Bitcoin and ether dip to end the week, and crypto firm Consensys sues the SEC: CNBC Crypto World

Bitcoin and ether dip to end the week, and crypto firm Consensys sues the SEC: CNBC Crypto World

today Bitcoin continues to stall at the
$63,000 level crypto firm consensus sues
the SEC over ethereum regulation an
investment strategist Lyn Alden weighs
in on how cryptocurrencies stack up
against wall Street’s performance is
macroeconomic pressures weigh on
investors
Minds welcome to cnbc’s crypto world I’m
T mck cryptocurrency is under pressure
as we head toward the weekend by noon
Eastern Bitcoin was down by a little
less than 1% at the $63,000 level while
ether edged lower by 1.3% to trade at
about
$3,100 salana fell 3.5% to
$142 today’s losses helped push Bitcoin
lower for the week adding to its monthly
slide of about 10% ether is slightly
higher for the week but still about 15%
off its recent highs and pacing for a
monthly
decline okay let’s talk about the top
stories consensus a major backer of the
ethereum blockchain filed a lawsuit
against the SEC in order to quote defend
the ethereum ecosystem the crypto firm
claims the SEC is seeking to regulate
eth as a security even though eth Bears
none of the attributes of a security and
that it participated in regulatory
overreach the suit also claims the SEC
has wavered on ethereum’s classification
as a security the lawsuit revealed that
consensus received a Wells notice from
the SEC earlier this month in that
notice the agency said it intended to
bring enforcement action against
consensus for allegedly violating
Federal Securities laws through its
metamask swaps and metamask staking
products by offering its metamask wallet
software according to the filing the SEC
believes consensus acts as a broker and
offers and sells Securities even though
the software doesn’t hold customer
assets or carry out transactions in a
blog post yesterday Joseph Lubin the CEO
of consensus and an ethereum co-founder
called the lawsuit an important step
towards preserving access to the
ethereum blockchain the agency declined
to comment on the lawsuit next stripe is
bringing back crypto payments by
allowing users to accept stable coins
for online transactions in a post on X
yesterday the co-founder of stripe John
Collison announced that the company will
start supporting Global stable coin
payments this summer he said
transactions instantly settle on chain
and automatically convert to Dollars the
company said it’s starting with usdc
stable coins and that payments will be
available on the salana ethereum and
polygon blockchains and a note address
at Stripes Global Internet economy
conference cison said crypto is finding
real utility and that with transaction
speeds increasing and cost dropping
crypto is quote finally making sense as
a means of exchange this announcement
comes six years after the payments firm
dropped support for Bitcoin citing the
token’s notoriety for volatile price
swings and a lack of efficiency in
making everyday transactions and finally
the European Parliament has adopted new
rules targeting money laundering the
laws include Provisions that allow
direct and free access to National
Registries of financial information
institutions like crypto asset managers
would be required to conduct enhanced
due diligence and report suspicious
activities to financial intelligence
units in the region on top of that a new
agency called The Authority for
anti-money laundering and countering the
financing of terrorism would be
established although the law was adopted
by Parliament the EU Council still needs
to formally adopt the rules before
they’re published in the eu’s official
Journal all right going back to markets
for our main story I spoke with Lyn
Alden founder of Lyn Alden investment
strategy and board director of swan
Bitcoin for insight on bitcoin’s
performance in the face of macroeconomic
pressures plus she weighs in on what
could drive the cryptocurrency’s next
rally let’s dive right into it Bitcoin
has been trading in a narrow range all
month what do you make of that and what
do you think could drive it higher again
either above 7dk which is kind of the
ceiling it’s been uh which has been its
ceiling for the last month or so or even
further to you know its recent highs
from March so I think it’s natural that
after an asset goes up uh very quickly
in price that it has to kind of cool off
or consolidate for a period of time um
so I think that’s totally normal um in
general I think that Bitcoin is likely
going to follow measures of global
liquidity uh and so whenever the dollar
Index is pretty strong or money supply
growth slows down these kind of anti-
liquidity actions that generally puts a
pretty good amount of headwinds against
Bitcoin and that’s what that’s what
we’ve been seeing over this past month
um you know the market is pricing out
some of the rate Cuts they’ve seen
because of uh increasing inflation
expectation um there there’s been a bit
of a flight to safety because of
geopolitical issues and so all of that
kind of pressures assets that are very
tied to liquidity including Bitcoin it’s
not the only variable but it’s a big
variable so I would expect probably
chopping around in a range for a while
longer um but when you look out 12
months or more I expect probably to see
higher liquidity and to Bitcoin have
have followed up uh during that time
frame and I’m pulling it back to what’s
happening in the short term we had a big
Market day yesterday US economic data
showing a sharp slowdown in growth and
pointed to persistent inflation so there
were a big declines in all of the major
stock indexes but Bitcoin was pretty
resilient so what did you make of
bitcoin’s performance given the stock
market date we had yesterday so I I try
to be careful reading into any one-day
periods but in general uh one thing I
would point out is that you know us US
Stocks um there’s really a couple major
components that that make them uh behave
a certain way in a period of time one is
the expectation of their forward
performance which is heavily tied to
economic performance and then the other
one is the valuation component so
basically what is the discount rate that
you’re comparing them to if yields are
going higher um in in a vacuum that can
put pressure on some of the equity
valuations and so that combination of
weak economic data but still sticky
inflation data uh is kind of the worst
case scenario uh for expensive equities
because it keeps the pressure on their
valuation side it keeps it keeps the
yield pressure on but it also um reduces
uh expectations around what they might
earn over the next call it 12 months or
more um whereas Bitcoin uh and and also
assets like gold basically these these
kind of hard money assets they are still
tied to the discount rate so what you
can get on a real basis with things like
treasuries for example um that that
affects them that’s why liquidity uh and
other measures of of things like that
are a big impact on those assets but
they’re not as tied to economic
performance in the US or any other given
country and so if you do see signs of
stagflation then assets like Bitcoin um
especially if it’s not you know it’s not
overbought in the near-term sense that
might be an interesting asset to to look
into I think that I think the market is
assessing that out um but you know
there’s multiple things that can move
Bitcoin it’s still small enough that you
know individual announcements of
Institutions getting into it or legal
action on certain Bitcoin related
Services these things can still move the
price because it’s a fairly small um
still volatile asset but those things of
of e economy liquidity and then Market
specific information all all affect it
actually really good context for my next
question which is about correlations so
we look at stocks and gold a lot gold in
the last year especially and we’ve seen
from Bitcoin that it can that it can and
has behaved like both of those assets um
so you know I guess the question is how
do you see it at the moment and what’s
the likelihood that Bitcoin has a
delayed reaction um and you know stocks
kind of finding their footing again
today but what is the likelihood that
you think Bitcoin has a delayed reaction
um and could turn down the way stocks
have been so I think it can turn down
for any variety of reasons but generally
Bitcoin doesn’t really have delayed
reactions if anything it usually has
early reactions uh because it has 247
liquidity it can trade over weekends it
can trade over the middle of the night
um it tends to have reactions that if
anything precede what we see in the
stock market so I wouldn’t really expect
a delayed reaction from this
particularly uh but that that doesn’t
exclude other things that could make the
price go down um and you know in general
it it’s important to remember that
Bitcoin is a global asset
um it’s not just traded in the US it’s
traded uh in exchanges around the world
it has buyers and holders from around
the world much like gold in that sense
and so um it it can have periods of time
where it does seem very correlated to US
Stocks but then other times where the
market regime is entirely different and
stocks could be faing could be facing
stagflation issues and things like that
while things like gold or Bitcoin could
be going up in price because they’re
they’re a global asset and there have
been periods of time where North
American buyer were the were the key
drivers of Bitcoin price there are other
times where uh European buyers or Asian
buyers uh maybe because of economic
conditions or liquidity conditions in
their own region they they tend to be
the primary buyers um and so I I think
it’s you can’t extrapolate too much from
any kind of given correlation um other
than over the long term it’s not
particularly correlated um to to US
Stocks um the best correlation I found
between bitcoin price and anything else
is is basically measures of global
liquidity uh which means the dollar
Index and the rate of money supply
growth are all fairly important inputs
to to what Bitcoin is probably expected
to do over any given 12-month period
even then that’s not guaranteed um and
so and another factor to keep in mind is
that if you have two assets that you
know usually go up on the same day and
usually go down on the same day absolute
performance still matters right so for
example if you compare say Bitcoin to to
Arc ETF for example on average they
probably go up or down um in tandem more
often than not but then over a 3 to five
year period there ends up being a big
performance gap between Bitcoin and and
Arc and that’s not to pick on that
particular ETF but basically although
correlations are important at the end of
the day you want absolute returns as
well so you want to invest you want to
invest in the in the best- of class
asset for that particular um portfolio
slice and so I I view Bitcoin as uh not
only a good performing asset but that
one that is tied to Global liquidity and
is not necessarily Cor related to other
other uh portfolio
assets okay that’s all for crypto world
this week we’ll be back again on Monday
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, Lyn Alden, founder of Lyn Alden Investment Strategy and board director of Swan Bitcoin, provides insight into bitcoin’s performance in the face of macroeconomic pressures.

Chapters:
00:00 – CNBC Crypto World, April 26, 2024
0:25 – Bitcoin dips
0:56 – The headlines
3:44 – Investment strategist Lyn Alden

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Bitcoin and ether dip to end the week, and crypto firm Consensys sues the SEC: CNBC Crypto World