Increasing Adoption: Institutional Investors and Bitcoin | Markets Daily
volatility people immediately say it’s
negative like a volatile substance can
blow up but volatility is like
cholesterol there’s good cholesterol and
there’s bad cholesterol so volatility
can also be like a heartbeat it shows
Vitality or it can be like a a shutter
telling you that something’s wrong so
Bitcoin has good volatility but overall
if you look at how volatile Bitcoin was
3 years ago it’s half as volatile its
volatility coming in which means its
uncertainty is
dropping it’s Wednesday April 24th 2024
hello and welcome back to markets daily
where we bring you insights from the
smartest and most experienced Traders
investors analysts and so much more it’s
been 5 days since having and Bitcoin is
holding steady at around $66,000
there’s been barely any movement which
we’ll talk about why that is with our
guests in a minute ethereum and other
major crypto assets have been following
a similar Trend as they usually do
surprisingly madic is leading the market
today up about 4% at 76 cents but
overall it seems that the market is
still digesting the having on Friday
night while also navigating the
macroeconomic landscape so let’s chat
with our guests about this and more on
the show today we have Mark Connor’s
head of research at 3 IQ welcome Mark
lean thanks for having me on always
always a pleasure being here mark this
week has been surprisingly calm in the
crypto markets with Bitcoin and ether
both trading in tight ranges why are
Traders hesitant to make moves right now
or is this just a normal POS having
reaction uh that’s a lot that’s a pack
question there heren is it a normal one
so
on like most analysts we couldn’t help
ourselves on using just the three data
points from the prior three happenings
to project going forward and we know
that three data points or three events
don’t make a pattern and it’s not
exactly um a consensus or robust sample
but it is following the same pattern in
fact at the beginning of the year we
looked at the prior three having and
when Bitcoin was at 41,000 we said all
right we like the prospects of an ETF
this is in January before the 11th um
when we did our Outlook we think the
macroeconomic environment which you just
mentioned
supports fiscal spending which means
that Bitcoin thrives as a store of value
and as we saw with the Frankenstein bill
passed just a night or two ago of 95 5
billion to fund Taiwan to fund the
Ukraine war to to um provide uh
humanitarian Aid I believe to the uh
Middle East and to help the Taiwan semi
they basically is almost nothing they
didn’t throw in this bill all that
spending is constructive so where am I
going with this Bitcoin enjoyed a
movement from January through the middle
of March based on the macroeconomic
environment which is constructive and
based on past
havingsex structive and what are people
waiting for next more adoption more
buyers so Mark you say that the having
will have the same result as the last
Cycles um how is that possible if we
have such a different macro and
institutional environment than four
years ago for different reasons so dead
on what the habing does is as we know
programmatically Cuts Supply in half
it’s not as big a deal this time he’ll
lean dead on because we believe it’s
more of a demand driven motion so that’s
how it’ll change change but what the
having did do is it brings attention it
for it validates the fact that this is a
um disinflationary product so it’s more
of almost a marketing um advertisement
for Bitcoin and a a period of
galvanization but as far as Dynamics it
is demand the macroeconomic environment
I would say is the same in in
2008 we had the uh crisis we had
printing um in 2019 we had a repo break
we had printing by the market in 2020 we
know what happened we had Six Trillion
of printing in 2023 when four banks
failed we had $400 billion of printing
last night we printed so the macroecon
it’s just been a Stairway you know to De
basement and all Bitcoin does is as we
know is sit there and slowly allow more
people to realize like the Kansas Raa
who put 20 million into their fund it’s
one of their largest Holdings middle of
the country no one’s heard of them but
people are buying they didn’t own 20
million of the fbtc before now they do
so we see more of that going on I’m
gonna come back to you about Kansas um
but speaking of printing tell me about
the impact that the weakness or strength
of the dollar has on the price of
Bitcoin and how closely are you watching
this I if there’s one word Helen you and
I will speak over the next year and I
think if we do Google searches the term
Fiscal dominance will be like brexit was
in 2016 people are going to be just
hitting that thing early and often what
does it mean it means that to solve
problems we
don’t try to have legislation or try to
promote jobs we just print money so we
did it again last night we’re going to
be doing it again so I think that the
political
expedience has found an only Avenue of
of op of egress and that is to pull the
lever of printing more money and as a
relates to
bitcoin what it does housing prices all
finite assets watches
wine unique finite assets gain what they
call monetary premiums stores of value
and that’s happening even with mortgage
rates High Helen you’re seeing housing
prices just go higher I want to talk a
little bit more about specifically your
outlook on the price of Bitcoin do you
expect more selling pressure to come in
the coming weeks and months as a result
of the having or are we going to stay at
this mid $60,000 level for a while in
your opinion what’s what’s your outlook
and maybe you can also talk about your
price outlook for the end of year for
Bitcoin if you have one sure I’ll start
with that um our yearend uh price is I
we have three price points the base case
of
110 the midpoint of I believe it’s 160
and the high case of 180 and is that
dependent on rate Cuts is that price
into that or no no it is basically based
on printing so it’s it’s not the price
of money that matters Helen it’s the
supply and there’s more coming
unfortunately and that just means that
hard assets will acrw in value as a
store because people are going to put
their money somewhere and I want to step
back and talk about our three price
targets and and it relates to your
question about where are we in the short
term or or medium or long
term we have a big spread between our or
among our three points and if you notice
the midpoint of 160 is not between 110
and
180 and that’s because bitcoin’s price
distribution punches really hard to the
upside it’s positively skewed so to our
listeners who aren’t in statistics or
Finance which means you’re probably more
fun than I am it what what that means is
that if you look at a a sample of people
in a mall and you put all their heights
together it’d be normally
distributed be average say it was men
it’ be average of 510 women average 57
5’6 and then everything’s around it’s a
bell curve so we all know what the bell
curve is but there’s some distributions
of of observations or or returns that
aren’t Bitcoin its distribution has a
big fat tail to the upside over any
rolling two or threee period and
managers like that managers in Kansas
Black Rock Fidelity they’re like this is
really unique I need to own this so
that’s why our mid-case is closer to our
high case elen because bitcoin’s
performance acts that way how about the
volatility though that we’re still
seeing in Bitcoin and ether and the
broader crypto Market is that something
that you see easing over time or are we
always going to have to deal with that
so I’m going to do something here
volatility people immediately say it’s
negative like it’s like a like a
volatile substance can blow up but
volatility is like is like um
cholesterol now you don’t have to worry
about that right now Helen I’m going to
make a judgment there and you know but
people my age do and there’s good
cholesterol and there’s bad cholesterol
so volatility can also be like a
heartbeat it shows
Vitality or it can be like a like like a
fear like a sort of a shudder telling
you that something’s wrong Bitcoin has
upside
volatility so Bitcoin has good
volatility but overall if if you look at
how volatile Bitcoin was 3 years ago
it’s half as volatile it’s volatilities
coming in which means its uncertainty is
dropping that’s why you’re seeing
adoption but we talked before the show
kicked off about treasury volatility
it’s going up there’s more uncertainty
about who’s going to own our treasuries
how many we have to issue with that the
Market’s stepping away a bit and When
Buyers step away volatility
increases so there’s a huge difference
in the behavior improving volatility
with Bitcoin and deteriorating
volatility or more volatility with
equities and debt so that I think is one
of the most underappreciated stories in
finance by many except again Folks at
Black Rock Fidelity and now we find out
Kansas Minnesota Iowa as well okay let’s
get to Kansas let’s get to Black Rock I
was reading one of your recent
interviews and you said that one red
flag that you look for in projects or
businesses is
centralization now a lot of your peers
in the industry have criticized exactly
that about the spot Bitcoin ETFs because
they almost all rely on one custodian
which is coinbase so does that mean
you’d stay away from investing in those
ETFs or is this a different scenario of
centralization it’s not a different
scenario centralization so Bitcoin is
unique and this is if volatility is a
tough concept this one shouldn’t be as
difficult but it’s not it’s foreign when
you own an equity it’s not a bare asset
it’s a certificate it’s if if your
broker Fidelity or black rock or someone
loses it then get another one like
there’s there’s a
trace but bitcoin’s a bearer asset it
can be
stolen and the question is can it be
hacked can it be so the fortification
and the security of each custodian is a
Paramount importance so it is something
to be focused on as far as a concern I
would say that it’s a priority to
understand how your custodian coinbase
Fidelity or others manage the assets so
some people think just because I own it
it’s all fine you should be curious
about it now I believe the num is about
4%
of uh Bitcoin Supply is is uh within the
US ETFs you know the when is it 56 58
billion dollars um so that’s a
number you know is coinbase a Honeypot
you know that’s something that some
people are talking about but coinbase
also does have it you know a pretty
robust system but it is something to
look at and it’s another reason why some
folks are looking at multisig and and
other types of options
right so we’ve been getting some data
recently on the investors behind the
spot Bitcoin ETFs what’s your reaction
to that so far you mentioned Kansas is
there anything else that’s stuck out to
you yeah it’s it’s anecdotal so first
13f filings is a
requirement if if you look at Amazon you
look at the holders you see the Jeff
Bezos who’s number one his mom and dad
are number two still God bless them and
then they go down the list but the top
10 holders are probably 25% of it it’s a
concentration and it represents a large
amount of holders if you look at the
spot Bitcoin
ETFs the 10 or 20 names they have don’t
add up to 1% of the Holdings that’s
because their raas they have 10 or 20
million of the 10 billion or five
billion depending on who the ETF issuer
it’s still retail the institutions did
not show up but the in institions are
raas registered investment advisers who
have individual retails they’re
somewhere between a black rock and just
what we call or Eric balcon is of of
Bloomberg calls the do-it-yourselfer
retail person the registered investment
advisers that did show up were from the
Midwest I think the guy from Kansas has
his own ranch um you know they have uh
they have almost like a you know uh
family community integrity
um ethos so there’s almost an a pattern
we’re seeing in the raas that did show
up it wasn’t really New York or La it
was the middle of the country in the US
you know think like um you know more of
a conservative background so that’s
something that we’re looking for as far
as if that’s a pattern and in crypto we
know Meme coins are a big deal we wonder
if Bitcoin is its own meme as far as
does it practice certain ethos of you
know libertarianism people say um
sovereignty and all that so yeah to be
determined Helen yeah really interesting
and and we’ll get more data on that in
May so we’ll we’ll probably have you
back on and talk about it a little bit
more but Mark thanks so much for coming
on and and sharing your insights with us
a pleasure thank you Helen that was Mark
Connor’s head of research at 3 IQ and
that’s it for Market’s daily today we’ll
be back tomorrow with a new episode as
always leave a comment if you have any
questions for our experts and we’ll make
sure to get that answered for you I’m
hen Brun thanks for tuning in
On “Markets Daily,” — Mark Connors, Head of 3iQ discusses the current state of the crypto market after the halving and the impact of the macroeconomic environment on bitcoin. He explains that the market is following a similar pattern to previous halvings and that the macroeconomic environment supports bitcoin as a store of value.
00:00 Introduction and Overview of the Crypto Market
05:24 The Weakness or Strength of the Dollar and its Impact on Bitcoin
11:07 Centralization and Custodian Security in Spot Bitcoin ETFs
15:35 Conclusion and Closing Remarks
#cryptocurrency #digitalfinance #finance #bitcoin #crypto #markets #marketsdaily #coindesk #btc #bitcoinhalving
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