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- [00:00]
Unknown Speaker
In the time it takes you to actually board a flight from Group 8.
- [00:03]
Andy Baer
Now boarding Premier Altitude Elite Club members.
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Unknown Speaker
You could have bought a Hyundai on Amazon. Visit HyundaiUSA.com or call 562-314-4603 for more details. Limited availability pick up through participating Hyundai dealer and select markets.
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Jen Senassi
Hey everyone, I'm Jen Senassi.
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Andy Baer
And I'm Andy Baer and this is.
- [00:19]
Jen Senassi
Your weekly markets roundup where we are going to chat about some of the most significant moments in the crypto markets this week. Andy, happy Thursday. Happy long weekend. Now the beginning of the second half of the year gives us an opportunity to reflect on what happened in the first half of the year. Talk about where we might be heading into the second half of the year. But I want to start here. Bitcoin in my words has been kind of boring and I think in your words you would say it's range bound and maturing and so talk to me about what you're watching, what's going on.
- [00:53]
Andy Baer
With the question is are we range bound and maturing, Jen, not just bitcoin.
- [00:57]
Jen Senassi
I don't know if we are but bitcoin might be.
- [00:59]
Andy Baer
I feel pretty range bound and maturing. You know, except for the one day where we had the military event with Iran, Bitcoin has observed this 10% range that, that, that we've been watching very carefully. It's been a longer 10% steady range except for that one day than many periods in history. And in a way that's a good thing, right? So I think it's giving people a little bit of comfort but at the same time it, you know, for traders it's, it can be frustrating for options traders who are buying options these, this constrained environment means that they're probably kind of watching their options premium bleed away. When we see this happen, this kind of thing happen in other asset classes when the asset eventually exits the range it can be a little bit violent, right because the market has gotten too complacent about the range holding. So on the one hand it's been great with all the stuff that's going on with the economy and the tariffs and geopolitical stuff and interest rate stuff for bitcoin to hold 101 to 111 has been marvelous. But I think what we would all like to see and what we hope takes place is that when we exit, hopefully in the upside, that it's an orderly exit into new all time highs and you know, in a way that's, that doesn't, you know, cause too much.
- [02:17]
Jen Senassi
Surprise well, it is quite phenomenal that you, you bring up this point, Andy. It is quite phenomenal that Bitcoin has remained above 100,000 despite everything that's happening on a macroeconomic scale. But I mean The S&P 500 recently reached all time highs. Gold is also very close to its all time high. This is not only a bitcoin story, I feel.
- [02:39]
Andy Baer
That's right. I get a little bit nervous that we lose control of narrative here. You know, we started the year, think about where we started the year before, after the election, before the inauguration, where we had a lot of national support and airtime given to digital assets and we had all this regulatory reform and change of regulators to look forward to. And Ethereum was, you know, got close to, got above 4,000 in November. Coin S20 index was over 4,000, you know, into December. We had great breadth in participation. And then actually pretty much since inauguration day everything kind of, you know, fell like a, like a souffle in a dance studio. Right? It just kind of everything just fell. Only three constituents of the CoinDesk 20 are up on the year. The CoinDesk 5 index is up on the yearbook. Coin Desk 20 is still struggling to get back to break even. And it's been all about Bitcoin, about Bitcoin inflows, about bitcoin owning the narrative and other even major digital assets have kind of failed to keep pace and failed to keep energy. And that's, that's kind of a little bit a disappointment to those who want to see a more vibrant market with better participation and more breadth.
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Jen Senassi
You know, we're talking about narratives and for such a long time it's always been Bitcoin and eth, Bitcoin and eth, the gold and silver of the digital asset world. And we're going to talk to our guest a little bit later in the show about some observations when it comes to, to eth. But I'm curious to hear from you. You know, we're talking about narrative. ETH has kind of fallen away from, from the narrative when we're talking about digital assets.
- [04:24]
Andy Baer
It sure has. And it's almost hard to imagine that ETH that ether cracked 4,000 back in November on the hopes that the rally or the support for digital assets would extend beyond Bitcoin, which by the way didn't need a lot more regulatory certainty. It already had a futures market, ETFs, options, you know, and, and availability in the primitive in the United States. So. But the hope was that layer ones and defi protocols and service Providers and all these other great, you know, kind of crypto assets would, would enjoy a better opportunity to, to raise capital, to operate, to serve and to be traded in the United States. And ether was at the head of the list, despite its, I guess, being a little bit stuck in the mud with respect to its own identity and its own strategy. Since the beginning of the year. We got right back down to the 1700s until the end of April when according to some folks, we had just a giant short squeeze that, that gave it kind of a very sudden 50% pump. And now we're left back at 24, 25, 2600 for ETH in that kind of range. So it seems a little arbitrary and sudden. We're glad to see some investor interest, we're glad to see some price action and some inflows into ETFs. Can't wait to talk to our guests later about how that's affecting the futures markets and the basis trade for eth. So I think we're hopeful it's the second biggest, as you said, and it is a big feature in many of our index products. We think that it has to kind of lead the way outside of Bitcoin for investors to think more broadly.
- [06:09]
Jen Senassi
All right, we're sitting in the summer months now at the beginning of July, second half of the year. What are you watching out for? You know, there are some trends that have remained true for years past that seem to be changing a little bit now. Talk to me about what you're looking out for. How do you expect the next half of the year to go?
- [06:30]
Andy Baer
Yeah, last two summers were kind of brutal, right? The summer of 2023 where we had a lot of lawsuits coming in, going out, uncertainty about ETF regulation. Summer of 2024 was the sideways summer where we had election concerns, we had Federal Reserve behavior concerns, we had people patiently waiting for the Fed to cut rates. And Bitcoin, if you remember, was, was heading down between, you know, low 60s, high 50s, mid 50,000 level just, you know, just a year ago. So this summer we are again in a position where we have what we have concerns about Fed policy, we have concerns about inflation, we have tariffs to think about, we have some residual geopolitical concerns left over. We don't really have a natural catalyst for people to start piling and people don't need a reason to take Bitcoin to new all time highs or to 150,000. But when, where, why remain a little bit, a little bit mysterious. Same is true for other digital assets. So I think the Concern would be we continue to trade in a range or trade kind of flat and lose control of narrative and lose narrative momentum. I think that adoption momentum will continue. We just have to see if we can get enough price activity to maintain control of the narrative dialogue for new investors to come in.
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Jen Senassi
Well, let's talk about that. Andy, you set me up to head into our next story now. And this is one of the big stories. I know you and I spoke at the Injective Summit about corporate treasuries. Corporate treasuries. It feels like every day we get a new story about another corporate treasury. And they are so serious corporate treasuries. One of the big ones this week was Michael Saylor's strategy buying 4,980 bitcoin, adding that to its stash. I think this is bringing its holdings to almost 600, 000 coins. I have the number here, 597, 325 coins now sitting on the strategy balance sheet. Curious how you're watching this, right? We're watching the price of bitcoin trade in this very tight range. But every day we're hearing about another corporation buying up bitcoin, holding onto another balance sheet. Connect the dots for me there.
- [08:54]
Andy Baer
Well, fundamentally, I think it makes sense for companies to think creatively about how they store their unused cash. I think as an adoption angle or as an allocation to Bitcoin or to, or to digital assets more broadly. I think it's a healthy thing and I, I applaud that some companies are looking into it. If some companies wanted to say, you know what, instead of holding T bills or money market instruments, I want to invest in an equity portfolio or a commodity portfolio. Just because I like that risk profile. I'm going to think more like a steward of these assets rather than just having them be immediately, you know, zero volatility and cash ready. I think that that's, you know, that's an interesting way to handle financing. Look, but at the same time, it's also topical and popular. Right? And so headline, doesn't it, it makes for a great headline. And to the extent that folks and I know, you know, we have a CoinDesk story about, about Anthony Scaramucci kind of pointing out that to the extent that people start to buy into these companies, into the momentum and end up buying those treasury assets at a multiple of where they could buy them independently, you know that that kind of has that familiar frothiness that sometimes causes people concern and that rarely is sustainable. So on the one hand, it's a Great way for treasury companies to try to exert their creativity and independence and open mindedness with respect to how they fund and invest those pockets of money. But of course, you know, when things get ahead of themselves, they usually float, float back to earth. On the topic of strategy, I know we're going to, you know, mention this later, I can't wait to talk to our guest about this. But as bitcoin volatility comes down, not only does that make this kind of perceived upside of holding these companies as, you know, as access vehicles to bitcoin or other digital assets quiet down, but also it does affect some of the financing strategies which relate to convertible bonds which are volatility linked instruments.
- [11:11]
Jen Senassi
Yeah. On that Scaramucci story, he said that he thinks this crypto treasury company trend is going to fade away. And like you said Andy, he said why would people pay a premium for a company to hold an asset that they could own outright? This is a similar statement that was made to me in an interview I did with Kevin O', Leary. But he was talking about ETFs, like, curious to hear your thought there. Right. There's this treasury version versus ETF narrative. Why hold ETF or a Treasury company when you can hold the coins outright?
- [11:45]
Andy Baer
I am a firm believer that people buy certain things because they think they will be able to sell them to somebody else at a higher price later on. And very often that investment process departs from fundamental valuation or substitutes. And you can look at meme coins or NFTs and, and see the same behavior. And some may look at that and say that's gambling or that's speculative. But like, I don't believe that. I think that, I mean the personal view, not a view of CoinDesk Indices or, or CoinDesk or the company. But look, a lot of trading is based on, on cognitive biases and, and emotion and sentiment. And if anything, Michael Saylor is a self, is a confessed kind of evangelist for what he is trying to do and is out. And his company has had periods of vastly outperforming the bitcoin that it holds and the other properties that the strategy business does. And so you can look at that and dismiss it as being frivolous or you can just say, well I'm sorry but there are billions of dollars pointing that direction and it's a NASDAQ 100 company now. And you know, you can be right or you can be smart or you can be rich. You know, pick one of the three. So it's a fact of life that people are going to trade things at at levels that depart from their fundamental valuation as a long term hold. To expect that premium to maintain itself forever, that's a little bit different. And I think people have to be super careful.
- [13:27]
Jen Senassi
I buy things and hold them forever. It's turned out to be a horrible strategy for me. But one day, Andy, I hope that this is going to work out.
- [13:37]
Unknown Speaker
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- [14:07]
Jen Senassi
Com.