Aug 25, 2023

Bitcoin is trading around $26,000 ahead of U.S. Federal Reserve Chair Jerome Powell's speech at Jackson Hole.

Video transcript

Bitcoin is trading around $26,100 ahead of Fed chair Jerome Powell's speech at Jackson Hole. Joining us now to discuss the crypto markets is the Director of Strategy and Business Development for the Tie, Sasha Gabali. Welcome to the show show, Sasha. Hello, great to be here. Thanks for having me. Great to have you here. Now, let's talk about this speech that everyone is waiting for from fed chair Jerome Powell at Jackson Hole. Um What do you expect to hear? How, how might this affect what's going on in the macross sphere? Yes, I think, I think there's a lot of uncertainty around that speech because as we've seen, the inflation has been tamed recently, it's gone back down to three or 3.2%. Um I don't think it's still can be called a win for the fed of taming inflation in the long term. So I think a lot of the speech is going to be around this around what the position of the FED is. Are they changing their approach? And frankly, because Bitcoin has been trained very much as a risk on asset. A lot of this, I think is going to be impacting the crypto markets. Tell us a little bit more about how you, how you see um Bitcoin being impacted by the macro market, maybe give, give us your short term outlook. Yes. So I think there is the macro outlook on the one hand where Bitcoin as a risk on asset means if the rates keep increasing or stay at the very high level where they are currently, that market parts haven't been used to for decades. It means that it's going to create a lot of competition. And so basically all risk on assets including technology stocks and obviously crypto which is even riskier are facing a lot of competition and actually tend to to go down, right? So, so that's, that's the beginning of the macro level. The second thing is, I think there is a lot of tension in the market around the all the EF applications we keep seeing more and more TF applications. There was even one more recently by ARC Invest and 21 shares. And I think a lot of market person try to position themselves to capture any market movement around information coming in from that. Now, I see you've noted here that Bitcoin has been trading around its 200 day moving average talk to us about why that's significant. So when you look historically, right? And obviously, that's, you know, the past information can't really always inform what the future prices will be. But if you look historically, Bitcoin trading below its 200 day moving average has been correlated with a market in a bare state, right? So there is a this is where you're seeing that there is a lot of tension, there's been low volatility and the to markets. And I think there's a lot of expectation of at some point some kind of catalyst that would trigger a bull run. And I think that's, that's what what people are seeing in that 200 moving average being high compared to, to the, the the price points is waiting for, for this as a bullish sign. What do you think that catalyst is gonna be if you have to make a prediction? Well, I think these days there is so much around the ETF applications, I think to be to be, to be frank, I do think there is this is rife for overreaction of the markets. But when you think about all what is going on in the application, there is a lot of optimism with the acceptance of the potential acceptance of a spot Bitcoin ETF and maybe the market is not expecting that much downside, right. So there's this sort of asymmetry of potentially huge upside if there is an approved, an approved ETF or a set of ETFS, because we know that most likely they would come in in a, in with a few ETF, not just one single ETF. Um and the downside may be a bit lower. So that's, that's where, um, I think a lot of market partici are trying to position themselves. We've done a lot of work at the time and really being ready to have all the possible sources where that information could come first so that we'd be the first one to, to grab that information. And I think that that's really what's top of mind these days. That's the spot. Bitcoin ETF. We also have this Ether futures ETF um that is possibly on the horizon. We saw the price of Ether react to that announcement as the markets were selling off late last week. Um What are your thoughts on the potential of an Ether futures? ETF here in the US? I think that's exciting. I think it's uh um you know, there's been a lot of chatter around is Ether at risk of being designated as security, especially with uh you know, the, the the changes that have been done in the uh the supply of um in the past couple of years. Um It's, it's really interesting to, it's gonna be really interesting to see where the value cruel happens for Ethereum. And because because when you think about it, when you try to have a more fundamental quantification of the value of those tokens, Ether does have real cash flows. And so trying to see how those cash flows accrue to the to the value of Ether, I think is what a lot of people are looking at and, and you know, having more and more people being able to access those types of investment will, will definitely um increase the the demand. All right. And lastly, I got to ask you about a recent JP Morgan report, JP Morgan uh says that they see limited downside for the crypto markets in the near term after analyzing that open interest in the Chicago mercantile exchanges, Bitcoin futures that shows that the unwinding of long positions appears to be in its end phase rather than its beginning. What do you, what do you think of this? Do you agree with that statement? I think, I think it's a fair statement. There's been a lot of questions in the market of what happened last week and we saw the announcement by space that they were writing off their Bitcoins, but that's maybe more of an accounting artifact. And so I think that's why that article really labels it as a catalyst in the move. But we've also seen a very big moves recently from paypal, from Visa, right? A lot of again, activity around the TF applications coming up. And so I think that's where really the the asymmetry that this article brings up is right, there is so much potential for broader adoption mechanism and maybe not as much outlook for um for a big market crash, right? And that's what they're looking as well in the, in the options market, right? If um if a lot of people are trying to sell the market or if they're trying to position themselves on the longer side. And that's um what the market thinks happened last week, which is a lot of people trying to position themselves on the long side that got liquidated. All right, Sasha, we are going to have to leave it there. Thanks so much for joining the show and have a great weekend. Thank you. That was Director of Strategy and Business Development for the Thai Sasha Gabali.

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