Bitcoin. We have to talk about Bitcoin because what
a session that we're having, it's up 3% also
gained every single day this weekend. That's been enough
to break Bitcoin out of that range that we've been
talking about for weeks. Now. You look at
Bitcoin currently above$47,000 a coin on its way to
48,000. We'll see if it can continue to build
on this momentum. But tim that line has been
up into the right all weekend. Well let's get
more on Bitcoin with Eddie Vander wal he's deputy managing
editor for markets live here at Bloomberg, He covers
all things commodities, precious metals, crypto and more
. Eddie. We just heard from Katie about the
moves that we've seen in Bitcoin over the weekend.
It had been stuck in this narrow range for months
Right now. It's actually at its highest point since
December 28, 2021. What was it that finally
triggered it to get out of that range. You
know, it's always really hard to say, what
is that one thing that sits behind any particular move
in? Bitcoin? Bitcoin is so unpredictable, but
we definitely saw some whale activity over the weekend.
We saw this talk of of one of the,
one of the older wallets that was, You know
, hasn't seen any activity since in almost 10 years
. We saw some flows from there and that's just
the sort of thing that gets people a little bit
excited when they see when they see, but also
what we're seeing here is that the higher rates hasn't
really heard tech stocks and Bitcoin obviously has been more
correlated with tech stocks over the last few months or
so. And really just seeing that, that the
higher rates hasn't heard tech stocks and therefore there's momentum
for Bitcoin coming back a little bit. And so
Eddie, I want to focus on that correlation that
you mentioned because it's been a really weird time trying
to dissect all the different things. You know,
you would expect tech to respond to rate, you
would expect crypto to respond to tech. I mean
, are those correlations starting to come apart a little
bit or does the path of Bitcoin still really depend
on what the NASDAQ 100 is doing right? I
think it does. I think Bitcoin is a fairly
good indicator of where momentum is right and where sentiment
is for things like tech stocks. But often Bitcoin
these days are leading, leading the game so over
the weekend, if I if I check if I
want to know what what sand sentiment is going to
be on monday, then I check what Bitcoin is
doing on sunday and that gives me a good leading
indicator of what investor sentiment is and how they're willing
to take on a little bit more risk. So
yes, but at the same time, you want
to be careful and not look at Bitcoin as a
proxy for because you know, they are driven by
different sets of investors and what we saw here was
that Bitcoins, you know, it's really getting his
momentum back as it breaks through those significant levels and
at the same time tech stocks is kind of lackluster
. Okay, well let's talk higher rates here.
Eddie as Katie mentioned higher rates. They do of
course hurt tech stocks more. So though the high
flying tech stocks and I'm wondering in this inflationary environment
, not just here in the U. S.
But around the world where we see central banks tightening
and we do see the bond market reacting with the
bond selloff and rates going higher. Why aren't those
biting Bitcoin? Yeah, you know that's really interesting
because people were saying to us, okay, there's
a lot of people with leveraged exposure to Bitcoin,
so higher rates should mean that they can't take as
much exposure to Bitcoin and that they would have to
pare back their exposure, but we're not really seeing
that. And really Bitcoins have reacted in a very
different way than for instance gold, which is a
pure inflation edge and does very poorly when when real
rates start to rise. Bitcoin at the moment seems
to be a lot more driven just by momentum and
by by by investors looking for for for alternatives to
stocks which aren't looking particularly great at the moment,
the bond market which is not looking particularly great and
commodity markets that are extremely volatile. And Eddie I
want to talk about the fact that Bitcoin is going
up, how important is that for Bitcoin to continue
going up, walk us through momentum and what it
means in the crypto landscape particularly. Okay, you've
absolutely nailed it. I think that's for me,
that's the big one, right? I think Bitcoin
, Bitcoin loves momentum. There's, there's some assets
that drive, drive purely on fundamentals and there's,
there's some assets that go, you know where the
investors, where the investor attention is and what we
see with something like Bitcoin, we call them Veblen
goods, right? When the price goes up,
people talk about them, people get excited about them
, People tell their family over dinner and they tweet
about it when Bitcoin goes up, it attracts more
attention, more people write about it and that puts
momentum into the price and more people hear about it
and more people want to buy in and I think
that's what we're seeing here. We had that narrow
range in which we were stuck for so long as
it breaks above that, the headlines come back?
So, Bitcoins are the highest in a year or
whatever and then you just see the investor flows coming
back into the market. What about when it comes
to other Kryptos Eddie before we let you go,
what should an investor audience be keeping their eye on
? Absolutely, you're you're you're you're definitely going to
see things like doggie coin, like in theory and
all of these, they do tend to get attention
when Bitcoin does well. Right, So you see
so Bitcoin is sort of the thought leader in the
space, certainly the price leader in the space and
when when Bitcoin rallies those will amplify the moves.
When Bitcoin sells off, it will be the same
. But I think if you want geared play on
Bitcoin, Bitcoin isn't volatile enough for you, then
you know, some of the some of the smaller
cryptocurrencies may deliver that excitement you're after.