Today Bitcoin continues to move higher 10 the week Ben McMillan of idx digital Assets weighs in on this week's Wild Ride for crypto and resi co-founder Ben Lenthal explains how his new web3 Project would allow for diners to pay For meals in Crypto welcome to cnbc's crypto world I'm Talia Kaplan major cryptocurrencies In the green to end a wild week of Trading with Bitcoin climbing more than Half a percent in the past 24 hours but Falling below $60,000 as of noon Eastern Ether jumped nearly 2% to more than $2,500 salana however fell nearly 6% now Starting yesterday and into this morning Major cryptocurrencies resumed their Rebound from the big sell-off earlier in The week with Bitcoin topping $60,000 now the market has been trying To find its footing after it sank on Monday as the unwinding of the Yen carry Trade deleveraged markets and US bond Yields rallied on worries of recession Bitcoin briefly fell below $50,000 after Trading near $70,000 the week before Recession worries first kicked in last Friday following the weaker than Expected July jobs report now for the Week Bitcoin is down 4 and a. half% as Of noon on pays for the cryptocurrency's Second straight negative week after Falling nearly 8% last week and ether is Down nearly 15% on Pace for its worst
Week since November 11th 2022 when FTX Filed for bankruptcy taking a look at Crypto Focus stocks most are in the red To end the week with the exception of Coinbase which ticked Higher by more Than half a percent as of noon however Coinbase is still down more than 5% week To date on Pace for the Stock's third Straight weekly Loss for more on crypto's volatility This week I spoke with Ben McMillan Chief investment officer of idx digital Assets he weighs in on what was behind This week's selloff and what to expect In the coming Weeks what a week it has been we kicked It off with crypto markets getting hit With a steep selloff amid a sharp drop In financial markets around the world Some analysts attribute this week's Sell-off to heightened recession fears And escalating tensions in the Middle East just to name a few reasons at one Point on Monday Bitcoin was trading Below $5,000 for the first time in six Months as the week progressed Bitcoin Recovered some of those losses now Yesterday Bitcoin and ether surged with Bitcoin climbing back above $60,000 and this morning Bitcoin Maintained that level Now the rise in crypto prices coincided With a rally on Wall Street following New labor market date out yesterday
Which boosted investors confidence in The US economy so I want to start off by Asking you what you think what's behind This week's selloff and I'm also curious To get your take on what's causing Markets to turn around now yeah you know The big culprate of course was you know The so so-called Japanese carry trade um You know when Japan increased their Rates last week um their Benchmark rate A lot of people are expecting 10 basis Points they came in quite a bit hotter Than that and you know markets were Starting to unwind because a lot of People over the years have been Borrowing in Yen because the cost of Carries very low and they've been buying Risk assets abroad including places like The United States and so it doesn't take A lot of increase in that cost of you Know financing those positions to Basically Force an unwind so that was What contributed to the you know rapid Sell-off that we saw over the weekend You know when you look at crypto in Particular you know the crypto markets Of course are no stranger to excess Liquidity we've been talking about this For you know literally years at this Point especially in the Asian markets And that was even further exacerbated Among crypto you know there were some Large liquidations happening over the Weekends you know Saturday Sunday into
Monday which I think is why we saw you Know Bitcoin kind of Wick below that $50,000 Mark and you know as you said a Lot of that was predicated on you know Not just the carry trade unwinding but Renewed concerns about a global Recession um that has since Abad Somewhat this week as you mentioned the Job numbers came in you know A Little Bit Stronger Than People expected but It's definitely there's still macro Weakness um you know we've seen you know A big bounce back in Risk assets you Know crypto in particular a lot of that Is also liquidations on the short side You know even even yesterday we've seen Them I think in the last 24 hours Roughly hundred million of you know Liquidated shorts and so you know it's a Real test here technicals matter for Bitcoin um you know if you look at the 200 day moving average which is you know Very popular Benchmark for a lot of risk Assets but you know crypto as well you Know it's trading right around that Level six you know 60 to 62,000 is kind Of the important you know resistance Level that if you know if investors want To see sustained upside I think you know Bitcoin's got to break through that Otherwise you know there remains risk to The downside so the drop in prices this Week has eaten into bitcoin's gains for 2024 but Bitcoin is still in the green
With the cryptocurrency rising about 43% Since January as of this morning what's Your outlook for bit point in the coming Months do you think we'll see those Record highs we experienced back in March above $73,000 once again and if so What would it take I think it's Certainly achievable the big question is Is exactly what you said what would it Take so I think there's kind of you know A few things to consider the first of Course is whether or not you know we do Fall into a recession historically this Is something we've been keeping a close Close eye on this entire year if you Look historically it's not necessarily When the yield curve inverts that kicks Off the recession clock it's when it Starts to De invert that the recession Is is near and that's where we are right Now so that's something to keep an eye On you know unemployment of course is is What everybody's been focused on um you Know those were the concerns I think Earlier with the jobless claims you know If you look under the hood of the Jobless claims it's not necessarily as Strong as a lot of people think you know A lot of full-time jobs have been Replaced by two part-time jobs that Isn't great for the US consumer and by The way talking about the US consumer You know they're historically stretched You look at default rates across credit
Cards Autos even increasingly homes That's ticking up and so you know that's A big con concerned because you know any Kind of any kind of recession is going To you know manifest in a risk-off trade As it relates to you know things like Crypto things like you know High Multiple tech stocks so that's the key Thing to keep an eye on you know the Other one I think is election um you Know specifically as it relates to Crypto you know last time you and I Spoke just a couple of months ago you Know we talked about the impact that These crypto packs these super packs Were having in um the crypto Lobby were Was having on you know Congressional Races and you know that continues I Think you know with the Republican rally Trump came out with a very Pro crypto Stance you know there's been talk about Even a potential you know uh National Treasury for Bitcoin I think there's a Lot of hurdles to that but I think the Fact that that conversation is even Seriously being had is actually quite Quite bullish for crypto long term um And even you know if you look at the Democrats you know that have Historically have not been that friendly To crypto the Harris Camp has started Reaching out to you know different parts Of the crypto Community to kind of get Up to speed so I think I think that's
Good sign that politicians irrespective Of where they are in the political Spectrum are starting to take crypto Seriously I think that's good longer Term for things like regulary Clarity You know even the legislative backdrop Um you know and then the other one too Is you just look at you know where we Are and you know bitcoin's adoption Cycle and it continues to increase you Know of course the launch of the black Rock or you know spot Bitcoin ETFs you Know several months ago but in you know In particular Black Rock getting into The game along with bigger names like Fidelity that's good from from a crypto Adoption perspective you know that Starts to kind of mainstream the asset Class A lot of people who wouldn't have Seriously considered in the past are now Starting to look at it in the context of Broader portfolio asset allocation Decisions so all of those are very Constructive for Bitcoin longer term in The near term of course you it's really The macro considerations but I would not Be surprised to see all-time highs in The you know the back half of this year And it certainly will be very Interesting to see if that happens Sticking with crypto ETFs obviously Bitcoin and ether are gaining background After that selloff earlier in the week And what was different for crypto from
Prior sell-offs was that many more Investors were vulnerable to the newly Launched spot crypto ETFs in fact this Week analyst said Bernstein said in a Note that unlike previous Cycles when it Was harder to invest in Bitcoin through Crypto exchanges Bitcoin ETFs are now Live and highly liquid trading around $2 Billion a day the analysts wrote that They expect more wirehouse approvals Into Q3 and Q4 thus providing further Onramp for asset allocation to bitcoin Do you agree and how do you think spot Crypto ETF investors in the US were Impacted by this week Selloff yeah that's kind of been the you Know the the million-dollar question is To look at how this cohort of investors Would behave in an environment like this You know the joke on on you know online Of course is you know anybody that's Been in crypto as a as you know as a Holder for any kind of length of time You know these this type of volatility Is just you know matter of course but Now of course you know now all of a Sudden we've had as I said you know more Of Main Street starting to get into Crypto with these spot ETFs and this is A lot of volatility um you know more Than a lot of them are used to and I Think we've seen that contributing to More buying and selling people getting In people getting out more volatility in
The flows you know the great irony in All of this is we've been asked for Years going back to 2019 if we thought Volatility would subside in this asset Class as investors started moving in Particularly institutional investors and We said no we thought it could actually Be the opposite um because as you know As this becomes easier to trade um you Know on things like exchange traded Funds it lends itself more towards Active trading not unlike we've seen With things like volatility ETFs or etps So um and if you look at the Profitability you know the implied Profitability or cost basis of a lot of These newer vintage buyers you know it's Right around this level too um so it's It's interesting to see how ETF flows Have kind of responded to this Volatility I don't think volatility is Going to go anywhere I think in fact if Anything we're going to see it increase Within this asset class potentially um But again you know longer term that On-ramp into this asset class is going To be I think supportive of prices but It's going to be a bumpy ride in I you Know in any Direction all right for our main story Crypto world's TAA mckel caught up with Resi co-founder Ben lenthal earlier this Week to discuss his new web3 startup Blackbird Labs last week the restaurant
Loyalty platform founded by lenthal Announced the launch of Blackbird pay Which is a system that will allow Participating restaurants to accept Payment in Crypto I'm very excited to talk about This new app um I actually used it over The weekend in advance of this interview Um I loved it and so I'm excited to hear From you about it so to begin tell our Viewers a little bit about it and Specifically what problem it is you're Trying to solve with it well Blackbird Is a loyalty and payments app and Platform built for the restaurant Industry built to connect restaurants And guests directly we think that There's been an erosion of this Relationship between guests and Restaurants there's lots of technology And lots of apps that have inserted Themselves in the relationship and the Intimacy that used to define Relationships between guests and Restaurants the sort of the intimate Magic that happens when you become a Regular or you find a restaurant you Love and you connect with somebody there It's largely gone away and we think There's a real opportunity to restore it To essentially restore that magic of Restaurants um and while doing so Improve some of the economics that uh That restaurants face can you go a
Little bit further on the economics what Exactly does the restaurant gain um from Signing on to the platform yeah well the Most the most direct thing uh in terms Of economics is processing so today Processing in restaurants is very Expensive the premium credit cards Especially charge really high fees to Restaurants 3 and a half% um give or take for a Swipe we think that's extremely Expensive for a transaction when Somebody's sitting there in the Restaurant having food on the plate Being present um it's a lot of money um For that transaction restaurant margins Are very low to begin with so that to us Creates an opportunity so simply the Economics are better when you process With Blackbird they're closer to 2% um For the restaurant and how was it that You were able to ensure those lower fees Well we are doing two things one is in The short term we're making an Investment in the restaurant industry um We're funding some of the processing Against those premium credit cards but Our long-term Vision here is to build a New processing Network so some of the Transactions we're processing already Today we're processing in fact on the Blockchain and we're moving money from Consumers to restaurants at extremely Low cost um but this is obviously a
Long-term bet as I said consumers are Wedded to the the kinds of cards the Things they used to pay today we know That some of those transactions are Going to be expensive in the short term But in the long term we strongly believe That we can build a network specifically For the restaurant industry where Blackbird can have a really good Business and we can help restaurants Improve their margins which blockchain Is this built on we're building this on Base why did you choose base we like Base for a bunch of reasons we like Generally speaking the partnership we Have with coinbase Bas and the bass team Jesse and and his team at Bas really I Think share our vision for what the Blockchain can do and how it can unlock Opportunities of all kinds um for Companies like Blackford and for and for Industries like the restaurant industry But you know practically speaking other Than generally the partnership we like The we like the potential speed and um Robustness of the network and the cost That we can process transactions how Many restaurants in the network current And uh if you could give me to the Extent that you can share sort of the Road map that you're working with from The time that you came up with this idea To now um how large has that Network Grown and over what period of time and
At what um speed so we are um not Necessarily sharing real time numbers About restaurants but what I will tell You is that we've grown the business More than 10x since we started about a Year ago and we plan on being above a Th000 restaurants by the end of the year Primarily in New York and San Francisco now you'll be able to check Out more of those interviews with Lenthal and McMillan over at cnbc.com Cryptoworld okay that's all for this Week but we'll be back again on Monday And we'll see you then [Music]
