more stronger fundamentals and I think this is quite encouraging for the sector.
01:29But how significant is this price level from a market psychology perspective?
01:34Could breaking above this US$66,000 trigger a new wave of institutional and retail participation?
01:40Or are investors becoming more cautious than in previous bull cycles?
01:45I would say definitely we are not yet in a bull cycle because it has been quite difficult for the
01:51retail investors,
01:52especially over the past couple of months, since we hit US$126,000 about one year ago now, I believe.
01:59So I don't think we are yet in a bull cycle.
02:02That being said, I think the response from the institutional investors, that has been really, really encouraging,
02:08not just here in Malaysia, but just all over the world.
02:11You look at the amount of things happening in the world, tokenization, stable coins, ETFs and so on.
02:17That has actually not really slowed down since the last price peak.
02:22So yeah, I wouldn't say that US$66,000 itself is like a very significant price level.
02:27If anything, probably for the retail investors, we need to go a little bit higher before some of the interest
02:34starts to come back strongly.
02:36But again, I think we are very, very encouraged by seeing what happens in the institutional level of things.
02:41Help us understand better, Aaron.
02:44To what extent are macroeconomic factors such as expectations of interest rate cuts, inflation trends and geopolitical uncertainty
02:51actually contributing to Bitcoin's recent strength compared to crypto-specific developments?
02:58Yeah, definitely.
02:59I think macro factors are so, so dominant, so important right now.
03:02Some people are saying that for the past couple of months or maybe just the very, very recent few years,
03:09Bitcoin is trading more and more like a macro-related asset as opposed to something just driven very much by
03:16speculation or retail interest.
03:18So that's definitely taking big, big impact right now.
03:22So for example, things like interest rates, things like global political developments around the world.
03:31So for example, conflicts around the world, that is all playing very, very heavily into the price action right now.
03:38So I think that it's probably healthier if we compare it to just a lot of previously, a lot more
03:45speculation, which is more in the early years.
03:48And that raises an interesting question about Bitcoin's evolution as an asset class and whether its market drivers have fundamentally
03:55changed over time.
03:56But my question now is, has Bitcoin reached a stage where its price is increasingly influenced by a global macroeconomic
04:03forces rather than crypto-native events?
04:05And if so, should investors start analysing Bitcoin more like a traditional financial asset than a speculative digital token?
04:13Yeah, I definitely hope so.
04:15And then if we want to draw like a line in the sand, it was perhaps the launch of the
04:19Bitcoin ETFs a couple of years ago when Bitcoin ETFs started coming to the mainstream.
04:24And then we saw major, major fund managers such as Grayscale, BlackRock and so on start adopting Bitcoin ETFs.
04:29So I think that moment we realised that Bitcoin is not just a speculative retail interest kind of asset.
04:36However, I would want to say that it has crossed over into mainstream.
04:40It has to be considered as a serious asset class now.
04:44And indeed, we know that the institutional participation has actually certainly become a much bigger part of the conversation over
04:51the past few years.
04:52So if Bitcoin is increasingly behaving like a macro asset, has institutional adoption fundamentally changed the way investors should think
05:01about it?
05:02Or does its volatility still upweigh its investment case?
05:05Aaron?
05:06Yeah, I've always believed that it has Bitcoin, digital assets, it has its position in a portfolio.
05:12And I think we have to understand it, you know, everyone has different risk appetite, everyone has different durations for
05:20investment and so on.
05:21So I believe in a portfolio that you can allocate a certain percentage, perhaps into digital assets, Bitcoin and so
05:27on.
05:28And of course, every investor has to consider what's relevant and what's suitable for them.
05:32But that's, I think, the healthiest way to look at it, because, you know, the volatility is going to be
05:38there for new assets.
05:39And, you know, you almost want to think of volatility as a feature, because volatility does mean also the potential
05:46for enhanced gains or rather very aggressive gains.
05:49The downside of that is, of course, in the bear market, then you start to see that, you know, you
05:52can also drop a lot.
05:53So I'd like to think about it, you know, in a sort of healthy portfolio allocation kind of perspective.
05:58Interesting perspective.
06:00But let's bring the conversation towards closer to home for markets like Malaysia, where digital asset regulations continue to evolve.
06:08What actually impact could a renewed global crypto rally have on local investor participation and also towards the broader digital
06:15asset ecosystem?
06:17Yeah, definitely. We've been very, very encouraged.
06:20If you actually look at the local regulators, for example, the Bank Negara and Securities Commission, there's actually a lot,
06:26a lot, a lot of innovation and opportunity in the world of digital assets.
06:30So, for example, Bank Negara has their digital asset innovation hub.
06:34Now, this may not be directly tied to Bitcoin or cryptocurrencies, but definitely the wider family of digital assets.
06:41So Bank Negara is definitely making the right moves here.
06:43Securities Commission also has their sandbox.
06:45They have enhanced regulations for in terms of token listings.
06:49And, you know, everyone is very, very supportive of innovation, such as tokenization and so on.
06:54So that itself is very, very encouraging.
06:56And we've had so many conversations with institutions here in Malaysia.
07:01Many, many people are looking at the derails behind digital assets.
07:05Now, how can they be used to enhance the local systems, the local financial systems and so on?
07:12So I think that's from the perspective of the rails and the innovations.
07:16And if you talk just specifically in terms of cryptocurrencies, cryptocurrencies themselves, I think some of the very, very interesting
07:24moves are coming from overseas.
07:26For example, we've been waiting a long time for the U.S. on the Clarity Act and so on.
07:31So I think if that comes out sometime early this year or towards the early part of the second half
07:37of the year, I think that's going to drive more interest as well in broader digital assets and crypto.
07:42Aaron, many retail investors suffer from fear of missing out of FOMO whenever Bitcoin reaches new highs.
07:48So from a risk management perspective, what distinguishes a discipline, long-term investment strategy from just simply chasing the market
07:56momentum?
07:58Yeah, it's always tough, right?
07:59Because as an individual, you see something go up and then you're like, oh, well, this could even go up
08:03much, much further.
08:04But I think investing in digital assets, crypto is not very, very much different from investing in traditional assets.
08:12It might move faster.
08:13The volatility might be faster.
08:15But the principles are going to be the same, right?
08:17You want to look at, number one, portfolio allocation.
08:20Does this asset make sense in your portfolio?
08:22You want to look at, you know, should you buy now or should you dollar cost average as in average
08:28in your buying in?
08:29And then you want to definitely be disciplined, right?
08:31You're not just like buying at a women fancy.
08:34You want to have proper entry points.
08:37You want to have proper exit points and so on.
08:38So I wouldn't say that it is very, very much different from investing in other asset classes.
08:43But perhaps, you know, the control, the discipline has to be better and you have to better manage the volatility.
08:50Just an outlook, looking ahead, what are the biggest catalysts that could determine Bitcoin's trajectory over the next perhaps six
08:57to 12 months?
08:58And conversely, what risk could derail this momentum despite the current optimism?
09:04Yeah, definitely.
09:05As we mentioned earlier, I think interest rate cuts, you know, everyone's watching what the U.S. Fed is doing.
09:10So depending on how accommodative or how aggressive they want to be, that's going to affect the amount of liquidity
09:16in the market, which will affect risk assets like Bitcoin, digital assets.
09:21If we also look at the Clarity Act, that's what we mentioned earlier.
09:26If the Clarity Act comes out quite early in the U.S., that could drive a lot more interest into
09:30both institutions and retail.
09:32So that's quite interesting to look out for.
09:34If you talk in terms of risk, you can't avoid the conversation around conflicts.
09:39So definitely conflicts in the Middle East.
09:41If there's an escalation there, I think we're going to see difficulty not just in Bitcoin and crypto, but also
09:47all the markets.
09:47So I think even overnight, past one, two days, you saw we reclaimed $66,000, but overnight we're back down
09:55to about $64,000, $65,000.
09:57So, yeah, I think conflict is, you know, you can't avoid it because macro is going to affect everything at
10:02the moment.
10:03Aaron, before we conclude, let's address a question many investors are asking as Bitcoin approaches the key resistance levels.
10:09If Bitcoin were to move significantly higher from the current levels right now, what indicators should investors monitor to actually
10:15determine whether the rally remains healthy and sustainable rather than just entering a bubble territory?
10:23Yeah, I think a couple of interesting metrics.
10:26So definitely on-chain, what we call it on-chain because it's publicly traceable.
10:32So you can look at the amount of wallet activity that's happening in the Bitcoin crypto space.
10:38So, for example, you can see the amount of long-term investors holding, buying and holding, or are people doing
10:44a lot of volumes or transactions and so on.
10:46So that could be one interest metric for investors to look out for.
10:50You can also look out for ETF fund inflow.
10:53So there's so many Bitcoin ETFs, so many crypto ETFs out there in the world.
10:57So the amount of funds flowing in and out of ETFs, that will also give you a gauge into institutional
11:04and also retail adoption and participation.
11:07And I think also, you know, something that we mentioned earlier, it's around the liquidity considerations around interest rates and
11:17so on.
11:17So if the US Fed and the central banks globally are more interested in supporting the economy and allowing more
11:27liquidity in the system,
11:28then I think that also implies that there should be more action in the capital markets and the risk markets.
11:34So I think these are some of the things that investors can look out for.
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