Bitcoin and ether drop as investors question the U.S. economy’s strength: CNBC Crypto World

Bitcoin and ether drop as investors question the U.S. economy’s strength: CNBC Crypto World

today Bitcoin sinks as global economic
pressures Mount yugul Labs the creator
of the board ape Yacht Club nft
collection announces job cuts and
Anthony georgiadis of innovating Capital
breaks down how economic uncertainties
are pushing crypto markets
lower welcome to cnbc’s crypto world I’m
Jordan Smith crypto prices are in the
red this morning after a weekend of
trading in which we saw bitcoin’s price
swing between 62 and
$64,000 by new Eastern that cryptocur
was smack dab in the middle trading at
$63,000 ether meanwhile fell to 3181 and
salana dropped to
$136 investors are still making sense of
the current economic situation around
the globe here in the US GDP data last
week showed the economy grew less than
expected in q1 all well inflation data
shows prices are still going up faster
than the fed’s 2% goal now all of that
is likely to be on the Federal Reserve
radar as it meets this week but Wall
Street widely expects interest rates to
remain unchanged that being said
Treasury yields are moving lower today
as well something that would normally
raise bitcoin’s price and we’ll talk
about that more for our main
story all right first let’s talk about
today’s headlines Yuga Labs the company
behind the borap yacht club nfts is
cutting staff as part of a restructuring
the company’s CEO Greg salano announced
the layoffs Friday on X sharing
screenshots of the message he sent to
Yuga lab’s teams in the note he shared
that Yuga lost its way and is going from
zero to one again Solano who is a
co-founder of the company and has been
CEO since February didn’t specify how
many jobs were affected boap yach Club
transaction volumes have fallen more
than 98% from their peak in August of
2021 according to data from crypto slam
next the Department of Justice is
pushing back against tornado cash
developer Roman Storm’s motion to
dismiss charges back in March Storm’s
attorneys argued that referring to
tornado cash as a mixing service is
misleading and that it’s neither a
currency mixer or a service they also
went into detail on how tornado cash
Works to prove that point the government
meanwhile argues in the latest filing
that the Motions should be dismissed
entirely and reiterated the claim that
tornado cash laundered at least $1
billion in criminal proceeds and even
facilitated the laundering of funds used
for North Korea’s weapons of mass
destruction program the doj says it
expects to prove tornado cash executed
Anonymous transactions for its customers
and that storm cannot obtain dismissal
of the indictment by simply making
factual assertions about his own
contested view as to how the tornado
cash service
operated all right let’s go back to
markets for our main story after
crypto’s price swings over the weekend I
spoke with Anthony Georgia General
partner at innovating Capital to get his
take on how macroeconomic pressures are
weighing on the crypto Market I want to
start with uh treasury yields the Y the
yield on the 10-year treasury has come
down from its Thursday high after we got
that US economic data showing GDP growth
fell below expectations um it’s unusual
to see both Bitcoin and treasury yields
moving lower together rather than
opposite directions of of one another
what do you think what do you make of
that move of seeing Bitcoin sort of fall
uh with treasury yields uh in the past
few
days yeah there there’s a lot going on
um in general right now obviously from
both kind of a monetary but really
what’s becoming a big highlight is is
the fiscal policy um which I’ll touch on
in a sec here you know as you mentioned
treasury yields are down um we had a GD
print last week that really showed a bit
more of sluggish economy while higher
core PC comes and demonstrates that hey
inflation’s certainly sticking around a
bit longer so this stagflation risk has
obviously led to some fears that you
know there might not necessarily be a
rate cut for the foreseeable future this
year whatsoever I think the markets are
still pricing in you know one rate hike
with respect to bitcoin and risk assets
obviously you know you have two highly
conflated efforts here monetary policy
and the fiscal policy side and I think
the markets are really trying to wrap
their heads around how that might impact
a risk on asset in this particular
environment and I think that there’s
been obviously less enthusiasm or
optimism um just with respect to the
potential speculation of Bitcoin in this
upcoming bull market um with respect to
ease of monetary policy but then the
other thing I think to think about too
is there are certain Supply demand
dynamics that are happening right now
happing just happened we aren’t
necessarily seeing the same sort of
speculation in that that asset class as
we saw in pre previous happening cycles
and I think a lot of that also has to do
with some of the institutional pressure
and the Dynamics of certain Supply flows
in the market that are impeding some of
those same historical
precedents yeah there’s a reason I
started with talking about the macro
environment versus you know something
like the having or the ETFs which are
are both in the rearview mirror now it
feels like the macro environment is
really what’s in Focus right now um the
the FED is meeting this week and I think
that’s on the mind of a lot of investors
we don’t expect a rate
um coming and and in fact expectations
for a rate cut have been pushed back as
you mentioned um you know one of the
things that we saw with the crypto
Market as uh you know interest rates
climbed in the past year and a half is
that there was there was a lot of panic
at first but then people sort of looked
past what the Fed was doing um do you
see a situation where if fed if rate
Cuts get pushed out past 2024 into next
year that eventually um some of the
concerns from crypto investors might get
diminished and they might start paying
less attention to the fed or is this
something that’s going to stay with us
until we actually see rate Cuts well we
obviously live in a economy that’s
driven by quantitative policy you know
easing versus tightening and so whether
or not some of those concerns should
really obviously be mitigated you know
our our staunch position and my strong
conviction is that the future of Bitcoin
is not necessarily going to be totally
driven by you know pure monetary or
fiscal policies ESP especially one that
pertains to a single nation state you
know being the us we obviously don’t
live in that environment today and
Bitcoin is going to be extremely
reactive um to short-term movements with
respect to 10 25 basis point rate modes
over the long term Bitcoin will likely
behave more in a inflationary resistant
and more safe haven perspective we’re
obviously not there yet the other thing
I want to talk to you about outside of
the macroeconomic environment is the
regulatory environment the SEC seems to
be picking up the pace on its
enforcement actions again especially
when it comes to the defi space uh we
had the Unis swap news not too long ago
and then we had the consensus lawsuit in
the face of its own Wells notice do you
think that the focus on defi is
problematic for for altcoins or Bitcoin
uh going forward or is this just noise
that investors will eventually look past
it’s certainly noise um the regulatory
environment is I’d say in a
very vulnerable state and at a
Crossroads with regards to what the
future of web 3 and digital assets will
be in the United States based off of
measures that regulatory bodies and
legislators enact now um you know I’m of
the opinion that the way that we’re
seeing things unfold right now is not
necessarily the healthiest for the
long-term growth prospects of web 3 in
the US um and I certainly think that
obviously investors Traders Etc need to
be very mindful of certain enforcement
actions that are taking place now that
being said we’re seeing for the first
time more bipartisan support for
clear-cut regulatory guidelines and
obviously that’s not going to happen
overnight but I do think that some of
the issues we’re seeing today with
respect to certain enforcement actions
will potentially subside over time as
there’s a more clear road map of how you
can operate and how you cannot operate
the other thing we’re watching are the
ethereum ETFs we’re expecting to answer
on a few proposals in front of the SEC
right now coming up in May um it sounds
like people are mixed on whether those
will get approved um you know we saw a
huge runup for Bitcoin after the spot
Bitcoin ETFs were approved um if these
ETFs don’t get approved do you think
that that will hit ethereum’s price will
that have any effect on bitcoin what
what are your expectations there do you
think that they’ll get approved I’m very
bearish on the concept of an ethereum
ETF you know the SEC has made it very
clear at one point in time it had
labeled ethereum as a sufficiently
decentralized asset that was obviously
pre merge uh unfortunately ethereum
became somewhat of a captured Network
post merge and when that occurred you
obviously are dealing with a self-state
asset U you know obviously users must
self stake 32 eth um in order to
actually operate validators on the
network themselves uh and in theory
that’s great but certain features of
ethereum that enable effectively pooling
of assets and liquid staking in the form
of Lio or coinbase or things like that
uh led to a somewhat captur Network um
and so ethereum today know validators
are really controlled by I think the
last time I looked it was you know the
top four or five
validator providers controlled over 50%
of the network makes it much easier to
freeze transactions it makes it much
easier to
obviously communicate or cooperate with
certain regulatory bodies if you know
things need to be reversed or if certain
transactions need to be blocked um and
it also lends itself to the fact that
ethereum is not sufficiently
decentralized so I think there are a few
issues right now with the ethereum
network and how it’s actually positioned
that the SEC is not going to necessarily
allow it to effectively the same
underlying label as Bitcoin did and
being sufficiently decentralized and you
know until it determines whether or not
it’s actually security uh I don’t see an
ETF in the future all right that’s all
for crypto world today we’ll be back
again tomorrow and we’ll see you then

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, Anthony Georgiades, general partner at Innovating Capital, discusses investor sentiment in the midst of uncertain U.S. economic data.

Chapters:
00:00 – CNBC Crypto World, April 29, 2024
0:22 – Bitcoin dips
1:06 – The headlines
2:39 – Innovating Capital’s Anthony Georgiades

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Bitcoin and ether drop as investors question the U.S. economy’s strength: CNBC Crypto World