Bloomberg Crypto Full Show (01/03/2023)
THROUGH IT -- >> I AM MATT MILLER. >> WELCOME TO BLOOMBERG CRYPTO. A LOOK AT THE PEOPLE AND TECHNOLOGY SHAPING THE WORLD OF DECENTRALIZED FINANCE. >> SAM BAKER FREED IS EXPECTED TO PLEAD NOT GUILTY TO FRAUD CHARGES. >> THE GEMLIKE CO-FOUNDER ACCUSES THE CO-OWNER OF BAD FAITH STONEWALL TEXAS.
>> HAPPY BIRTHDAY BITCOIN. THE FIRST BITCOIN LOCK WAS MINED 14 YEARS AGO AND WE WILL GET THE BULL AND BEAR CASES ON WHERE WE GO FROM HERE WITH GLENN GOOD MORNING -- WITH GLEN GOODMAN AND STEPHEN DIEHL. >> LET'S GET A SNAPSHOT OF THE MARKET AND THE BEST WAY TO DO THAT IS CR WIPE EGO -- CRYPGO. BITCOIN IS DOWN THREE QUARTERS OF 1% BUT AROUND 16,000 -- 16 $600 -- $16,600. WE ARE DOWN 910 TO 1% ON EITHER
BUT THE BIG MOVE IS IN SALINA, A TOKEN BACKED BY SAM BANKMAN-FRIED SO IT SUFFERED AMID THE FALLOUT FROM FTX IS COLLAPSE AND IT WAS DOWN 94% OVER THE COURSE OF 2022 THAT IT IS STARTING 2023 OFF WITH A BANG. UP 30% WHEN YOU COMBINE TODAY'S MOVE WITH YESTERDAY'S MOVE AND PART OF THAT MAY HAVE TO DO WITH MEAN --A MEME TOKEN. >> SOUNDS LIKE A TOKEN MY DAUGHTER NAMED. BITCOIN IS UP 1,000,000,000%. WE ARE MEASURING IT FROM THE FIRST TRANSACTION. HE PROBABLY TWEETED IT OUT
BECAUSE HE USES TWITTER BUT -- UNDER THE HANDLE, THE STALWART. ANOTHER WAY TO LOOK AT -- BITCOIN IS COMPARING IT OVER FIVE YEARS VERSUS META-. BITCOIN IN WHITE AND OVER THE LAST FIVE YEARS, IT HAS TROUNCED FACEBOOK BUT IT IS STILL WORTH FAR LESS AS JOE POINTS OUT, THEN THE COMPANY TRADING AS META-WHICH IS WORTH $5 MILLION IN AN BITCOIN IS ONLY -- $500 BILLION AND BITCOIN IS WORTH $320 BILLION.
LET'S TALK ABOUT THE FALLOUT FROM THE COLLAPSE OF FTX AND SAM BANKMAN-FRIED'S THEY IN COURT IS TODAY. HE IS SUSPECTED TO PLEAD NOT GUILTY TO FRAUD CHARGES WHEN HE APPEARS UP BEFORE A FEDERAL JUDGE. 'S ONLY IS OUTSIDE THE COURTHOUSE -- SONALI BASAK IS OUTSIDE THE COURTHOUSE. TELL US WHAT WE KNOW. SONALI: WE HAVE SAM BANKMAN-FRIED WHO WALKS IN MINUTES AGO WEARING A SUIT AND A NORTH FACE BACKPACK AND HE TRAVELED FROM HIS PARENTS HOME IN CALIFORNIA. HE HAD TO STAY THERE AS HE HAS BEEN PLACED IN THIS $250 MILLION, RECORD-SETTING BOND.
HE IS EXPECTED TO PLEAD NOT GUILTY AND THAT IS TO THE EIGHT CRIMINAL COUNTY IS FACING AND THAT INCLUDES RIGHT FRAUD AND CONSPIRACY TO COMMIT WIRE FRAUD AND CONSPIRACY TO REINVEST THE FRAUD THE UNITED STATES IN CAMPAIGN FRAUD VIOLATIONS. THE LONGER HE PLEADS NOT GUILTY, THE MORE WE WILL SEE THE CASE THAT HAS BEEN BROUGHT AGAINST HIM. AS OUR REPORTER, WHO IS SITTING INSIDE AS PART OF THE REPORTERS EXPECTED TO BE IN OVERFLOW BETTER AT THIS HEARING, SHE HAS REPORTED AND SAID PROSECUTORS HAVE MANY THOUSANDS OF EMAILS AND PAGES AND DOCUMENTS, A NUMBER OF WITNESSES ASIDE FROM THE PEOPLE WHO HAVE FLED GUILTY. TWO OF HIS DEPUTIES AND MESSAGES ON SIGNAL, WHICH IS A POPULAR WAY FOR THE CRYPTO PROUD TO BE COMMUNICATING. -- CROWD TO B COMMUNICATIONS
AND WE WILL SEE THE EVIDENCE THAT COMES THROUGH. KAILEY: HOW LONG ARE WE TALKING IF THIS GOES TO TRIAL? SONALI: MANY MONTHS. THE INTERESTING THING IS THAT FROM THE MINUTE A LOT OF THESE ISSUES CAME TO SERVICE, THE BANK OF THREE FILING AND TO THE MOMENT HE WAS WERE -- HE WAS ARRESTED, IT TOOK WEEKS BUT FROM DECEMBER 15 TWO NOW, WE HAVE TWO OF HIS DEPUTIES PLEADING GUILTY AND HIM AT THE COURT OF AND HAD A NECK FOR DIET IN ORDER TO BE HERE -- MANHATTAN EXTRADITED IN ORDER TO BE HERE. CANDACE MOVE OUT SERVER -- CANDACE MOVE FASTER -- CAN THIS MOVE FASTER? YOU THINK THAT YOU ARE A OF THIS AS WELL. THERE ARE MANY DEPUTIES THAT HAVE QUESTIONS ABOUT WHETHER THEY HAD A ROLE IN IT AND WHAT THEY DO AND HOW MUCH -- PART OF THIS, WHETHER IT IS A STANDALONE ISSUE, PART OF IT IS ONE OF THE BIGGEST FRAUD CASES IN AMERICAN HISTORY AS WELL AS MILLIONS OF CUSTOMERS WANT THEIR MONEY BACK -- WHO WANT THEIR MONEY BACK AS WELL AS A COMMENT ABOUT SO MANY YEARS OF EXCESSES IN THIS INDUSTRY AND IN EIGHT YOUNGER GENERATION OF PEOPLE TRYING TO CHANGE FINANCIAL MARKETS. KAILEY: THANK YOU FOR REPORTING OUTSIDE THE COURTHOUSE.
THE FALLOUT FROM THE COLLAPSE OF FTX IS GETTING MESSIER. CAMERON WEIKEL FOSS -- IS ACCUSING A FORMER -- IN LIMBO SINCE FTX'S MELTDOWN AND HE WROTE IN A OPEN LETTER, IT IS NOT LOST ON IS THAT YOU HAVE BEEN WORKING NATURALLY TO TRIAL TO -- TO TRY AND FIREWALL BCG FROM THE PROBLEMS THAT YOU CREATED AT GENESIS. OUR REPORTER IS JOINING US WITH MORE.
HOW DOES THIS GET RESOLVED? >> IT IS POSSIBLE THAT THIS ENDS UP BEING RESOLVED IN COURT BUT I THINK THIS OPEN LETTER IS AN INDICATION OF HOW DESPERATE THINGS ARE. THERE HAVE BEEN MANY ATTEMPTS SINCE NOVEMBER TO GET CUSTOMER FUNDS TO RETURN IT TO GEMINI CUSTOMERS AND THEY FAILED AND CAMERON WINKLEVOSS SAID HE SUBMITTED PROPOSALS TO ANOTHER PERSON AND HE HADN'T GOTTEN BACK AND SILBERT SAID HE SUBMITTED A PROPOSAL. ONE PERSON DREW A LINE IN A SAND AND SAYS WE HAD TO -- WE HAVE TO RESOLVE THIS BY JULY 8 AND IT IS FAIR TO EXPECT A DRAMATIC ACTION . MATT: WINKLEVOSS ALLEGE THAT -- FROM GENESIS AND SILBERT SAID THAT WE DIDN'T BORROW THAT BILLION OF DOLLARS FROM GENESIS AND WE HAVE MISSED INTEREST PAYMENTS.
SUGGESTING THAT THEY HAVE BORROWED MONEY FROM GENESIS AND NOT PUTTING A NUMBER ON IT. >> THERE IS A PROMISSORY NOTE THAT DCG HAS ISSUED TO GENESIS AFTER THE CRYPTO CRISIS HAPPENING. THAT IS IN DO FOR 10 YEARS THAT -- THAT NOTES IS NOT DUE FOR 10 YEARS AND THERE ARE QUESTIONS ON WHAT GENESYS'S LEGAL IMPLICATIONS ARE IN THE TIMELINE ON EXACTLY WHEN SOME SET OF ACTIONS HAVE TO HAPPEN AND LAWYERS WILL HAVE TO GET INVOLVED IN ARE ALREADY HEAVILY INVOLVED. KAILEY: WE HAVE TO WAIT AND SEE HOW THIS PLAYS OUT. THE FTX FALLOUT IS BLEEDING INTO THE NEW YEAR WITH BITCOIN AND IF THEY'RE YOUNG KICKING OFF 2023 IN THE RED -- ETHEREUM KICKING OFF 2023 IN THE RED. ABIGAIL, WHEN WILL WE GET A
BREAKOUT? ABIGAIL: AND MAKE THE SOON AND LET'S GET SOME BACKGROUND. WE HAD SEVERAL BEAR MARKETS AND THE FIRST BACK TOWARDS 2012 DOWN 91% IN THE CURRENT ONE DOWN 75% AND THE TWO LITTLE ONES 80%. THE RANGE YOU'RE TALKING ABOUT, IT IS NOT SO BAD RELATIVE TO THE OTHER ONES BUT THE POINT TO MAKE COMING EACH OF THE PREVIOUS BEAR MARKETS GREW HIGHER. LET'S TAKE A LOOK AT THAT WEEKLY CHART AND BACK IN 2018 AND 2019, YOU HAD A STRONG DOWNTREND BUT SELLERS EXHAUSTING THEMSELVES. WE HAVE SOMETHING SIMILAR
HAPPENING NOW AND IT SUGGESTS THAT WE COULD HAVE BITCOIN BREAKOUT ABOVE IF THE LAST HOLD -- LAST HOLD LOWS -- THOUGH HOLDS --LOW HOLDS. MATT: THAT WOULD BE ABOUT $65,000 AND THAT IS ABIGAIL DOOLITTLE WALKING US THROUGH THE TECHNICALS IN DOOLITTLE -- CRYPTO. GLEN GOODMAN WILL JOIN US AND WE WILL -- FROM EL TORO. KAILEY:
YOU WILL GET US -- WE WILL GET A PERSPECTIVE FROM STEPHEN DIEHL. >> THAT HAS BEEN A ROUGH COUPLE OF QUARTERS FOR CRYPTO. >> FIRST LUNA TARA. >> THERE IS A POSTMORTEM ON THAT THAT NEEDS TO BE DONE. >> THERE ARE COMPANIES THAT MAY FAIL IN 2023. >> LONG-TERM WILL BE POSITIVE.
>> WE SHOULD EXPECT SOME CRYPTO LEGISLATION. >> REGULATORS CAN'T JUST KEEP WAITING FOR CONGRESS. >> IT WILL BE NEARLY TARGETED TO STABLECOINS. >> I EXPECT VOLATILITY IN THAT MARKET. MATT: MARKET PARTICIPANTS CLOSING OUT THE DISASTROUS YEAR FOR DIGITAL ASSETS AND JOINING US IS GLENN GOODWIN -- GLEN GOODMAN. HE IS AUTHOR OF THE CRYPTO LEADER. KAILEY: TRADER.
MATT: I'M SURE EVERYONE ELSE KNEW WHAT I MEANT. WE FIND BITCOIN HAS NOT BUDGED SINCE NOVEMBER 8 AND STUCK AROUND 16,000. WHY THIS INCREDIBLE LACK OF VOLATILITY? >> THIS IS TRUE BUT LOOKING AT THE GRAPH, THE GRAPH THAT ABIGAIL WAS SHOWING JUST BEFORE THE BREAK, IT WAS FASCINATING WHEN YOU LOOK AT IT ON THE BIG SCALE BECAUSE YOU SEE, WHAT WE HAVE BEEN POINTING OUT FOR YEARS WHICH IS THAT YOU GET THESE BIG TRENDS WITH CRYPTO. UP AND DOWN, THESE BIG WAVES, THAT LAST FOR A FEW YEARS. THIS CANNOT GO ON FOREVER AND
EVER. WE WILL NOT BE SITTING HERE IN 100 YEARS TIME WITH THE SAME KIND OF PATTERN AND WAVES BUT IT HAS HELD FIRM. IT IS REFLECTED IN A INTERESTING REPORT I READ FROM THE MAN GROUP BEFORE CHRISTMAS. IT SHOWED THAT A TREND FULL -- SHOWING STRATEGY HAS OUTPERFORMED BUY-AND-HOLD. IT HAS BEEN EFFECTIVE AND THAT
IS WHAT I HAVE BEEN DOING. I BUY AS THE TREND BEGINS. EVERYONE IS GOING CRAZY ABOUT CRYPTO AND THAT IS THE TIME I THINK ABOUT SELLING. SO FARM THAT HAS WORKED -- SO FAR, THAT HAS WORKED SEVERAL TIMES BUT YOU CANNOT BE SURE IT WILL CONTINUE FOREVER BUT SO FAR, ALWAYS THE WAVES. KAILEY: ONCE WE GET OUT OF THIS PERIOD OF STASIS, BUT WE GET A BREAK TO THE UPSIDE OR DOWNSIDE. RICK: WE CANNOT DEFINITIVELY -- GLEN: WE CANNOT DEFINITIVELY SAY THAT WE ARE DONE WITH MOVEMENT.
THE CYCLE IS TELLING US WE ARE AT THE BOTTOM BUT I KNOW FROM PAST EXPERIENCE THAT EVEN WHEN THE INDICATORS TELL YOU THAT YOU ARE AT THE BOTTOM, YOU MAY GET A LURCH DOWNWARDS. WE HAD A HUGE LURCH IN 2020 BEFORE THE BULL MARKET BEGAN BECAUSE THE PANDEMIC CAUSED EVERYONE TO PANIC AND EVERYONE RUSHED OUT OF STOCKS AND CRYPTO BUT THEY RUSHED BACK INTO CRYPTO. AND THE BULL MARKET BEGAN SO YOU CANNOT RULE OUT ANOTHER LURCH DOWN FOR -- DOWNWARD BUT AS A TREND FOLLOWER, I WILL WAIT UNTIL WE SEE WE ARE AT A UP OR TREND. I STARTED BUYING UNTIL WE GET
TO $10,000 AND IN 2020, THE PRICE WENT AS LOW AS $4000. I WAITED A WHILE AND MISSED UPSIDE BUT GOT IN WITH 20 MORE UPSIDE. KAILEY: WHEN YOU REFER TO THE BAY, THEY WERE RUSHING OUT AND RUSHING IN TO CRYPTO, WHO ARE WE TALKING ABOUT? ARE WE TALKING ABOUT RETAIL OR INSTITUTIONS? ARE THERE INSTITUTIONAL BIAS -- BUY-IN? GLEN: THERE IS NOT ANY INSTITUTIONAL BUY-IN NOW BUT IT WILL BE AGAIN BECAUSE IT IS ON THEIR MEN NOT -- BUT IT IS ON THEIR MENU.
ONE PERSON WAS POSITIVE -- THE REPORT EVEN SUGGESTED THAT IF YOU DO NOT INVEST IN CRYPTO AND A THE LONGER TERM, YOU ARE EXPOSED TO IT IN A NEGATIVE WAY BECAUSE COMPANIES YOU ARE EXPOSED TO MIGHT BE PUSHED OUT OF THE MARKET BY CRYPTO BLOCKCHAIN BASED COMPETITORS. THAT REPORT WAS SUGGESTING THAT YOU NEED TO HAVE EXPOSURE. I AM HOPE -- I HOPE I AM NOT PARAPHRASING THEM THEM TOO MUCH. MATT:
THIS CRYPTOCURRENCY, IT FELT LIKE, WAS INVENTED TO CIRCUMVENT THE KIND OF CENTRALIZED GOVERNMENT CONTROL. DO WE EVEN WANT IT? GLEN: I WANT TO SEE MARK SKEPTICISM GENERALLY DURING THE BULL FACES. WE ARE NEVER SHORT OF SKEPTICISM DURING THE BEAR FACES BUT PEOPLE LIKE THE NEXT GUY YOU HAVE, STEPHEN DIEHL, WHO WAS SHOUTING ABOUT THE NEGATIVES DURING THE BULL MARKET, NO ONE WAS LISTENING TO HIM THEN BUT THEY ARE LISTENING NOW BUT IT IS TOO LATE FOR THAT. DURING THE BULL FACES, WE NEED PEOPLE TO LOOK AT THINGS LIKE LUNA, WHEN YOU HAD 20% YIELDS OFFERED ON PEOPLE'S MONEY, I WAS LOOKING AT THAT AND I WAS SAYING, THAT SOUNDS SUSPICIOUS.
I DON'T KNOW THERE IS A PROBLEM WITH THE CODE BY 20% YIELD, IF IT IS IN TRADITIONAL CLIMATES, YOU WOULD START ASKING SERIOUS QUESTIONS IN THE SAME VISA HAPPEN IN CRYPTO. PEOPLE SHOULDN'T GET TOO OVEREXCITED ON THE UPSIDE. MATT: GLEN GOODMAN THERE, CRYPTO BULL FROM ETORO. WE WILL GET A SKEPTICS PERSPECTIVE AS HE MENTIONED.
STEPHEN DIEHL JOINS US, OFFER KAILEY: THIS IS BLOOMBERG CRYPTO AND I AM KAILEY LEINZ WITH MATT MILLER. STEPHEN DIEHL SAYS CRYPTO TECHNOLOGY DOES NOT SOLVE A REAL PROBLEM. HE WRITES -- STEVEN IS JOINING US NOW AND I KNOW YOU ALSO HEARD LEN GOODMAN OF ETORO NAME CHECK YOU. I WILL GIVE YOU THE FLOOR TO YOUR REACTION WHAT HE SAID. STEPHEN: I AGREE WITH WHAT HE SAYS AND THERE IS NEED FOR MORE SKEPTICISM ABOUT CRYPTO.
I AM A NONBELIEVER BUT I AM WITH THE WARREN BUFFETT SCHOOL OF THOUGHT ON CRYPTO AND A LOT OF US HAVE BEEN WAVING OUR HANDS FOR YEARS ABOUT THE PROBLEMS WITH CRYPTO BUT LITTLE AVAIL. MATT: WHEN YOU TALK ABOUT THE LACK OF A POINT OR USE CASE FOR CRYPTO, I THINK OF WHAT WE SAW HAPPEN WHEN RUSSIA FIRST ADMITTED UKRAINE AND THERE IS A CENSORSHIP, THAT IS THE JARGON HE -- JARGONY CRYPTO WAY OF SAYING, GOVERNANCE -- GOVERNMENTS TRY TO CONTROL THE MONEY FLOW. THE POINT, PART OF THE POINT, AS I UNDERSTOOD IT 15 YEARS AGO, WAS THAT YOU COULD REWORK -- YOU COULD WORK AROUND THE GOVERNMENT CENSORSHIP. ISN'T THAT IMPORTANT? STEPHEN: I WOULD DIG INTO THE DETAILS ON HOW THAT WILL WORK BECAUSE IF YOU WANT TO SEND MONEY TO A PERSON UNDER A AUTHORITARIAN REGIME -- REGIME, YOU HAVE TO USE OF LOCAL CURRENCY AND IF YOU USE THAT CURRENCY UNDER A AUTHORITARIAN REGIME, IT WILL -- MATT: YOU SEND MONEY OUT OF A AUTHORITARIAN REGIME AND AUTHORITARIANS ARE TRYING TO CONTROL THE USE AND THE LOCAL GOVERNMENT IS MORE FRIENDLY TO IT. THE OTHER USE CASE IS A STORE OF VALUE WHICH WE HAVE SEEN HAVE BEEN IN MANY EMERGING ORCHIDS WITH RUNAWAY INFLATION AND AFRICA AND IT HAS BEEN HELPFUL OF THOSE WHO COULD NOT COUNT ON THEIR OWN LOCALS CURRENCIES. HOW DO YOU RECRUIT THAT -- REFUTE THAT? STEPHEN: IT DOES NOT STORE VALUE OVER LONG PERIODS OF TIME? IT IS PREDICATED ON FINDING -- IT HAS THE SAME ECONOMICS OF THE POLICIES SCHEME -- PONZI SCHEME.
ALL OF THESE CRYPTO INVESTMENTS HAVE EXACTLY THE SAME FUNDAMENTALS AND THEY HAVE THE SAME THEY ARE MARKET VALUE WHICH IS ZERO AND YOU LOOK AT PLACES LIKE EL SALVADOR WHERE YOU THEY TRY TO USE IT, IT IS WORKING POORLY. MATT: SO DID THEIR PREVIOUS CURRENCY. ALL OF THESE ARGUMENTS COULD BE MADE ABOUT FIAT CURRENCIES. IF YOU SAY THERE IS NO INTRINSIC VALUE -- STEPHEN: CURRENCY VERSUS INVESTMENT ARE TWO DIFFERENT THINGS AND THEY HAVE OPPOSITE PROPERTIES. FIAT HAS NO INTEREST IN VALUE BUT THERE IS A CURRENCY. KRITI:
YOU ARE ONE OF THE SIGNATORIES ON A LETTER -- URGING THEM NOT TO RESPOND TO CRYPTO FINANCIERS AND LOBBYISTS ARGUING THAT THEY SHOULD NOT CREATE A REVELATORY SAFE HAVEN FOR CRYPTO, HOW WOULD YOU LIKE ROCK -- WASHINGTON TO RESPOND TO WHAT WE HAVE SEEN OVER THE LAST SEVERAL MONTHS? STEPHEN: NUMBER ONE, THEY SHOULD ENFORCE THE SECURITIES ACT AND ALL OF THE CRYPTO EXCHANGES OPERATING DOES NOT SUPPORT -- APPLY TO -- COMPLY TO SECURITIES LAWS. THEY SHOULD ENFORCE ACTION AGAINST AMERICAN COMPANIES SELLING THEM IN THE EXECUTIVE BRANCH SHOULD BRING FOREIGN EXCHANGES THAT ARE OPERATING COUNTER FOR IT U.S. DOLLAR DERIVATIVES AND THEY SHOULD BE SANCTIONED. THEY ARE OPERATING IN A WAY
THAT IS NOT COMPLIANT WITH LOSS --LAW S. KAILEY: THANK YOU FOR GIVING US YOUR TIME AND THAT WAS CRYPTO SKEPTICS STEPHEN DIEHL. MATT: WE WILL DISCUSS THE LEGAL IMPLICATIONS FOR THE CASE AGAINST SAM BANKMAN-FRIED AND FORMER DOJ CYBER DIGITAL TASK FORCE SUJIT RAMAN JOINS US TO TALK ABOUT THAT.
2023-01-05 22:04
