They just graduated.
Let's get to the big story.
Breakdown while in New York morning trade.
We are looking at the coin holding below the 64,000 level after falling to 61,351 overnight.
Now as everyday investors are being drawn to fresh IPO launches and AI stocks, we're continuing to monitor what's happening in crypto and US ETF investors are also feeling the squeeze as trading volatility returns and also new sector platforms are capturing attention by focus entirely on fundamentals.
Well joining us here.
At the New York Stock Exchange to weigh in on what's moving, crypto markets this morning is Andy Baehr, Managing Director of Asset Management at GSR.
Andy, good morning.
Thank you so much for joining me today.
Good morning.
You're going to have to bear with me a little bit because we're not glad to see the markets kind of flush out like this, but in a way we're super glad to see some volatility and energy restored.
We were in this period of very kind of ambivalent market behavior for many months, several failed rallies, and I think as We were speaking, you were seeing that that was a frustrating situation that had to resolve one way or another.
The next rally over 80,000 for Bitcoin was not going to succeed any better than the previous one, so the market finally resolved.
Now for long investors this is a very painful and kind of shaking kind of move from Bitcoin in its stable position in the high 70s down to pretty close to its its construction cost or its its mining cost of around 60,000.
Um, but in a way we're, we're happy to see, um, we're happy to see volatility come back.
We like to look at our conviction and ambivalence gauge, and we're seeing our first conviction reading, meaning that, uh, daily gains are turning into or daily moves are turning into weekly moves, um.
Can't emphasize enough that this kind of volatility return is important, so down volatility isn't always as fun as up volatility, but like we said a couple of weeks ago, the crypto market needs that energy to power forward, and it really is a necessary ingredient for the next trend higher.
Yes, and speaking of which, Andy, in New York morning trade we're expecting mixed trading for the equity markets when we're talking about the Dow and the Nasdaq, and even when it comes to artificial intelligence, we are seeing downside pressure for Broadcom.
But when we're talking about what's drawing people's attention away from the crypto market, there are a lot of headlines out there including the move from strategy earlier.
This week in terms of the disclosure that Bitcoin got sold.
So when we're talking about rotation and attention, what is happening below the surface?
Well, I think there's two things happening the very short term money, the people who like to trade and kind of get that serotonin hit from making money very quickly has had a ton of distractions, right?
Equities have been volatile.
Commodities have been volatile.
AI names you've had some ramp ups in even in the crypto space names like Hyperliquid, which is a fantastic story.
ETFs are experiencing inflows.
It's a great short term thing to latch onto.
So the short term traders have had a lot of things to distract them away from crypto, and crypto's volatility levels have come down through options activity and just maturation.
So that's one thing.
In the longer term thing, people are saying, well, what's going to grow, and I think it's pretty clear now that blockchain adoption is going to create growth, going to create economic activity, and going to integrate into places like where we're sitting right here.
But that story has been going on for quite a while now, and there have been newer, shinier things which have diverted people away.
That's, I think, part of the reason that crypto majors haven't participated in this last sort of very exuberant equity leg up.
We'll have to see what happens when things settle down.
Back to crypto market dynamics.
Remember, crypto markets trade about 2/3 to 3/4 in derivatives and leveraged products and about 0.25% to 1/3 in spots.
So again, you really need that energy to get things schooled up so that things can move higher.
Yes, and you mentioned new shiny things, and there are plenty on the horizon not to dismiss them.
New shiny things can be great.
And one of those shiny things is hyper liquid here.
So for investors out there who already have their core crypto holdings, how should they be evaluating what's unfolding in hyperliquid?
A friend of mine put it on social media in a nice succinct way.
Would you rather own Bitcoin or the exchange on?
It trades.
Hyperliquid has kind of demonstrated what crypto can be when you take a lot of nice ingredients and the industry grows up and you end up with a delivery mechanism for trading, for trading spot, for trading perpetual futures as a decentralized exchange with easy onboarding, very quick to market products.
S&P licensed the S&P 500 to them and I started watching those futures.
Trade over the weekend for the first time.
Oil futures when oil was very volatile in Q4, Q1, that was there.
So it's making a lot of the right moves to draw people in.
I saw a statistic.
I won't remember the exact numbers, but CME started trading crypto futures over the weekend, and they were trading hyperliquid volume to CME volume.
Of course this is established versus brand new, but you can see that there's a massive amount.
Off there.
US investors can access hyperliquid directly right now, but the rest of the world is a pretty big place.
There's a lot of institutional money offshore which likes this liquidity, so it's a great story.
We don't think of it as a core holding the same way you would think of Bitcoin, Ether, Solana, key blockchains that will power, that will underlie the adoption process.
It's more an application of that, although they have their own blockchain, but it's a very interesting name to watch, and right now it's been bucking the trend.
And finally, Andy, before I let you go, about 60 seconds here.
So given the fact that we're seeing red across the crypto majors this morning, can you address seasonality as we move forward?
Yes, we're, you know, there's seasonality seemingly should be something that should be arbed out of the market, right, if everybody knows it's happening, but there appears to be quarter by quarter, we've noticed this. that the attention span of crypto seems to be in a quarter, then you turn into a new chapter.
That seems to be reflected in the buying and selling patterns of certain market participants.
So as we get closer to the end of the 2nd quarter, that's when you would naturally see things start to pull back a little bit and you'd see some refreshed energy coming into the next quarter.
So it's very behavioral.
I'm not sure.
We can account or we can, you know, call that the major reason that we're having this very sharp move lower right now, but it is in the same direction again.
The best thing that we're seeing now is more volume, more volatility.
It's a relief to see it even if it's in the wrong direction.
Well, Andy, we will continue to monitor the data.
So thank you so much for weighing in today and thank you as always for sharing all of your insights.
Thanks.
Thank you.
