Bitcoin Holds at $77K as Andy Baehr’s ‘Conviction Gauge’ Signals Cautious Crypto Sentiment

Joining me this morning to weigh in is Andy Baehr, Managing Director of Asset Management at GSR.

Andy, good morning.

Welcome.

Thank you so much for joining us.

Yes, as you put it, hovering, we've been hovering here for a long time and I feel like I'm using very similar talking points.

Bitcoin in the high 77 or the high 70s, Ethereum around 2100, Salon around 85 bucks.

And so we kind of wanted to do an update of the kind of measures that we look at at GSR.

To sort of categorize or at least measure the energy or lack thereof, the conviction lack thereof.

So the first thing that we're going to show is the conviction gauge that we kind of conceived of earlier this year in late February when it felt like the market just was ambivalent, right?

And we measure this by basically how long daily trends become weekly trends and how long those weekly trends actually make progress.

So if you This feeling of a lot of daily volatility or a lot of daily chop, but not much progress.

It can be a very frustrating market for investors and for traders.

Towards the earlier part of this quarter that was at a real, real kind of local low.

It seems to have recovered a little bit.

It's still below this line where we would say that markets have conviction versus ambivalence, but it looks like it's recovering.

But here's the problem.

If you look at the second chart.

This recovery from sort of max ambivalence, it's going to be a tricky chart, but it's been joined by very low volatility.

When people think about volatility in equities, it usually is a sign of fear or a sign of meltdown.

Volatility in crypto is really important because it really is a great measure of energy, of activity, of trading.

Very few people really deeply need to.

Hedge their crypto exposure.

If there's going to be volatility, it's just going to reflect trading activity.

You'll see it in higher funding rates.

You'll see it in higher GI funding rates.

You'll just see it in greater volume and all of that is pulled back.

So this very, very complicated chart, you kind of have to follow the line from the light green, which was 3 months ago, into the dark purple, which is today.

Up is higher volatility, which is good.

Down is lower volatility, and then you have conviction along the bottom, which was our chart from before.

And you see that while we have regained a little bit of conviction, it's coming with really, really low volatility, and that just marks the kind of lack of energy in the market.

We thought a couple of weeks ago at consensus that we were going to climb out of that, but again, that rally kind of failed, and we're back in this state.

And I'm glad you made that distinction and that comparison regarding volatility equity markets versus what happens in the crypto markets and it's hard to believe that it is almost Memorial Day here in the US and that does mean that the first half of 2026 is almost over.

So what do you think it will actually take now that you talked about conviction as well as a volatility where the necessary energy. from the catalyst people, I think, continue to hunt for catalyst progress on the Clarity Act.

There's not much to like about the interest rate picture and the inflation picture in terms of easing monetary conditions.

We're looking at funding rates which have recovered from really a negative state to a more neutral state, but still that's not very exciting.

Volatility levels, volume levels.

We're also kind of, as you pointed out, about halfway through the 2nd quarter.

And you know, crypto does kind of have a little bit of quarterly seasonality which unfortunately doesn't tend to improve towards the end of the quarter, so we're not finding much luck there.

In fact, you know, one of the ways we mention every Wednesday we publish the weights of our core three portfolio.

So those came out yesterday and the most remarkable thing is that the Bitcoin weight went from about 13% to a little over 50%.

That's a pretty massive shift and that is pretty defensive.

So I wish we had more good news right now.

Long term and medium term theses remain intact and in place.

Adoption continues, but right now we really don't see anything that's going to kind of yank the market out of its hovering state and bring it back into a more excited state like we were seeing at this time last year.

And finally, before we wrap it up, Andy, I do want to ask you about how vulnerable the current market structure is.

You know, it's been pretty resilient.

We've had geopolitical events.

We've had different types of equity markets.

We have a VIX around 18 right now, which is not.

Predictable of a little bit more than 1% move every day, which is 75 S&P handles, that's a pretty big day.

So the fix is not in a super calm state.

We've had energy prices and being very volatile and interest rates that the 30 years, as you said, over 5%.

In one way we should be kind of gratified that Bitcoin is holding and that Ether and Solana are holding.

We kind of want more than that and we're kind of getting a bit bored with the state of hovering, but at the same time that's been pretty impressive resilience.

So for long term investors, I think.

We hope that they can come to expect a little bit less downside volatility reacting to other market conditions.

We would also like to see some upside volatility which would reflect greater activity.

And less than 60 seconds here, but you have been across the pond in addition to coming off of consensus 2026 in Miami.

So give us a sense of the differences in temperature on this side of the Atlantic versus abroad.

Yes, I think compared to certainly a couple of years ago, boy has the US come a long way, and it's super exciting to think about that.

People aren't coming to New York just for events.

They are working here.

They're setting up offices here.

Our little area, which is kind of the nomad area of Manhattan, is becoming kind of the new crypto central.

There's a lot of companies around there.

So the US has really taken a leadership position, and a lot of that capital is going to work both in new projects and.

The adoption from some of the tradpi players in here.

So New York's been great.

London, there's still a decent amount of activity.

There's still a lot of regulatory headwinds down there, and Asia has always has its own flavor, but now it has a pretty strong competitive region to keep up with.

Well, Andy, always great talking to you.

Thank you so much for joining us here at the New York Stock Exchange this morning and thank you so much for sharing all of your insights.

Thanks, Remy.

Thank you.