Mm.
Well, Bitcoin and major altcoins are trying to bounce back this week after a sharp drop sparked by last Friday's weak US jobs report, the disappointing July non-farm payrolls and steep downward revisions of 258,000 for May and June.
Non-farm payrolls rattled investors and did trigger a broader risk-off move.
Now we're seeing some signs of caution. buying as traders dip back into crypto.
White House and SEC are calling for clear crypto legislation and immediate federal trading access, marking a major policy shift under new SEC Chair Paul Atkins, and corporate crypto treasuries are surging with firms like Strategy, 21 Capital, and Meta Plant adding billions to their balance sheet.
Well, joining me this morning.
Patrick Liu, who's the director of institutional at Gemini.
Patrick, great to have you back.
Thank you so much for joining me.
Thanks for having me, Rey.
Well, we have been seeing quite the trading action across all asset classes, but we're here to focus on crypto.
So what do you make of what we're seeing in Bitcoin as well as the other coins, especially on the heels of that volatility last Friday?
Yeah, sure.
So Bitcoin is off its eyes a little bit off of like the 120,000 level.
It dipped to 112,000 over the weekend, primarily driven by macro factors as you mentioned at the top of the segments with the poor jobs numbers as well as revisions of previous reports, maybe signs of, you know, the US economy not being as strong as some would hope or like, but you know, I think if you zoom out a little bit.
July, the end of July recorded Bitcoin's highest monthly close ever, so you know, any sort of pull back, I think, you know, a little dip is healthy and corrective in nature.
Yeah, and what you mentioned on the macro front, there's a lot going on, and it's hard to separate politics from what's happening in terms of Wall Street, but as we keep our eyes on legislation for crypto, since the last time you're here, the Genius Act has been passed into law.
So what's next here?
Yeah, so it was interesting.
I think the last time I was here, you were asking me what do I expect in terms of timing and explicit legislation that happens, and at the time I said I don't know yet, but it seems like they're going to put on the agenda and anything from the Genius Act, Clarity Act, those are all things you know the Genius Act has been passed and the genius.
Or the Clarity Act is currently in the Senate for consideration right now.
One thing that we've been keeping an eye out on is the new SEC administration.
So the new chair Paul Atkins had a speech last week called Project Crypto, which really was a complete 180 when you compare it to the tone, the language and the wording.
Um, from the previous administration, right, so the Howie test is something that has been used commonly as it applies to securities laws for digital assets.
That's something that was used for oranges and orange groves back in the 1940s, right, and the new Chair Atkins clearly stated that that is probably an outdated framework for considering digital assets.
So it's been encouraging to see how that How that shift in attitude will really give confidence for the industry to allow for further innovation and growth, um, and you know, as a, as a parallel, I guess, I know you had the CFTC chair on yesterday.
And you know she's been very pro crypto, so I think we're seeing a few different streams, whether it's Congress, whether it's regulatory agencies, or the White House itself really kind of willing to partner and listen to industry advocates to usher in this new wave of adoption.
And Patrick, while I have you here, I do want to ask you about corporate balance sheets and crypto.
It's not just Bitcoin anymore, it's also other crypto as well.
But what do you think of this?
Do you think this is a gamble?
Yeah, I think inherently it's it's interesting to see like if we back up, it probably started with Microstrategy, Michael Saler adding Bitcoin to its balance sheet, right, saying you know fiat debasements, shifting corporate profits into Bitcoin is the countermeasure against that and you see some of these stocks trading.
Be quite a premium over their net asset value, which doesn't necessarily make sense, but you know as a proxy and for Bitcoin and crypto assets, other companies are taking note of this.
So you have some people that are deploying the same strategy in Bitcoin that's expanded to Ethereum, Solana, Hype, Ton, B&B, etc.
I think it'll be interesting to see with how these raises go.
A lot of it is through pipe um investments in private companies turning into public and there's generally lockup periods for investors, so we'll have to see, you know, as stocks kind of.
Do the initial rally, how it kind of trades over time and be paying attention to the lockup dates as they come through.
And finally, Patrick, before I let you go, I do want to squeeze this question in.
So the SEC approved in-kind ETF trades.
Do you think this will be a game changer when it comes to institutional access?
Yeah, so I think the main thing like the TLDR is it makes it easier for everybody.
Like traditional ETFs have in kinds, right?
One thing is before if you had Bitcoin on a low cost basis to do it through a cash creation that might have been considered a realized tax event.
I'm not I'm not an accountant, but that's what some people take into account.
With this, this allows for that with some of the workflows with authorized participants, market makers, issuers, digital asset custodians like Gemini that also creates more efficiencies in the workflow.
So we'll see how that goes and I'll just add one thing about SEC and how they're considering crypto.
Um, you know, there's other digital asset ETFs that are being considered active S1 reviews, right, staking may be a component of some of this.
So those are all kinds of things that I'm keeping an eye out for.
OK, Patrick, well, always great having you here on the show, and as always, thank you so much for the TLDR as well.
Thank you, Patrick.
