Major altcoins sink amid broader crypto pullback: CNBC Crypto World

Major altcoins sink amid broader crypto pullback: CNBC Crypto World

today Bitcoin slips below the $65,000 Mark for the first time in more than a month Brian Dixon of off the chain Capital breaks down what’s pushing crypto prices lower along with what Catalyst he’s looking forward to welcome to cnbc’s crypto world I’m TAA mck Bitcoin falling alongside the broader crypto Market this morning by noon Eastern it was back below $65,000 for the first time since May ether also moving lower than this morning still trading above $34,000 though and the madic token falling with other altcoins too down to 55 now Market experts I spoke to really pointed to geopolitical issues and General market pressures you’ve got the elections here in the US and around the world macroeconomic uncertainty That central banks around the globe are fighting and the fact that trading volumes are just historically lower in the summertime crypto Quant also says that there’s little downside for Bitcoin right now but there’s also little bullish sentiment on the upside now this all goes back to something we’ve been hearing for a while now that it might take some time before Bitcoin hits new all-time highs those factors are also hitting altcoins with salana xrp and meme tokens like Dogecoin also taking losses as investors pivot from riskier positions I wrote about the crypto market today and current investing Trends you can head over to cnbc.com cryptoworld to read more all right let’s jump right into our main story with the recent decline in prices for Bitcoin and other cryptocurrencies I chatted with Brian Dixon CEO of off the chain Capital about what’s pushing the crypto Market lower and what could turn things around Bitcoin back under $65,000 today for the first time in more than a month what is driving this you know it’s it’s been on kind of a downtrend so it wasn’t like a sudden drop or anything but what is driving things right now and where do you see things going from here I actually think where Bitcoin is standing today is quite normal for where it should be a few months after the having in my experience so I’ve been in the space since 2012 and I think the way that things are moving right now in the volatility is actually quite normal a lot of times people don’t really understand the difference between price and value but one of the things that we use is models to help us understand what that price could be at a given point in time um one example would be trend line analysis which actually indicates that Bitcoin should be worth over $148,000 today uh stock to flow is another model that says Bitcoin should be worth over $100,000 today and the Bitcoin power law model says Bitcoin should be worth around $71,000 today so if you look at these models it actually indicates that Bitcoin is very undervalued from where it should be at today so you really got to know the difference between price and value the price is going to move around but what is the value of Bitcoin some people think it’s worthless other people think it’s Priceless um I’m in the camp that over time I believe it’ll be proven out that Bitcoin is a Priceless technology but as the price moves around it’s going to be very volatile and we will see in time but you know you really have to understand that difference between price and value we have a bunch of new investors in the market this year after the launch of ETFs talk to me about the different narratives that are at play right now and what investors are focused on um you know the the models and the charts and the trends and the technicals I love how they take me away from the narrative and kind of just you know give me a fuller picture of what’s going on but what are some of the key narratives that you’re following right now I think some of the key narratives in regards to what investors are thinking with the ETFs is you know what’s going to happen next so we had some tremendous inflows early on when the ETFs were launched earlier this year and I think we’re going to see a much larger amount of allocations happen towards the tail end of this year and early next year and the reason I think that is because if we look at the biggest allocators in the world these are sovereign wealth funds and pension plans foundations it can take them 8 to 12 months or longer just to accomplish the due diligence on making an investment so first they’ve got to do their research and do their due diligence then they’ve got to move through their investment mandates and investment committees then they have to educate their clients and then the allocations happen so a lot of these big allocators are still in this process because these ETFs were just launched earlier this year so that’s going to take them time to move forward with this so they can actually get everything ready and the INF structure set up and all of their boxes checked before they can actually make these allocations so if we look at it from that perspective the largest allocations in my opinion in these ETFs haven’t even occurred yet and it will likely be later this year early next year another very important narrative that I think people need to pay attention to is how the political Tides have changed recently so before the Democratic party was very anti- crypto and now we’re seeing Trump that’s being very Pro crypto saying he wants to build a crypto Army we’re seeing RFK Jr who’s very Pro crypto as well well the Democratic party is starting to change their tune as well that’s a huge narrative shift coming from the current Administration and I think that’s going to be a very big topic with this being an election year and as that continues to play out we have a lot of single issue voters there over 50 million crypto holders in the United States and a lot of these people are single issue voters so if you don’t support crypto you will not get the vote and so with that I think it’s going to be such an important political competition and who can be the most supportive to this emerging technology and asset class to Garner those votes that’s a really important narrative to pay attention to as well it’s been uh amazing to see crypto in the spotlight when it comes to watching these two campaigns um and their messaging as as a catalyst for the price of Bitcoin how much weight do you give the upcoming election so Bitcoin historically has gone through its own Cycles regardless of the election or not uh usually 12 to 18 months following the Bitcoin having cycle is the best time to be exposed to the space and that’s to generated all the performance so this has happen independent of an election so when we add the ETFs on top of that which creates an easier onramp for people to get exposure to the asset and we add things like a change in political party that could be much more supportive to the asset I think that’s just going to amplify the performance of what could happen in time now with that something I think that’s very important to look at is that if we have new Administration take office that’s also likely going to shake up The Regulators right because when a new president takes office he’s going to change who he wants to be at the helm of these different organizations and that’s what we’ve seen historically and so if that occurs that could actually be a very favorable thing for the digital asset space and so if we do see that change in administration I would look at that as a large net positive to the space as well let me go back to ETFs for a sec um last week we saw the ETFs break a streak of 20 consecutive days of inflows and now we’ve had three consecutive days of outflows uh you know we’ve we’ve been talking about the drivers and the price action and price versus value how do you look at the flows of ETFs versus the movement of the price what do you make of the recent action that we’ve seen with the inflows and the outflows and where do you see that going I actually think it’s pretty normal I mean when you’re when you’re looking at the asset there’s always going to be the risk on asset investors in the space that are going to be trying to trade around different events and different sentiments and different narratives but I think the volatility is completely normal um let’s look historically at Bitcoin so Bitcoin in Bull markets typically drops 20 to 30% multiple times through a bull market cycle right so if we look back to 2017 bull market Bitcoin dropped 20 to 30% over 10 times and still reach new all-time highs and then in the 2020 2021 bull market Bitcoin dropped 20 to 30% for times and then still reach new alltime highs so without the volatility you don’t get the performance and I think this is a feature not a bug and most of the volatility happens on the upside and generally people aren’t complaining on volatility when it happens on the upside they’re trying to protect against the volatility on the downside and if we look at Bitcoin compared to Amazon back in 2000 I mean Amazon dropped 80% several times and look where that organization is today so I really think that Bitcoin is going through price Discovery where the world is trying to really understand what the technology is worth some people think it’s worthless like I said before some people think it’s Priceless we’re seeing some of that sentiment with the shifts in the ETF outflows and inflows that in my opinion is mostly risk on investors and Bitcoin long term I do not think is a risk on asset Bitcoin is a store of value it is a uh insurance from War I think it’s a very very important asset that the vast majority of the world still does not understand but as people begin to comprehend what Bitcoin actually is I think we’re going to see much more steady inflows in the long term and then final thing for me let’s look at altcoins for a second uh big down moves in the altcoin market today uh is it that Bitcoin is leading here and we’re just seeing kind of outsized moves from the alts or is there a different Catalyst here so I think that’s one potential Factor historically altcoins are more volatile than Bitcoin they always have been so one thing to consider is that Bitcoin now has a significant back stop with these ETFs so Bitcoin should be more stable it’s also a lot easier to access Bitcoin with the ETF you can just log into your traditional brokerage account you can invest with a click of a couple buttons it’s very easy and streamlined it has a new easy on ramp to get exposure to it so that’s also that that really ease of use back stop with it but logically altcoin should be more volatile because it’s a lot more challenging to get exposure to altcoins for most people and when you think about the market cap of crypto around 55% of the entire crypto market cap today is Bitcoin and it’s the deepest and most liquid market so things outside of Bitcoin are generally just going to have more volatility for the very fact that Bitcoin makes up the vast majority of the market anyway [Music]

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, Brian Dixon of Off The Chain Capital discusses the factors behind bitcoin and other cryptocurrencies’ recent pullback.

Chapters:
00:00 – CNBC Crypto World, June 18, 2024
0:20 – Cryptocurrencies pull back
1:35 – Brian Dixon of Off The Chain

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Major altcoins sink amid broader crypto pullback: CNBC Crypto World