December 3, 2025 • 18 mins
Back in October, Bitcoin reached a record high. Just a few weeks later, its price had plunged, taking out over $1 trillion dollars in assets along with it. On Tuesday, it rallied. But dips across the crypto market have left investors and analysts wondering what to make of the swings.
On today’s Big Take podcast, Bloomberg executive editor stacy-marie ishmael and host David Gura take the temperature of crypto’s dramatic ebbs and flows over the past few months, from President Trump’s second-term moves to bolster the market to fears of another “crypto winter.”
Read more:
- Bitcoin Jumps Back Above $90,000 After Bruising Selloff
- What Does Bitcoin’s Drop Mean? Depends on Who You Ask
- The 26-Minute, 51% Wipeout That Deepened Trumps’ Crypto Woes
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Episode Transcript
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Speaker 1 (00:00):
Were you here for thanksgoing?
Speaker 2 (00:01):
I was working.
Speaker 1 (00:01):
You're working naturally giving all of this markets man Viz.
Bloomberg News Executive editor Stacy Marie Schmaiel worked through the
holiday last week. A lot of her work in the
newsroom involves tracking one of the most volatile markets around, crypto,
and the last few weeks have been a roller coaster.
Speaker 3 (00:21):
The market is eyeing quite nervously. The lows that we
saw over the past couple of weeks pretty pronounced selov
in bitcoin yesterday, today's stabilizing.
Speaker 1 (00:30):
Back in October, bitcoin reached a record high Bitcoin more
than doubling in value over the past year.
Speaker 3 (00:36):
Look at this, you're to date of thirty percent, hitting
a fresh record.
Speaker 1 (00:40):
But just a few weeks later, its price had plunged,
taking out over one trillion dollars in crypto assets along
with it. On Tuesday, it rallied. It was back above
ninety thousand dollars. That's left investors and analysts wondering what
to make of these dramatic swings.
Speaker 4 (00:56):
I don't think the pain is over for crypto.
Speaker 2 (01:00):
There's a selloff, there's always the risk that it accelerates
beyond what a reasonable person might expect. Or when there
is a sudden recovery and people are like, why is
that happening? Nobody really has a good answer.
Speaker 1 (01:12):
So was the latest crypto selloff a wake up call
or just par for the chorus for a volatile market?
I'm David Gera and this is the big take from
Bloomberg News today. On the show What just happened to
the Crypto Market and What can it tell us about
Crypto's future? Stacy Marie Ishmael has been tracking the crypto
(01:41):
market swings closely. Bitcoin is down almost thirty percent from
its October high, but she says it's important to put
that in context.
Speaker 2 (01:50):
We're only really down like ten percent on the year, which,
depending on how you look at the chart, some people
are either having a very good year or a very
bad one, and that really, to me is part of
the story of this asset class. Right. Cryptocurrencies are volatile
by nature. They have long been perceived as a risk asset.
They trade in ways that have been described as chaotic.
(02:13):
They don't have kind of necessarily predictable patterns because people
aren't able to do like corporate cash flow analysis or
whatever those things are. So when there's a sell off,
there's always the risk that it accelerates beyond what a
reasonable person might expect, or when there is a sudden
recovery and people are like, why is that happening? Nobody
really has a good answer, And that's pretty much what's
been going on for the past two months.
Speaker 1 (02:34):
You and your team have been watching all of this unfold.
It ruined your Thanksgiving holiday. At this point, what can
you tell us about why it happened, Why we saw
bitcoin and other cryptocurrencies fall from those sides of just
a couple weeks ago.
Speaker 2 (02:46):
I can tell you what people are telling us. Okay,
so the first thing is going back to this idea
of bitcoin being a risk asset. What are the things
that are supportive of risk assets? A low interest rate environment,
you know, the idea that policies will be accommodating to
people having lots of money to spend on things. And
the very second you have a concern that, say, the
(03:07):
Fed is not going to lower interest rates as quickly
as people hope they might, then folks start to get
a little bit more conservative about their positioning. A couple
of days ago, there was some comments from the Bank
of Japan suggesting that interest rates there might be increasing,
and that had some spillover effect. There's also people who
associate crypto in general, will bitcoin very specifically with the
fortunes of the Trump White House and its policies are
(03:31):
on crypto because Trump was when he was inaugurated, you know,
some of his very first executive orders were perceived as
being very supportive of cryptocurrencies.
Speaker 4 (03:38):
I pledged that we would bring back American liberty and
leadership and make the United States to crypto capital of
the world, and that's what we've done.
Speaker 2 (03:46):
There was this idea of establishing a bitcoin reserve. If
you talk to various people in the industry, they might
say things like, well, you know, legislation hasn't moved as
quickly as we would like, we're not seeing as many
changes as we want, or yes, we got those things,
but you know what else is going to come? Like,
is there anything else that they're going to do? So
all in all, it's been an environment in which there
are not a lot of reasons for people to buy
(04:07):
with high conviction, but there have been a lot of
reasons for people to sell.
Speaker 1 (04:10):
You having lived through downturns in the crypto market before,
does it feel familiar? Does it feel different. We've know
that crypto winter from a couple of years back. Does
it feel eaerily similar?
Speaker 2 (04:21):
The former CEO of failed crypto firm FTX, Sam Bankman Freed,
has been arrested in the Bahamas at the request of
the US government. Just how long is.
Speaker 3 (04:30):
Winter going to ask and how cold is it going
to get? Like how much lower is Bigfooring going to go?
Speaker 2 (04:35):
Well, nobody has filed for bankruptcy, which is a big,
big difference from that time around. And we haven't seen
anybody arrested in the Bahamas and you know, taken taken
into custody. So there are very many elements of this
that are different. And in addition to a much more
shall we say, explicitly constructive policy environment, we also have
(04:55):
the fact that the market structure is different. You know,
cryptoetfs didn't exist in twenty twenty two, and to an
extent they have provided almost an institutional floor because so
many retail investors are interested in these things, they have
them in their four oh one case. We have on
the other side this idea of the digital Ashet Treasury Company,
which kind of existed with micro strategy now called Strategy,
(05:17):
but now you have various other companies that used to
be like e commerce firms saying we want to pivot
and hold bitcoin as our balance sheet strategy. So I
think it's hard to draw an immediate like for like
comparison to what was happening in twenty twenty two. But
I would say until we start to see like real,
this feeling of panic selling as opposed to this kind
of steady burn, then we're still in a very different environment.
Speaker 1 (05:40):
Let me stick with those ETFs because it sort of
lent a level of legitimacy to this market that didn't
have before. Beyond that sort of how has it shaped
the way that this market reacts? Having what about a
dozen of these ETFs, now more than that.
Speaker 2 (05:54):
Forgive me so many more. Our analysts and Bloomberg Intelligence
have a very long spreadsheets of all the different out
style ETFs. Yeah, there's Bitcoin, but there's also like doge
coin and ripple and other things.
Speaker 1 (06:05):
Do they buffet the market?
Speaker 2 (06:07):
Not all of them are very popular. So you know,
the biggest one by far, which does have a very
significant number of assets is ibit, which is from black Rock.
But one of the things that ETFs have done is
introduced a wider range of people to the idea of
having exposure to crypto as an asset class, which is
just a different way of thinking about size. Right. Yeah,
(06:29):
you still have to be the kind of person who
thinks about what you want near four oh one k
and haves like some contact with the financial advisor generally speaking.
But you know, if you didn't want to have to
figure out like how to set up a crypotal wallet,
how to buy bitcoin directly, what's the stable coin? Now
you can just be like, oh, this can diversify my portfolio.
And that was really seen by the industry as a
huge step in that legitimacy that you're describing, on.
Speaker 1 (06:50):
That pathway to normalization or legitimization. A Vanguard, second largest
asset manager, this week announcing that its customers can trade
ATF's mutual funds that crypto heavy on their platform. How
big a moment is is that in the evolution of
this asset class.
Speaker 2 (07:05):
From a narrative perspective, enormous from a didn't have any
major consequences in the crypto price like kind of I
will say that, you know, they have been the last
really big holdout. A lot of people have been just
waiting for the moment in which they would say yes.
And of course this comes after, you know, they have
a new CEO who comes from the world of crypto
ETFs was like part of the team responsible for driving
(07:25):
forward ibit that we just mentioned. So I think that
was kind of one of those things where the news
was not so much that it happened, just that it
happened this week because it was one of those things
that people were very much expecting.
Speaker 1 (07:37):
This is a risk asset class. Risky asset class, I
should say as well, and we've seen what nineteen billion
dollars of leverage bets wiped out over the course of
this sell off. Explain exactly what that means instic terms.
Speaker 2 (07:51):
Imagine you could, you know, take a position on something,
but you do it by borrowing money. So you're like, oh,
I want to make a five dollar bet, so I'm
going to borrow five dollars, So you don't actually have
five dollars. You've borrowed five dollars, and if that bet
goes in your favor like fantastic, like now you have
like five, possibly ten dollars depending on how it structured.
If that bet moves against you, now you owe money
that you didn't have any first place. Don't come for me.
That's a wild verse implications of how these things work.
(08:14):
But generally, it's this idea of people putting up capital
that is, in fact more than they can necessarily comfortably
repay because they were expecting prices to move in a
particular direction and actually those prices moved against them.
Speaker 1 (08:26):
What does that tell you about this market? That there
is a there has been a hearty appetite for risk
of confidence that it's yeah.
Speaker 2 (08:32):
I mean, it just goes back to that idea of
risk assets, right, And for a good chunk of this year,
it was like the narrative was like, you know, Crypto's back,
Bitcoin is back. The entire environment is supportive of it.
So the shift in October where we saw what we
thought was like initially kind of a flash crash because
it was very sudden and very aggressive, but the market
hasn't been able to come back from that, and that
(08:54):
is I think indicative that there might be some repricing
towards a lower level. Right, So if the bulls we're
expecting we enter twenty twenty six at anywhere from one
fifty to one million, depending on how ambitious you are
we're you know, we're kind of closer to ninety right now,
and that may be where we end December.
Speaker 1 (09:10):
I think there's a tendency to focus on Bitcoin, the
og cryptoer the biggest. Has the selloff been across the
board all cryptocurrencies wrapped up in it, or if there
be any standouts that haven't been affected.
Speaker 2 (09:21):
I wouldn't say anybody hasn't been affected. I will say
some things have been hit harder than others. So at
the very very risky, highly speculative end of the market,
you have like the meme coins, right, which are in
the name it's like based around memes. But there have
been two very high profile meme coin launches this year,
one named after the President and one named after the
first Lady, and those have been hammered to an extent
(09:43):
that is in a lot of ways like more intense
than we've seen in other corners of the market. And
we've also seen kind of a similar effect on other
Trump family related crypto properties. Right, We've been tracking the
decline in the shares of American Bitcoin, which is a
cryptomning currency associated with Trump, and so it does feel
like there is something different that is happening with the
(10:05):
kind of the Trump family crypto portfolio as opposed to
the wider market.
Speaker 1 (10:10):
Coming up, how Trump and his family continue to influence
the crypto market, and Stacy, Marie and I dig into
what the president's attempts to prop up the market could
mean for its future. It seems like a lot of
(10:34):
the enthusiasm or wider embrace of crypto was brought about
by the Trumps and the Trump administration taking a different
tack toward digital assets.
Speaker 2 (10:43):
A fair way to.
Speaker 4 (10:43):
Say that with today's signing, the future of crypto and
the crypto industry, the US dollar working together because they
really are hand in hand, is going to be stronger
and bigger and better than ever before.
Speaker 1 (10:56):
Can you just explain sort of what that's meant in
real terms? So we see regulators that are acting maybe
as muscularly as they did during the Biden administration, but
beyond that sort of what has that change in approach
meant for the industry as a whole.
Speaker 2 (11:07):
I think from the industry perspective, sometimes people will say
it was like, oh, act first, apologize after they're just acting,
because there isn't even a need to apologize, right, There
isn't a fear or a concern that someone will launch something,
do something, try something, and they'll immediately be confronted with
like a Wells notice or you know, a regulator being
like just a reminder about prudential regulation. So it certainly
(11:29):
has liberated I would think the approach of the industry
in terms of how quickly they want to launch products,
how risky those products can be. Like one of the
big things that we certainly sow in twenty twenty five is,
you know, if you're a crypto company or a fintech
with any kind of crypto releasing thing, you're like, I
want to ipo, I want to raise money, I want
to get engaged in M and A. Because it's like
this perception was like we have a window. We don't
know how long this window will be open for, but
(11:50):
we're going to take full advantage.
Speaker 1 (11:52):
Can you describe the contours of the galaxy of digital
asset involvement this president and his family have. So you
mentioned American bitcoin, this bitcoin mining company, the Trump mean coin,
the Milennia meme coin. How expansive is it.
Speaker 2 (12:05):
It's very wide ranging, and I think that it's also
not necessarily visible all the time because like Trump media
for instance, which runs the Truth social platform, the messaging
platform choice of the President has arrangements with crypto companies,
famously one called crypto dot com to investigate the launches
of like crypto related ETFs. They're doing things like potentially
(12:27):
getting into prediction markets, which is different from crypto proper,
but I would say ideologically similar in that it's another
mechanism through which people can take different approaches or entry
points into the financial system. Then you know, you have
the World Liberty Financial of which Trump the President is
listed as like the sort of emeritus member of it,
(12:49):
but which is largely run day to day by other
parts of the family, which is working on a stable coin.
They have described themselves as you know, a DeFi, a
decentralized financial platform. So I would say, lots of pies,
lots of fingers in those pies. Not necessarily a lot
of specific economic activity that we can yet point to,
but we're certainly paying attention.
Speaker 1 (13:10):
How big a deal is the Trump family as kind
of a hype machine in this space. So I saw
that Eric Trump was interviewed by Bloomberg News in November
commenting on this dip, and he said, what a great
buying opportunity.
Speaker 3 (13:22):
With crypto comes volatility. Volatility is our friend. Volatility is
something that should be harnessed, right, and so I think
bitcoin is going to continue to massively overperform the markets.
Speaker 1 (13:33):
Does that make a difference when you have a family
that is so heavily invested in this space saying something
like that, is it encouraging others? Is it effectively encouraging
other people?
Speaker 2 (13:42):
To the presidents in the family and everyone associated has
been very explicit repeatedly that there are no conflicts of
interest to be found anywhere in any of this involvement.
At the same time, they have been very high profile,
very visible, very public, explicit exponents of the values of
from parts of this ecosystem, whether from their own personal
(14:02):
investments or you know, one or more of the Trump
sons effectively attending like every cryptoconference of note to talk
up digital assets. And then you have other high profile
members of the administration, including Howard Lutnik, who you know,
his family firm Cantor Fitzgerald very famously was kind of
I think responsible for the turning point in the perception
(14:23):
of Tether, the world's largest table coin company, because you know,
Lutnick came out a couple of years ago and said, like,
tether has the money that it says it has, and
that just changed the game entirely for Tether, and they're
now seeking to raise quite a lot of money at
a very you know, spacexy open Ai type valuation. So
I wouldn't say that there is no effect. It's just
not always that the effect is like as direct as
(14:45):
folks might make it out to be.
Speaker 1 (14:47):
How do you see these assets in kind of the
broader sweep? I remember when there was a lot of
talk about it being an inflation hedge. Now we've kind
of seen it move in concert with risk your tech stocks.
What can digital assets tell us about the overall market?
Speaker 2 (15:02):
I will once again tell you what people say. Certainly
there's an idea that it is an inflation hedge. You know,
one bitcoin is one bitcoin is the phrase that sometimes use.
I do think because bitcoin trades twenty four to seven
and crypto trades twenty four seven, and it's a market
that's open when other markets are closed, it sometimes acts
like a future's market, right that if something happens in
(15:23):
the world that people are either bearish or bullish on,
we will often see a move in crypto that doesn't
feel like cryptospecific, but more like, oh, this is open
and I can trade it. I'm going to do that
and then other markets catch up. That is absolutely a
phenomenon that is well established, it's been happening for a while.
There's real things that are going on there. But I
do think a third is just this general like risk
and sentiment barometer, because it's the kind of thing for
(15:45):
a lot of people where it's not a core part
of your portfolio. Yes, there are hedge funds that are
entirely dedicated to digital assets. You can definitely find a
financial advisor who's like, you're ready, five sure, put all
your money in bitcoin. That is a thing that exists,
but for a majority of investment professionals, it's the kind
of thing where you're like, this is an interesting place
to diversify, and if the rest of your portfolio is
(16:05):
underperforming and crypto is doing well, fantastic. But if crypto
isn't doing well, you might ask, Okay, well should I
put my money in gold or in silver or something
else where you might be seeing better and more immediate returns.
Speaker 1 (16:17):
Uniqueness of this space, this asset classes things can turn around.
Speaker 2 (16:19):
Pretty quickly tomorrow, it might be right, we're.
Speaker 1 (16:22):
Seeing Bitcoin climb higher and Cardana and ether. What does
history tell us about the way rebounds work with cryptocurrencies?
What makes them stay? What makes it not just an
anomals blip where we see them going up after a
huge sell off. What tends to give them staying power?
And how do you think about that in the context
of this particular sell off.
Speaker 2 (16:40):
One of the things that I do in the Bloomberg
terminal is there's a function that lets you like look
at news events versus prices on a chart, and I
spend a lot of time staring at that trying to
figure out, Okay, like what has been driving in crypto.
And it is true that really significant actions that prop
up a certain narrative have helped rallies in the past. Right,
So you know in July of last year, when you know,
(17:03):
Donald Trump goes to a conference for the bitcoin faithful
and says like I want to make the United States
the bitcoin capital of the world, that absolutely precipitated a
run up that you know kind of peaked for a
while in January, or you know, going back two years
when like bitcoin ETFs were approved, or on the other side,
when Sam Backwinfried got arrested and FTX collapsed and we're like, hah,
that doesn't seem good. So right now, what's missing is
(17:26):
this like single thing? So people are like, oh, is
it going to be the vanguard announcement about ETFs? Is
it going to be you know, whoever replaces Dero Powers? Yeah,
And we just haven't seen a big capitalist and we're
sort of running out of days this year for something
really big to happen.
Speaker 1 (17:46):
This is the Big Take from Bloomberg News. I'm David Gerat.
To get more from The Big Take and unlimited access
to all of Bloomberg dot com, subscribe today at Bloomberg
dot com slash podcast offer. If you like this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back tomorrow
Were you here for thanksgoing?
Speaker 2 (00:01):
I was working.
Speaker 1 (00:01):
You're working naturally giving all of this markets man Viz.
Bloomberg News Executive editor Stacy Marie Schmaiel worked through the
holiday last week. A lot of her work in the
newsroom involves tracking one of the most volatile markets around, crypto,
and the last few weeks have been a roller coaster.
Speaker 3 (00:21):
The market is eyeing quite nervously. The lows that we
saw over the past couple of weeks pretty pronounced selov
in bitcoin yesterday, today's stabilizing.
Speaker 1 (00:30):
Back in October, bitcoin reached a record high Bitcoin more
than doubling in value over the past year.
Speaker 3 (00:36):
Look at this, you're to date of thirty percent, hitting
a fresh record.
Speaker 1 (00:40):
But just a few weeks later, its price had plunged,
taking out over one trillion dollars in crypto assets along
with it. On Tuesday, it rallied. It was back above
ninety thousand dollars. That's left investors and analysts wondering what
to make of these dramatic swings.
Speaker 4 (00:56):
I don't think the pain is over for crypto.
Speaker 2 (01:00):
There's a selloff, there's always the risk that it accelerates
beyond what a reasonable person might expect. Or when there
is a sudden recovery and people are like, why is
that happening? Nobody really has a good answer.
Speaker 1 (01:12):
So was the latest crypto selloff a wake up call
or just par for the chorus for a volatile market?
I'm David Gera and this is the big take from
Bloomberg News today. On the show What just happened to
the Crypto Market and What can it tell us about
Crypto's future? Stacy Marie Ishmael has been tracking the crypto
(01:41):
market swings closely. Bitcoin is down almost thirty percent from
its October high, but she says it's important to put
that in context.
Speaker 2 (01:50):
We're only really down like ten percent on the year, which,
depending on how you look at the chart, some people
are either having a very good year or a very
bad one, and that really, to me is part of
the story of this asset class. Right. Cryptocurrencies are volatile
by nature. They have long been perceived as a risk asset.
They trade in ways that have been described as chaotic.
(02:13):
They don't have kind of necessarily predictable patterns because people
aren't able to do like corporate cash flow analysis or
whatever those things are. So when there's a sell off,
there's always the risk that it accelerates beyond what a
reasonable person might expect, or when there is a sudden
recovery and people are like, why is that happening? Nobody
really has a good answer, And that's pretty much what's
been going on for the past two months.
Speaker 1 (02:34):
You and your team have been watching all of this unfold.
It ruined your Thanksgiving holiday. At this point, what can
you tell us about why it happened, Why we saw
bitcoin and other cryptocurrencies fall from those sides of just
a couple weeks ago.
Speaker 2 (02:46):
I can tell you what people are telling us. Okay,
so the first thing is going back to this idea
of bitcoin being a risk asset. What are the things
that are supportive of risk assets? A low interest rate environment,
you know, the idea that policies will be accommodating to
people having lots of money to spend on things. And
the very second you have a concern that, say, the
(03:07):
Fed is not going to lower interest rates as quickly
as people hope they might, then folks start to get
a little bit more conservative about their positioning. A couple
of days ago, there was some comments from the Bank
of Japan suggesting that interest rates there might be increasing,
and that had some spillover effect. There's also people who
associate crypto in general, will bitcoin very specifically with the
fortunes of the Trump White House and its policies are
(03:31):
on crypto because Trump was when he was inaugurated, you know,
some of his very first executive orders were perceived as
being very supportive of cryptocurrencies.
Speaker 4 (03:38):
I pledged that we would bring back American liberty and
leadership and make the United States to crypto capital of
the world, and that's what we've done.
Speaker 2 (03:46):
There was this idea of establishing a bitcoin reserve. If
you talk to various people in the industry, they might
say things like, well, you know, legislation hasn't moved as
quickly as we would like, we're not seeing as many
changes as we want, or yes, we got those things,
but you know what else is going to come? Like,
is there anything else that they're going to do? So
all in all, it's been an environment in which there
are not a lot of reasons for people to buy
(04:07):
with high conviction, but there have been a lot of
reasons for people to sell.
Speaker 1 (04:10):
You having lived through downturns in the crypto market before,
does it feel familiar? Does it feel different. We've know
that crypto winter from a couple of years back. Does
it feel eaerily similar?
Speaker 2 (04:21):
The former CEO of failed crypto firm FTX, Sam Bankman Freed,
has been arrested in the Bahamas at the request of
the US government. Just how long is.
Speaker 3 (04:30):
Winter going to ask and how cold is it going
to get? Like how much lower is Bigfooring going to go?
Speaker 2 (04:35):
Well, nobody has filed for bankruptcy, which is a big,
big difference from that time around. And we haven't seen
anybody arrested in the Bahamas and you know, taken taken
into custody. So there are very many elements of this
that are different. And in addition to a much more
shall we say, explicitly constructive policy environment, we also have
(04:55):
the fact that the market structure is different. You know,
cryptoetfs didn't exist in twenty twenty two, and to an
extent they have provided almost an institutional floor because so
many retail investors are interested in these things, they have
them in their four oh one case. We have on
the other side this idea of the digital Ashet Treasury Company,
which kind of existed with micro strategy now called Strategy,
(05:17):
but now you have various other companies that used to
be like e commerce firms saying we want to pivot
and hold bitcoin as our balance sheet strategy. So I
think it's hard to draw an immediate like for like
comparison to what was happening in twenty twenty two. But
I would say until we start to see like real,
this feeling of panic selling as opposed to this kind
of steady burn, then we're still in a very different environment.
Speaker 1 (05:40):
Let me stick with those ETFs because it sort of
lent a level of legitimacy to this market that didn't
have before. Beyond that sort of how has it shaped
the way that this market reacts? Having what about a
dozen of these ETFs, now more than that.
Speaker 2 (05:54):
Forgive me so many more. Our analysts and Bloomberg Intelligence
have a very long spreadsheets of all the different out
style ETFs. Yeah, there's Bitcoin, but there's also like doge
coin and ripple and other things.
Speaker 1 (06:05):
Do they buffet the market?
Speaker 2 (06:07):
Not all of them are very popular. So you know,
the biggest one by far, which does have a very
significant number of assets is ibit, which is from black Rock.
But one of the things that ETFs have done is
introduced a wider range of people to the idea of
having exposure to crypto as an asset class, which is
just a different way of thinking about size. Right. Yeah,
(06:29):
you still have to be the kind of person who
thinks about what you want near four oh one k
and haves like some contact with the financial advisor generally speaking.
But you know, if you didn't want to have to
figure out like how to set up a crypotal wallet,
how to buy bitcoin directly, what's the stable coin? Now
you can just be like, oh, this can diversify my portfolio.
And that was really seen by the industry as a
huge step in that legitimacy that you're describing, on.
Speaker 1 (06:50):
That pathway to normalization or legitimization. A Vanguard, second largest
asset manager, this week announcing that its customers can trade
ATF's mutual funds that crypto heavy on their platform. How
big a moment is is that in the evolution of
this asset class.
Speaker 2 (07:05):
From a narrative perspective, enormous from a didn't have any
major consequences in the crypto price like kind of I
will say that, you know, they have been the last
really big holdout. A lot of people have been just
waiting for the moment in which they would say yes.
And of course this comes after, you know, they have
a new CEO who comes from the world of crypto
ETFs was like part of the team responsible for driving
(07:25):
forward ibit that we just mentioned. So I think that
was kind of one of those things where the news
was not so much that it happened, just that it
happened this week because it was one of those things
that people were very much expecting.
Speaker 1 (07:37):
This is a risk asset class. Risky asset class, I
should say as well, and we've seen what nineteen billion
dollars of leverage bets wiped out over the course of
this sell off. Explain exactly what that means instic terms.
Speaker 2 (07:51):
Imagine you could, you know, take a position on something,
but you do it by borrowing money. So you're like, oh,
I want to make a five dollar bet, so I'm
going to borrow five dollars, So you don't actually have
five dollars. You've borrowed five dollars, and if that bet
goes in your favor like fantastic, like now you have
like five, possibly ten dollars depending on how it structured.
If that bet moves against you, now you owe money
that you didn't have any first place. Don't come for me.
That's a wild verse implications of how these things work.
(08:14):
But generally, it's this idea of people putting up capital
that is, in fact more than they can necessarily comfortably
repay because they were expecting prices to move in a
particular direction and actually those prices moved against them.
Speaker 1 (08:26):
What does that tell you about this market? That there
is a there has been a hearty appetite for risk
of confidence that it's yeah.
Speaker 2 (08:32):
I mean, it just goes back to that idea of
risk assets, right, And for a good chunk of this year,
it was like the narrative was like, you know, Crypto's back,
Bitcoin is back. The entire environment is supportive of it.
So the shift in October where we saw what we
thought was like initially kind of a flash crash because
it was very sudden and very aggressive, but the market
hasn't been able to come back from that, and that
(08:54):
is I think indicative that there might be some repricing
towards a lower level. Right, So if the bulls we're
expecting we enter twenty twenty six at anywhere from one
fifty to one million, depending on how ambitious you are
we're you know, we're kind of closer to ninety right now,
and that may be where we end December.
Speaker 1 (09:10):
I think there's a tendency to focus on Bitcoin, the
og cryptoer the biggest. Has the selloff been across the
board all cryptocurrencies wrapped up in it, or if there
be any standouts that haven't been affected.
Speaker 2 (09:21):
I wouldn't say anybody hasn't been affected. I will say
some things have been hit harder than others. So at
the very very risky, highly speculative end of the market,
you have like the meme coins, right, which are in
the name it's like based around memes. But there have
been two very high profile meme coin launches this year,
one named after the President and one named after the
first Lady, and those have been hammered to an extent
(09:43):
that is in a lot of ways like more intense
than we've seen in other corners of the market. And
we've also seen kind of a similar effect on other
Trump family related crypto properties. Right, We've been tracking the
decline in the shares of American Bitcoin, which is a
cryptomning currency associated with Trump, and so it does feel
like there is something different that is happening with the
(10:05):
kind of the Trump family crypto portfolio as opposed to
the wider market.
Speaker 1 (10:10):
Coming up, how Trump and his family continue to influence
the crypto market, and Stacy, Marie and I dig into
what the president's attempts to prop up the market could
mean for its future. It seems like a lot of
(10:34):
the enthusiasm or wider embrace of crypto was brought about
by the Trumps and the Trump administration taking a different
tack toward digital assets.
Speaker 2 (10:43):
A fair way to.
Speaker 4 (10:43):
Say that with today's signing, the future of crypto and
the crypto industry, the US dollar working together because they
really are hand in hand, is going to be stronger
and bigger and better than ever before.
Speaker 1 (10:56):
Can you just explain sort of what that's meant in
real terms? So we see regulators that are acting maybe
as muscularly as they did during the Biden administration, but
beyond that sort of what has that change in approach
meant for the industry as a whole.
Speaker 2 (11:07):
I think from the industry perspective, sometimes people will say
it was like, oh, act first, apologize after they're just acting,
because there isn't even a need to apologize, right, There
isn't a fear or a concern that someone will launch something,
do something, try something, and they'll immediately be confronted with
like a Wells notice or you know, a regulator being
like just a reminder about prudential regulation. So it certainly
(11:29):
has liberated I would think the approach of the industry
in terms of how quickly they want to launch products,
how risky those products can be. Like one of the
big things that we certainly sow in twenty twenty five is,
you know, if you're a crypto company or a fintech
with any kind of crypto releasing thing, you're like, I
want to ipo, I want to raise money, I want
to get engaged in M and A. Because it's like
this perception was like we have a window. We don't
know how long this window will be open for, but
(11:50):
we're going to take full advantage.
Speaker 1 (11:52):
Can you describe the contours of the galaxy of digital
asset involvement this president and his family have. So you
mentioned American bitcoin, this bitcoin mining company, the Trump mean coin,
the Milennia meme coin. How expansive is it.
Speaker 2 (12:05):
It's very wide ranging, and I think that it's also
not necessarily visible all the time because like Trump media
for instance, which runs the Truth social platform, the messaging
platform choice of the President has arrangements with crypto companies,
famously one called crypto dot com to investigate the launches
of like crypto related ETFs. They're doing things like potentially
(12:27):
getting into prediction markets, which is different from crypto proper,
but I would say ideologically similar in that it's another
mechanism through which people can take different approaches or entry
points into the financial system. Then you know, you have
the World Liberty Financial of which Trump the President is
listed as like the sort of emeritus member of it,
(12:49):
but which is largely run day to day by other
parts of the family, which is working on a stable coin.
They have described themselves as you know, a DeFi, a
decentralized financial platform. So I would say, lots of pies,
lots of fingers in those pies. Not necessarily a lot
of specific economic activity that we can yet point to,
but we're certainly paying attention.
Speaker 1 (13:10):
How big a deal is the Trump family as kind
of a hype machine in this space. So I saw
that Eric Trump was interviewed by Bloomberg News in November
commenting on this dip, and he said, what a great
buying opportunity.
Speaker 3 (13:22):
With crypto comes volatility. Volatility is our friend. Volatility is
something that should be harnessed, right, and so I think
bitcoin is going to continue to massively overperform the markets.
Speaker 1 (13:33):
Does that make a difference when you have a family
that is so heavily invested in this space saying something
like that, is it encouraging others? Is it effectively encouraging
other people?
Speaker 2 (13:42):
To the presidents in the family and everyone associated has
been very explicit repeatedly that there are no conflicts of
interest to be found anywhere in any of this involvement.
At the same time, they have been very high profile,
very visible, very public, explicit exponents of the values of
from parts of this ecosystem, whether from their own personal
(14:02):
investments or you know, one or more of the Trump
sons effectively attending like every cryptoconference of note to talk
up digital assets. And then you have other high profile
members of the administration, including Howard Lutnik, who you know,
his family firm Cantor Fitzgerald very famously was kind of
I think responsible for the turning point in the perception
(14:23):
of Tether, the world's largest table coin company, because you know,
Lutnick came out a couple of years ago and said, like,
tether has the money that it says it has, and
that just changed the game entirely for Tether, and they're
now seeking to raise quite a lot of money at
a very you know, spacexy open Ai type valuation. So
I wouldn't say that there is no effect. It's just
not always that the effect is like as direct as
(14:45):
folks might make it out to be.
Speaker 1 (14:47):
How do you see these assets in kind of the
broader sweep? I remember when there was a lot of
talk about it being an inflation hedge. Now we've kind
of seen it move in concert with risk your tech stocks.
What can digital assets tell us about the overall market?
Speaker 2 (15:02):
I will once again tell you what people say. Certainly
there's an idea that it is an inflation hedge. You know,
one bitcoin is one bitcoin is the phrase that sometimes use.
I do think because bitcoin trades twenty four to seven
and crypto trades twenty four seven, and it's a market
that's open when other markets are closed, it sometimes acts
like a future's market, right that if something happens in
(15:23):
the world that people are either bearish or bullish on,
we will often see a move in crypto that doesn't
feel like cryptospecific, but more like, oh, this is open
and I can trade it. I'm going to do that
and then other markets catch up. That is absolutely a
phenomenon that is well established, it's been happening for a while.
There's real things that are going on there. But I
do think a third is just this general like risk
and sentiment barometer, because it's the kind of thing for
(15:45):
a lot of people where it's not a core part
of your portfolio. Yes, there are hedge funds that are
entirely dedicated to digital assets. You can definitely find a
financial advisor who's like, you're ready, five sure, put all
your money in bitcoin. That is a thing that exists,
but for a majority of investment professionals, it's the kind
of thing where you're like, this is an interesting place
to diversify, and if the rest of your portfolio is
(16:05):
underperforming and crypto is doing well, fantastic. But if crypto
isn't doing well, you might ask, Okay, well should I
put my money in gold or in silver or something
else where you might be seeing better and more immediate returns.
Speaker 1 (16:17):
Uniqueness of this space, this asset classes things can turn around.
Speaker 2 (16:19):
Pretty quickly tomorrow, it might be right, we're.
Speaker 1 (16:22):
Seeing Bitcoin climb higher and Cardana and ether. What does
history tell us about the way rebounds work with cryptocurrencies?
What makes them stay? What makes it not just an
anomals blip where we see them going up after a
huge sell off. What tends to give them staying power?
And how do you think about that in the context
of this particular sell off.
Speaker 2 (16:40):
One of the things that I do in the Bloomberg
terminal is there's a function that lets you like look
at news events versus prices on a chart, and I
spend a lot of time staring at that trying to
figure out, Okay, like what has been driving in crypto.
And it is true that really significant actions that prop
up a certain narrative have helped rallies in the past. Right,
So you know in July of last year, when you know,
(17:03):
Donald Trump goes to a conference for the bitcoin faithful
and says like I want to make the United States
the bitcoin capital of the world, that absolutely precipitated a
run up that you know kind of peaked for a
while in January, or you know, going back two years
when like bitcoin ETFs were approved, or on the other side,
when Sam Backwinfried got arrested and FTX collapsed and we're like, hah,
that doesn't seem good. So right now, what's missing is
(17:26):
this like single thing? So people are like, oh, is
it going to be the vanguard announcement about ETFs? Is
it going to be you know, whoever replaces Dero Powers? Yeah,
And we just haven't seen a big capitalist and we're
sort of running out of days this year for something
really big to happen.
Speaker 1 (17:46):
This is the Big Take from Bloomberg News. I'm David Gerat.
To get more from The Big Take and unlimited access
to all of Bloomberg dot com, subscribe today at Bloomberg
dot com slash podcast offer. If you like this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back tomorrow
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Sarah Holder
Saleha Mohsin
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