Bitcoin falls after weekend rally sees crypto top $61K

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Decrypt Editor-in-Chief Dan Roberts joins the Yahoo Finance Live panel to break down bitcoin’s wild moves.

Video Transcript

SEANA SMITH: But we want to talk about crypto, because it has been the topic that I know a lot of our viewers have been closely watching over the last several months. It was trending once again over the weekend with Bitcoin crossing above $61,000. We’re seeing some selling action today in Bitcoin, but here to help us break all this down, we want to welcome back in Dan Roberts, Yahoo Finance alum.

Now, he is editor-in-chief of “Decrypt.” And, Dan, it’s great to see you once again. But help us make sense of what’s going on in Bitcoin and, of course, at large, the broader crypto market, because I know there is a lot to discuss. But at least when it comes to Bitcoin, we’re seeing it pull back a bit today, right around $56,000– what’s your assessment of the recent action that we’ve seen?

DAN ROBERTS: Well, great to see you guys again. And I’d start by saying, this is what Bitcoin does, right? We see it hit certain new highs, and then we talk about resistance levels, resistance bands. We saw that $60,000 mark over the weekend for the first time, and then quickly it got to $61,000. Now you have a pullback.

And in many ways, people expected a pullback. We’re already starting to see activity again tick up on exchanges. There is interesting data just out within the last two hours from Glass Node about the idea that probably we’re going to start to see it tick back up and not fall below $50,000. But, look, we saw the same kind of resistance band back when Bitcoin– well, I say, back when, it wasn’t that long ago– hit $40,000 for the first time and then $45,000.

It hits certain mental milestones, and then it retreats a little bit as people do some profit-taking. Now, I’d also point to the fact that we had some news out of India today. The regulators there haven’t actually said anything new other than, sources told “Reuters” that a ban on crypto-mining in India is imminent. Now, the expectations around some kind of crypto ban in India have been there for months, and we’ve been reporting on it at “Decrypt.”

And it’s also worth mentioning that the financial regulator there also cautioned that there will soon be an experimentation period. So a lot of people will tell you that India isn’t likely to be about to ban crypto-mining, but I think that that news didn’t help today with the pullback in Bitcoin. Of course, there’s also the explosion in the NFT market and some irrational exuberance there– those digital blockchain collectibles.

ADAM SHAPIRO: Yeah, we’ll talk with you one day about NFT, but I want to talk about Bitcoin. Because in discussions with you in the past, you talked about how it really was legitimate perhaps store of value. And there was an article this weekend that said people may be shunning gold to protect the asset gains they’ve had via Bitcoin. Now gold is up, but Bitcoin clearly– you can do more with Bitcoin, actually, in this world then you can do if you hold gold.

So is the argument that Bitcoin is just a fad, or that as a store of value, it really doesn’t have any? That really should be dismissed or not?

DAN ROBERTS: Well, it’s interesting, Adam. It depends who you ask. I guess I would mention that just last week at “Decrypt,” we spoke to Mark Cuban, and I thought he framed things in interesting terms. He said, arguably, all these people out there who see gold as a store of value, the only reason they do is because they’ve bought into a certain narrative. The narrative around gold is it’s a real thing, it’s a hard asset, we use it in jewelry.

Even if you buy a little bit of a gold ETF on an exchange, you know that somewhere, there are gold bars sitting in a vault and that you own some amount. Bitcoin is purely digital, but it’s the same thing. It’s just narrative. It only has value because a large group of people have decided it has value. They’ve bought into the narrative.

So those who like gold, on one hand, say gold bugs, and those who have dismissed Bitcoin and say it isn’t digital gold, they merely haven’t passed that hurdle of understanding or believing that it has value even though it’s purely digital. And I think the thing that’s happening, Adam and Seana, is that value is moving digital in a lot of examples. We don’t have to get into NFTs, another time, but same kind of example.

And so more and more people are buying into the digital gold narrative for Bitcoin. What that really means, though, does anyone want to spend it? I mean, Tesla came out and said, we’re going to allow people to pay in Bitcoin. I don’t think right now anyone wants to spend their Bitcoin. They want to hold on to it and hoard it.

SEANA SMITH: And, Dan, we need to talk about NFT at another time, because that whole thing is crazy in itself. But real quick, just following up there, and it’s something you and I have talked about a bunch in the past, and that is this interest here with Bitcoin and how the recent run-up was to do with the fact that institutional, corporate investors were getting involved this time around. Do you think that still holds true, or is a lot of the action that we’ve seen, at least lately, more speculative in nature?

DAN ROBERTS: Yeah, I’m glad you said that. I mean, this run-up that started amid the pandemic, everyone kept saying it’s institutional-driven, it’s institutions. Well, yes and no. First of all, it’s not just the institutions we usually mean, right– Wall Street hedge funds, and investing firms, and kind of sophisticated investors. But it’s also been publicly-traded companies buying Bitcoin for their balance sheet, those institutions.

And also now that it has continued, it’s not just institutional. It’s also retail investors again. Its regular people buying in. It’s kind of a perfect storm of multiple narratives– I keep mentioning how narrative-driven this space is– converging at once. Now, you talk about the buy-in here by institutions, though, and are they really holding on. If you look at the stats right now, a smaller number of Bitcoin is in circulation for trading than ever before.

And that does suggest that you have long-term buyers– some of those are whales, big, rich individuals, some are firms that are holding on for a longer period of time. They’ve taken their holdings off exchange, and that does suggest a belief in the digital gold, the store of value.

SEANA SMITH: Dan Roberts, always great to see you. We will talk to you again soon. Thanks so much for hopping back on Yahoo Finance with us.

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