Bitcoin briefly falls below $39,000 as post-ETF selling pressure continues: CNBC Crypto World

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Mathew McDermott, global head of digital assets at Goldman Sachs, explains what the approval of spot bitcoin ETFs in the United States means for the bank.

Chapters:
00:00 – CNBC Crypto World, Jan 23, 2024
0:22 – Bitcoin falls
1:28- Mathew McDermott of Goldman Sachs

For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC

https://www.cnbc.com/select/best-cred…

#CNBC
#CNBCTV

Bitcoin briefly falls below $39,000 as post-ETF selling pressure continues: CNBC Crypto World

Today Bitcoin Falls further below the $40,000 level and in an exclusive on camera interview Matthew McDermot Goldman sax Global head of digital assets breaks down the big bank’s involvement in spot Bitcoin ETFs welcome to cnbc’s crypto world I’m Talia Kaplan Bitcoin extending its losses this morning after it fell below

$40,000 for the first time since early December Yesterday by noon Eastern Bitcoin slid more than 2% and traded above $39,000 but at one point traded as low as $38,600 this latest correction is all part of the sell the news event analysts had been expecting post ETF approval in

Fact experts tell CNBC that Bitcoin could fall further before it turns higher but new all-time highs might still be on the horizon in 2024 now looking at the broader Market the recent selloff also extended to Ether which fell more than 5% % in the past 24 hours and salana sank by around

2.8% all right turning to spot Bitcoin ETFs for our main story I sat down with Matthew McDermot Goldman Sachs Global head of digital assets to discuss these new products in the exclusive on camera interview McDermot breaks down what the approval of these ETFs means for Goldman

Sachs he also says the bank is now serving as an authorized participant for the majority of spot Bitcoin ETFs trading in the US a lot has happened happened in the digital asset space since we last spoke about one year ago most recently spot Bitcoin ETF started trading here in the

US after the SEC approved 11 applications from asset managers including Black Rock Wisdom Tree and Fidelity so I’m wondering what was your immediate reaction to that Landmark decision did you see it coming and what does it signal to you um we certainly anticipated it um but obviously until

It’s fin approved we never kind of expected but it certainly was our expectation that it was going to happen um in terms of the you know the the actual kind of broader implication for the market were incredibly positive um and I think it’s kind of a big seminal

Moment there’s been obviously a huge amount of focus you know in the buildup to this and so actually seeing you know big regulated institutions having that ability to issue Bitcoin ETFs is a very kind of powerful I think statement for the market and I think while we might

Not see something kind of in in terms of like some huge impact I do think over the course of the year we’ll actually see the full impact of this as more investors actually come in to invest what you’re seeing at the moment is predominantly retail investors as people

Now on the The Wealth Management side the institution start to go through their governance process to be actively investing I think we’ll start to see a significant amount of investment from those particular parts of the industry um so yeah we’re very positive about you know the the the impact for this year

And I think think as you think about 2022 where the sentiment was you know kind of filled with probably a lot of negativity for the most part actually kind of having something that is really positive I think is is very good and I think that extends more broadly across

The digital ecosystem now Goldman Sachs actually came out with a report earlier this month outlining some of the benefits and drawbacks of the spot Bitcoin ETFs and at the time the potential approval of them one of the benefits outlined in the report focused on institutional investors those benefits could include low management

Fees and investor protections afforded by these ETFs what are some of the benefits that jump out at you yeah I think there too as as you kind of highlight I think if you’re you know investing pre the Bitcoin ETF the actual cost was probably a little bit you know

Higher and you saw the pressure amongst the asset manages in terms of even just pre-launch the pricing and so people were driving down pricing and the competitions very very healthy so yes I think it’s a more coste efficient way to invest I think the investor protections you know particularly for wealth

Management and Retail um are significant um and so that is something people really are quite focused on but I think you know in the context of the institutions that ability to invest in a product that is institutional grade obviously can trade on many different exchanges I think is hugely powerful and

When you look at kind of the marketplace more broadly we’ve got the Bitcoin harving po IAL rate Cuts not clear when exactly and then also you’ve got ethereum upgrades there’s just a lot of positive news this year so I do think you know from an Institutional perspective the direction of travel is

Very positive and what about some of the drawbacks tied to these spot Bitcoin ETFs according to that Goldman Sachs report I referenced earlier they mentioned the fact that you know crypto can be traded 247 but these investment vehicles are limited to Market hours what other drawbacks jump out at you I think that’s

Yeah a very um obvious one as well and I think also you know as we start to think about Bitcoin if we do see you know huge amounts of investment into these ETFs there’s obviously a scarcity of the underlying asset as well so that’s something we don’t need to worry about

Today but something to consider on the forward um and I think you know I kind of for me I think the positive aspect is the breadth of the market that it can focus on so yes the point around the market hours is one obviously for from a

Traders perspective they need to be very cognizant of um but yeah I think that’ll probably be the the key ones now what do this approval mean for Goldman Sachs I know that Goldman runs a team trading crypto derivatives for institutional clients and I read that you mentioned

That you have seen significant growth in client interest for crypto derivatives so what else is changing as a result of these these approvals yeah I think it’s good question and I think for us this ability to actually be kind of more actively involved in the US you know

With these products is actually kind of from a crypto perspective it’s very powerful so we’re um you know active on seven of Bitcoin ETFs that have been approved as authorized participant soon to be eight8 plus you know we were already active across you know kind of

The US in the context of the Futures ETF um but also you know more broadly across the globe we we’re active to in Market making with the etps and other type product so so I think for Goldman Sachs it’s great because we can be more active

And as I look at kind of the broader markets business you know it’s the business that focus on ETFs the ones looking to not only facilitate client demand but also on both an agency but a principle basis as well so I think it creates kind of opportunity in in that

Space for a cross-section of our for our clients um and I think as we start to think like I say kind of of the broader product Suite you start to think about other products that can kind of you you know follow on from that like structured

No products and other kind of you know things like that I came across a coindesk article from January 3rd which said that Goldman Sachs is in talks with gray scale and black rock to play a key role of authorized participant for their ETFs where does that stand now and are

There any updates yeah well we actually we’re actually authorized participant now on seven of the Bitcoin ETFs that launched one of which was the black Croc um and graay scale as as well um so so you know we are very pleased to be able to you know to play that role with those

Kind of issuers um also when you look more broadly Fidelity and others we’re also active with it as well it was important for us you know our clients are very keen to to be kind of active in these products and so being able to act as authorized participant which for

Those not familiar that just enables you to be involved with the creation and the Redemption of the uh Bitcoin fund units um ETF issuance certificates rather um which I think is kind of an also an interesting point to mention so had these products been um kind of created

And redeemed in kind which means you’d have had to have kind of you know been involved with the underlying asset that would have been more difficult for us to as an institution to be involved but the fact that they were cash create and Redemption has meant that we have been

Involved and so been able to work with you know like the black rocks and others has been very important for us um so we’re delighted to be you mentioned potentially soon to be eight are you at Liberty to disclose what that eighth one might be um no I mean it’s just

Something we’re going through our internal approvals with that’s all um but it’s kind of I mean it would be kind of the obvious ones um as part of that interesting and it will be very interesting to see what happens in that regard but what do you think has changed

Since the spot ETF started trading specifically as it pertains to the perception of crypto um I mean it’s an interesting question I mean obviously when they were issued there was you know a focus in and around if you’re an evangelist you know you you’re kind of creating and using

You know the very kind of Institutions that perhaps the whole creation of cryptocurrency was designed to navigate around um personally I think it’s exceedingly positive because as we’ve seen you know over the last 12 18 months the regulated institutions that are well capitalized you know do have a very

Important role to play if you really do want to build out the crypto Marketplace and so allowing you know the institutions be on the buy side and then the sell side be it you know as I said authorized partici to Market make is actually a big positive I think for the

Market more broadly and then going back to one of the earlier points you made around the investor protections you know that is obviously a big positive for you know kind of a cross-section of the market that perhaps weren’t or a little hesitant to get back in now recognize

That this is an Institutional grade product and and they can comfortably get back involved into the marketplace but I must emphasized from our perspective we’re obviously more focused on the institutions and the wealth management businesses now that these spot Bitcoin ETFs are trading what do you think will

Happen with those applications for spot ether ETFs I mean a big question obviously you know kind of naturally centers around whether it’s perceived to be you know a security or not and I think that will ultimately be determinant on whether it gets approved I mean there are different schools of

Thought but um you know I think I personally remain positive um that that they will but you know we’ll find out I guess over the course of the next few months absolutely and the SEC is due to make its first decision in May so it’s fast approach is it really is yeah uh

But what do you think is next for crypto now that these spot ETFs are live I know last time we spoke you noted that you were optimistic about the acceleration of adoption do you think that’s going to be Amplified now that these spot ETFs are trading for crypto I think it kind of

Goes back to one of the points I was talking about earlier I think we’ll start to see you know a steady flow of investment into this space I think you know the black rocks and and these funds have actually started to perform very well youve started to see the asset

Under management grow so I think we’ll continue to see that and as more people are approved to invest you know I think that would be positive um I mean you just need to look when we spoke last time Bitcoin was down 60% I think kind

Of year on year if we actually look over the last 12 months it’s Just sh 100% up so there’s obviously been a lot of positive momentum you know in terms of the asset class um there’s been a little dip since obviously the Bitcoin ETFs have been issued which I think is

Perhaps understandable just given you know a lot of the focus and hype around it but as we start to see like the Bitcoin harving as I mentioned the rate cuts and things and we start to see people you know really kind of allocate a certain portions of their portfolios

Into this space I think that you know is going to be a positive and if you think about is this Market being institutionalized just look at the amount that’s open on the CME the cmea has more open interest than any of the unregulated exchanges which you know is

A big shift in terms of the dynamic which really highlights the institutions you know are looking and focus on this market and some of the activity we see within the portfolio companies that we’ve invested specifically points to you know some positive momentum there as well so that’s

Good now mcder also outlined some key trends and predictions for digital Assets in 2024 plus he reveals how many crypto companies the bank currently has in its portfolio and explains how Goldman Sachs digital assets business operates amid an evolving regulatory environment you’ll be able to check out the full interview over at cnbc.com

Cryptoworld okay that’s all for today but we’ll be back again tomorrow and we’ll see you then