Today crypto prices crater alongside Global Financial markets we ask Matt Hogan the chief investment officer at Bitwise Asset Management to break down The moves and what could be coming Next welcome to cnbc's crypto world I'm TAA mckel crypto markets getting hit With a steep sell-off to Kickstart the Week following a sharp drop in financial Markets around the globe by noon Eastern Bitcoin shaved nearly 8% off its price Tumbling all the way down to the $554,000 mark the cryptocurrency Actually recovered from the worst of the Pullback at one point it was trading Below $50,000 meanwhile today's flight from Risk assets also hitting ether which Fell 133% in the past 24 hours salana Dropping more modestly to $130 in terms of impact on publicly Traded crypto Focus stocks you've got Exchanges like coinbase and miners like Riot and Marathon digital all following Between 2.8 and 4.3% by around midday Clean spark though a big outlier falling Around 12% all of the mining stocks at One point down double digits earlier in The morning now some experts joined CNBC This morning to weigh in on the crypto Selloff while on cnbc's Squawk Box today Fund strats Tom Le pointed to the Japanese Market as one driver of the Overall Market selloff taso's co-founder
Kathleen Brightman also weighed in on What could be behind crypto tumble I Think basically what we're seeing is Something similar to what happened at The beginning of covid where um folks Get a sense of something that looks like A recession and the first thing they Decide to sell is their pretend internet Money I think Bitcoin gets a bit of a Shellacking because it's uh you know Definitely cast more as a um speculative Currency it's not treated the same as a Lot of other equities now backing out For just a moment to look at the year so Far the recent drop in prices has eaten Into both Bitcoin and ether's gains for 2024 but both are still in the green Bitcoin has risen 28% since January While ether lags the S&P 500 having Gained only 8% in that time at one point This morning ether did erase its Year-to-date Gain all right sticking with markets as We jump right to our main story I spoke With Matt Hogan CIO of bitwise asset Management about today's crypto route And where he thinks the market could be Headed Next this route uh in Risk assets crypto No Stranger obviously to volatility or To 30% drops in a bull market but you Know it is kind of different every Year as Bitcoin matures more and more so On a day like this what does a selloff
Like this mean to you and you know what Is your message to investors yeah it's Great to be back you know I see this as An opportunity what's stuck in my mind This morning is this feels exactly like March 12th of 2020 which was the last Time we had a coordinated Global Sell-off in capital markets that was the Day of course we realized that covid was Impacting the global economy in a Massive way way the Dow fell 2 2400 Points and crypto fell sharply Bitcoin Fell 37% that day and everyone hemmed And ha isn't it supposed to be a risk Asset isn't supposed to be a hedge but Guess what happened in the year that Followed it Rose more than 10x back Above $57,000 I see the same thing here we Have a global Capital Market selloff That impacted the crypto Market on a low Liquidity weekend but nothing has Changed fundamentally about Bitcoin or About crypto to except that we're closer To the FED lowering rates we're closer To quantitative easing I see that as More of a catalyst than a headwind so I Look at today as painful but an Opportunity to position for the long Term unsurprisingly and you've probably Gotten this question as much as I have But the first thing people want to know Is about that narrative they see that Bitcoin and crypto related stocks are
Going down with the broader stock market And this is really supposed to be a time Supposedly that Bitcoin bucks the trend So what do you say to that and you know Perhaps the question is for whom for What type of investor is Bitcoin a hedge Against uncertainty let's call it or Maybe over what time I mean actually Remember if you go back pre- Bitcoin Like 2008 financial crisis when that Crisis really hit home guess what Gold Sold off at that time people will sell Anything that's liquid during a market Crisis the fact that this this crisis Hit on a weekend when most markets were Closed of course people would reach to Crypto to sell it was the only outlet They had I don't think it changes Longterm I think it is a great hedge Asset during times of uncertainty if You're willing to hold it for more than A day for months for quarters for years That's what we've seen during every Previous crisis it always falls people Always Panic about whether it's a hedge Asset or not and then every time it has Recovered and played its role you know They teach you in finance that this time Is different are the four most expensive Words in investing and that's true in Bitcoin as well this time is not Different of course we sold off with Risk assets and I believe we will Rebound in the future is that historical
Price Performance what investors should kind Of be hanging on to then um I mean Certainly there are people out there who Really want to try to make sense of this Sometimes it is correlated to gold and Sometimes it's not sometimes it's Correlated to stocks and would your Advice be to just look at that Historical price performance or is there Something more to say about how Bitcoin Can be all of these different things at The same time and it's a new thing it's A challenge to have something that's Both an emerging technology and Therefore a risk asset and also Something that is a natural hedge Against chaos or at least the Government's response to chaos which is Always to print money and it's both of Those T things at the same time and that That sort of blows people's minds but if You look historically how that plays out The way it plays out is pretty simple Over a very shortterm period it behaves Like a risk asset and over longer Periods of time it plays that role as a Hedge if you look since covid the Dollar's lost 25% of its value Bitcoin Is up hundreds of percent it's done a Great job protecting you against the Inflation that followed Co did it do a Great job every single day absolutely Not if that's what you want you need an
Inverse position in the S&P 500 but if What you're looking at is to protect Your savings your retirement your Investments over a year over five years Over 10 years bitcoin's track record is Exceptional and I think you just have to Be willing to hold those two things in Your mind at the same time which I know Is challenging even I wrestle with it But at least that's what history teaches You is True um okay so what happened here we've Talked about the significance and we've Gotten a little bit philosoph iCal but What exactly happened here in my sense Is that this is obviously primarily Macro driven there are of course little Things happening within crypto but what Does what do the events of the last 72 Hours look like from where you were Sitting yeah so from a short-term Perspective you have to ask yourself Have we hit the bottom right because Often what happens in crypto is that Pullbacks feed on themselves you see the Market drop and that causes Liquidations In the Futures market and the market Drops more and maybe a firm or two gets Into trouble and blows up and eventually It exhausts itself and gets to the Bottom so I don't think we know for sure If we've gotten to that bottom or not Certainly liquidations have slowed down But these effects sort of take you know
Multiple days to see if we've hit that Bottom I think from a Trader's Perspective that's what I would do watch Liquidations and watch the stability of Firms once that clears the thing to Monitor is do we see sort of central Bankers and institutions moving in to Open the the sort of spigots do we see Fed rate Cuts come in faster than Previously expected do we see global Bankers around the world cutting rates Do we see sort of quantitative easing Measures that's the Playbook and to Separate those two the short-term Question because it can feed on itself We don't know if we've hit bottom yet And then the long-term catalysts and Just evaluate those separately and I Think you'll be Okay what are your clients saying you Have these new crypto ETFs that began Trading this year have you heard from Your clients are they panicked yeah it's Amazing we've had very few calls today So far from clients I think people who Allocate to crypto using the ETFs have a Few percent of their net worth in crypto And they know that it's a volatile asset At least for bit wises clients in our Bitcoin ETF bitb or eth ETF eth W They're buying it for the long term Expecting it to be volatile in fact if You look at bit wise's history we've Been around for seven years we had
Inflows in 2018 that was a terrible Year From crypto crypto is a high conviction Small allocation bet for most investors So I suspect what you'll see out of These ETFs is remarkable stickiness I Don't think you're going to see massive Outflows I think you might even see some Small inflows over the course of the Next two weeks because these investors Are making long-term bets in an asset That they know is volatile and guess What we're reminded of that again today It sure is volatile but let's look at it Over a longer time period we know and You've said in this conversation that The setup is still strong the thesis has Not Chang so uh given everything going On do we still do we still retest Bitcoin's record this year and do we get A new all-time high still this year yeah I still think we're going to all-time Highs this year uh the things that could Prevent that is if we see sort of the Democratic side of the presidential Ticket leaning hard into the anti crypto Stance but I don't think that's what We're going to see I think we're going To see that side of the ticket Moderating the other side of the ticket Is pro crypto and so I think we're going To get a relatively positive result in November as long as that happens I think We're heading toward new alltime highs In fact we might sort of go higher than
I expected if we see a strong policy Response so you know I'd say that's the Bias but of course there are still risks Out there in the Market okay that's all for crypto world Today as always you can keep up up to Date with the latest crypto price moves At cnbc.com we'll be back again tomorrow And we'll see you then [Music]
