Mm.
Crypto investors pulled back after a Fed fuel rebound.
Over the past 24 hours.
Bitcoin has dipped below 109,000, it's lowest level since July 9th, and ether saw a 13% retracement from its all-time high on Sunday.
Now, despite a market rally following J Powell's dovish tone at Jackson Hole, crypto investment products saw their biggest weekly outflow since March, and Bitcoin funds lost over $8 billion while Eproducts shed about $400.
40 million crypto flows sensitive to macro signals and bigger shifts could be ahead as rate cut expectations build.
Well joining me to weigh in this morning is Juan Leon, senior investment strategist at Bitwise Asset Management.
Well, Juan, great to have you here.
Thank you so much for joining me.
A lot going on in the world of crypto.
So first and foremost, what do recent flows post Powell tell you?
And do you think this is a true shift in sentiment or just positioning around great expectations?
Good morning, Remy.
It's great to be here with you.
We are seeing a bit of a summer end of summer correction, but I think we are just setting ourselves up for a much bigger second half of the year.
If we look at what's happening in the crypto ecosystem, we see.
Lots of momentum with regulation, with institutional interest, and so I think despite what we're seeing in the short term, both Bitcoin and Ethereum are up big year to date, and we think they have strong momentum to continue into the rest of the year.
Yeah, and Juan, just based on what you just said, do you think the market is under pricing regulatory risk in the US or has that already been baked into prices for both Bitcoin and E?
We think the regulatory aspect is not totally priced in.
The Genius Act just was signed into law in July 1st major piece of crypto legislation.
That is fantastic for all crypto assets, but especially if investors are really excited about the Genius Act because it paves the way for stablecoins to become commercially available in the US, and the majority of states.
Coin activity happens on Ethereum and so investors are really excited about this.
Now there's a second big act going through Congress right now, the Clarity Act that has passed in this House and has now moved on to the Senate, and investors are very excited about the prospect of a market-wide market structure regulation bill, and that I don't think is fully priced in since it's still going through the legislative process.
Yeah, and for the retail investor out there who's watching right now and looking at E price action in not just the past say 24 hours, 48 hours, but year to date in a nutshell, what would you tell them is actually unfolding when it comes to eat?
I hit a new all-time high very recently, just this past weekend.
It's retraced a little bit, but it's up 35% year to date, and it has huge tailwinds behind it.
Stablecoins, which I mentioned, are a big tailwind, but then also the tokenization of assets, which is stocks, bonds, real estate, and other real world assets coming onto blockchains, and the majority of that activity is being built on ET as well.
That is a $500 trillion opportunity that Ethereum can capitalize on, and investors we talk to every day are very excited about the prospect of that.
That is an area that is growing very fast.
And so Ethereum is becoming the trusted platform for the decentralized economy, and we think that it is a once in a generation infrastructure, digital infrastructure opportunity that investors can take advantage of.
Yeah, and speaking of which, with Ethereum staking as well as ETF hopes in play, tell us about redemptions here and for the layperson, can you break down what we're seeing and why?
Yeah, the, the SEC has recently allowed in-kind redemptions for and contributions into ETFs, which means that now we are able to more easily manage the ETF process for people wanting to subscribe to ETFs or redeem from them instead of having to do it via cash we can.
Do it in kind with digital assets that just streamlines the process, makes it much easier, and ultimately it's it's a more streamlined process for the consumer.
So I think that's a great win for consumers and a great step forward for digital assets in terms of becoming ever more embedded and easy to use in the financial system.
And finally, before I let you go, I'm sure this is a question that you get asked a lot, not just by your colleagues but also friends and family.
So do you think Bitcoin's correlation to macro policy itself is actually strengthening or weakening and also tell us about debts.
What is the role that this plays for holders out there?
Yeah, I'm I'm really glad you asked that question.
We actually at Bitwise were very excited.
We just published the first long-term capital markets assumptions on Bitcoin paper, and we see it cementing its role as a global store of value over the next decade and growing at an annual clip of 28%.
Now this we see being driven by demand coming from institutions who want who want to make it a mainstay allocation in investment portfolios, corporations who are buying Bitcoin for their balance sheet as a, as a hedge against inflation. and governments who are starting to explore and build strategic Bitcoin reserves.
And so to your question, what we also see over the coming decade is that even though Bitcoin will remain a volatile asset, we see its volatility becoming more muted over the next decade and its correlation to Other assets, other major assets still remaining low over the coming decade, and we see that as a great portfolio benefit for investors, being the, you know, we're projected to be the best performing asset but still provide very good diversification benefits in investment portfolios.
OK, Huang, we will have to leave it there, but we're also talking to your colleague this week, Matt Hogan, so I'm sure we'll be expanding this conversation then.
Thank you so much for joining us and thank you for sharing all of your insights.
Thank you, Remy.
