Aug 14, 2023

Bitcoin (BTC) is trading flat near the $29,300 level as investors react to the news that FTX founder Sam Bankman-Fried was sent to jail ahead of his October trial over attempts to tamper with witnesses.

Video transcript

Bitcoin and Ether are trading pretty flat after a relatively uneventful weekend for crypto. Joining us now to discuss this is Athena head of research and data Connor, writer, welcome Connor. Hey Lawrence, thanks for having me. Glad to have you on. So, uh we haven't seen much movement in the majors and Bitcoin. You see a potential here for the ALTs. Are we seeing that necessarily in market dominance? What's going on uh for the ALTs the like? So she knows some of these uh uh you know, more meme coins, things like that. Yeah. Well, look for, yeah, we're seeing kind of open interest for eyes for she, but we're seeing a bit of interest start to pick up. But as far as all coins are concerned, really, I think if we're going to see any movement in all coins, we really need to see a Bitcoin or Ethereum led rally to start with. Um and I think we're a while away from that. Obviously, there's a lot of old coins that kind of have securities regulatory risk overhanging them. Um But yeah, as I said, we're going to need to kind of see a Bitcoin or Ethereum price move, which we just have an ad over the last two or three weeks. There's actually been remarkable lack of volatility really in markets, which is, which is pretty crazy for crypto assets to be honest. But um I think what we're seeing is kind of investor apathy starting to seek to seep into markets right now. Investors are kind of looking around for that next catalyst, whatever that may be. Um Otherwise they'll kind of keep their money on the sidelines. We're seeing that just in like retail volumes in July was the lowest um in terms of monthly volume we've seen since November 2020. Um last Friday, in fact was a, was a low for Bitcoin volume this year daily volume. And so yeah, we're kind of seeing that a bit into markets right now and there's a handful of catalysts that could lift us out of this. But otherwise we're kind of, yeah, we're expecting, I guess more subdued markets in the near term until one of those catalysts hits. So some of the catalyst, you know, we keep talking about a potential Bitcoin ETF for for a few weeks away from knowing whether or not that will happen. But we're also seeing in the process, um the adoption of stable coins by paypal. Uh are those, are those two things that can coexist or does one kind of take the thunder from the other? In other words, if we see paypal adopt stable coins does that sort of take away this interest and excitement around a, um, Cryptocurrency that can be used across borders? I mean, here you have paypal that would create a, or, you know, basically sponsor a, a stable coin that could be used to cross borders. I, you know, I guess, I guess the question is, does the paypal News offset? Actually the ETF news, does it actually have a little bit of a, an injury to it rather than a uh a help? I don't think so. I think the two can coexist pretty easily. Um And basically because I think they target two different sectors of really crypto markets. And if we take the paypal first, that I think is really great for like retail adoption, right? That's been talked about obviously ad nauseum for the last few days, but paypal has over 400 million users that all those users are getting on boarded into the, right. It's tough to remember a bigger kind of on board moment for crypto. Um And if you were to ask for like a web two centralized issuer that would back a stable coin and put their name behind. But paypal is arguably one of the better ones to, to do they obviously payments as their bread and butter stable coins have long had issues with having access to kind of payment rails, right? So usually stable coins and crypto are kind of used for buying other crypto assets on exchanges whereas now we're actually seeing a new kind of market being opened for stable coins as payments, right? So um if you take ebay, for example, 70% of ebay transactions use paypal. So now all of a sudden, you've got about 70% of ebay transactions have the option to use stable coins. And so that's and then obviously you have the on and off around the capabilities of paypal. Crypto is also long struggled. And especially lately with fiat and off ramps, we've seen particularly some us exchanges struggle um to kind of and we've seen them temporarily suspend us d deposits and withdrawals. Now this hopefully solves a large portion of that those issues. Um So that's the kind of paypal side of things and that's really great for retail adoption. I have other views on whether or not the staple coin actually moves the needle itself um in terms of kind of centralization worries. But then if you take this O ETF, that's kind of targeting a whole another sector of the market, in my opinion, really, it's targeting investment funds institutions that currently so basically what we have now is futures. ETF S and futures ETF S essentially is a good way to kind of light your money on fire in terms of paying fees, paying fees to middle men. And the average kind of essentially when you have expiring futures like these futures. ETF S are built upon, you have to roll into a new contract once that expires and there's historically been premium and that's paid for essentially in fees. So you're looking at about 10 to 12% fees for futures ETF S and compared to actually holding the actual spot ETF itself, so there'd be a big improvement for the institutions there. And that should see a kind of new wave of, of, of institutional money coming in. And if you look at the kind of futures ETF S right now, they just underperform Bitcoin. So year to date the top um Bitcoin Futures ETF is pro shares and they, the year to date their performance being 45% compare that to Bitcoin 75%. So we're near, we're nearly seeing them by 30% under performance there with futures ETF S. So no institution really, that's where their money is happy about investing in that futures. ETF whereas the spot TF will see them kind of their interest peaked, I guess so. No, to go back to your original question to me, they kind of they're responsible for two different sectors of the market. One is great for kind of retail adoption and one should be really good for institutional adoption as well. Connor, thank you very much for joining the show this morning. Happy Monday. Thank you guys. Thanks for having me. That was Athena's head of research and Data Conor Rider.

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