Bitcoin Breaks New Ground: Analyzing the $112,000 Milestone

Let's get to the big story breakdown.

So much for swimming sideways.

Bitcoin breaking out of its recent range and rallying to new all-time highs.

The crypto major clearing 112,000.

Now just three work weeks left before summer recess and Congress has designated the week of July 14th as cryptoweek.

Lawmakers will be reviewing three key bills, including the Genius Act, the Clarity Act, and the anti-CBDC.

Joining me to weigh in is Andy Beer, head of product and research at Coin Desk Industries.

Andy, great to have you here.

Thank you so much for joining me.

Good morning.

Yeah, we thought we were just going to have another sideways summer, and then yesterday we kind of grazed this all-time high above 112,000.

So this is great news.

It's going to catch a lot of eyeballs.

I think we want to be a little careful.

We're back a little bit below 111,000 and that trading range that we had been observing.

Since May 7th of 101,500 to 1,115,000 close to close, that's pretty much held for all but the day that the US had the military incursion into Iran.

So I think we'd like to see a little bit more conviction that we've actually exited this trading range.

Yeah, and I think conviction is key moving forward here, Andy.

So tell us what you're seeing under the hood when it comes to breath as well as some of the finer details.

Yeah, usually when I see a trading range like this, I will immediately want to go talk to options traders, right, because they're the ones who are putting on the tactical trades.

They're the ones who are looking at the calendar, looking at volatility levels and looking at basis.

And in a conversation yesterday with a major options trader, basically everybody is selling options.

They want to collect yields.

Everybody is kind of making the bet that we're going to stay in this range, that we're not going to dive below, we're not going to dive above.

And that's been predominant.

So implied volatility levels are at the lowest of this year.

Similarly, basis, the degree to which people are willing to pay a little bit more for leverage in the perpetual futures or the traditional futures markets are also pretty low.

So people seem to be staying pretty close to shore, accepting the fact that Bitcoin treasury companies and ETFs are on the buy side.

Long term holders have been providing supply.

And I think it's also a good time to take a look at what's happening across crypto, in particular with ET as well as altcoins, not to mention the Coin desk 20 index.

So what's happening there?

It's a surprise, right, because usually we need this breadth of a rally to follow.

Bitcoin rally, but I've noticed that over the last 7 days.

I just checked this morning, 19 out of the 20 coin desk 20 names are up over that 7 day period.

In fact, Bitcoin is at number 19 on that leaderboard.

AFS is the only one who hasn't caught up.

So Coin desk 20 is up 5% on the week.

It's interesting.

There's two ways to interpret that breath.

The positive way is that Bitcoin is kind of doing its own thing as a Treasury asset as a long-term store of value holding with ETFs, and that growth crypto is sort of catching a tailwind with the events in Washington DC next week and general thoughts about better crypto growth, stablecoins, things like that.

I think the more negative interpretation is that this is kind of a bounce and a catch up, so we'll have to see more evidence of this kind of trend continuing, but of course there's nothing that we like better than seeing breadth in the crypto markets.

Yeah, and when we take a step back and look at what's happening in addition to that, crypto week is coming up in DC, and it's going to be a big week next week, not just for crypto, but also from a macro perspective given all the inflation figures as well as earnings season kicking off next week.

So amidst all the noise ahead of next week, what do you focus on?

So one thing I noticed actually, you know, again with that trader conversation is a lot of the speculative.

Capital is migratory.

So when the circle equity gets really exciting to look at some of that speculative money will exit crypto and go chase stocks, right?

So the idea of tokenized stocks is going to provide an interesting, I guess, competition for native digital tokens.

That being said, the medium term growth story for Blockchain assets, especially with things like tokenized money market funds with stablecoins with new uses of blockchain, looks better than ever, and regulatory support seems to be coming.

We were saying earlier, we always have to be patient. crypto is a patience game, but it seems to be eventually coming, so that that market looks better than ever.

The stability of Bitcoin looks great.

Over the next couple of weeks, we hope that, I guess the macro environment will continue to support Bitcoin holding its position here, if not going higher.

And let's see what happens to E.

It seems to be on a positive tear ever since that kind of short squeeze back in early May.

And we have less than 60 seconds here.

So Andy, you mentioned Eth and we are watching it creep higher.

We're obviously well off last year's all-time highs, but given that it is creeping higher, what are you expecting to see?

And what about Catalyst here?

So investors love yield.ethers.

We have a benchmark for ether's staking rate, and that benchmark has been hovering in the low 3%.

So first of all, ETF having availability to ether's staking yield, right, this is the yield that ether holders are eligible to receive if they help to secure the network to receive that extra 3%.

It's an interesting add on to an ETF, so that doesn't have regulatory approval yet, but we're all waiting for that.

For people who are looking to just hold Eth and get that extra 3% even if they're doing it outright or against futurist position, that looks interesting too.

And the narrative with the Ethereum Foundation, they seem to be kind of getting it together in terms of having a more positive and constructive message for what they're doing plus stable.

So we're starting to ETA is starting to find its way.

We would love to see that for ether and all other layer ones.

So we'll have to keep looking, but right now since I guess late April, the trend looks pretty positive.

OK, Andy, always great talking to you.

Thank you so much for joining me here as Bitcoin hit a new record high.

Thank you very much.