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The past few years, crypto has been on a wild ride. Back in twenty twenty one, Bitcoin was on fire. It hit an all time high of almost sixty nine thousand dollars. The market was hot. People were making fortunes almost overnight, raking in millions of dollars from their crypto investments. Celebrities like Steph Curry, Larry David, and Tom Brady were all over TV making funny cameos and ads. Listen to how breezily they plug FTX as a safe and easy way to invest in crypto.
This is Steph Curry, the world's leading expert on cryptocurrency. I'm not and I don't need to be with FTX. Everything I need to buy, sell, and trade crypto safely, it's FTX. It's a safe and easy way to get into crypto.
Yeah, I don't think so. Not a trade trade. I'm a trading crypto.
Ftxs safest and easiest way to buy and sell crypto. It's the best way to get in the game.
Crypto got so big, other markets started experiencing a kind of crypto glow.
There's like some fun spillover effects into other parts of the market that have nothing to do with bitcoin.
That's Stacy Marie Ishmael. She's a crypto expert and an executive editor on Bloomberg's Markets team.
When crypto prices are really rallying, the secondary market for watches like super takes off, so many people are like, ooh, a protec Philip, that sounds nice, or you know, you see this in real estates in places like Miami and Singapore. Seemed to be correlated to how the bitcoin price was doing, because again there was this wealth effect for people who had substantial holdings of this token.
And then the market came crashing down. The price of bitcoin went from almost sixty nine thousand dollars in November of twenty twenty one to around sixteen thousand dollars one year later. People said crypto was dead and then signs of life.
I mean, we're pretty much back to exactly where we were in November twenty twenty one.
Bitcoin is back. In the past few weeks, it's been hitting all time highs and many say this is just the beginning. Today on the show, is crypto really on a rocket to the moon this time? Or are we on the brink of another Bitcoin bubble. I'm Sarah Holder, and this is the big take from Bloomberg News. Stacy Marie. You've been tracking cryptocurrency for years, from when it was on the fringes of financial markets to when it started
dominating Super Bowl ads. Was there a particular moment when you realize crypto had gone mainstream?
Crypto goes mainstream every for years. You know, this is not a linear progression necessarily. This is more like a series of peaks and troughs. And you know, in the most recent period, I'd say it was when a bunch of celebrities would go on morning talk shows and talk about their bored ape non fungible tokens like that was that was a strange time, you know. And Justin Bieber was like, have you seen my monkey?
Like, okay, right, so Paris Hilton NFT era. Yeah, this was another brief but iconic feature of the last crypto boom. Justin Bieber and Paris Hilton were among many celebrities going online and on talk shows to talk about how they use crypto to buy digital art. Listen to how proudly and casually Hilton talks about buying an NFT. This picture of a Monkey's ape.
It's really cool. Like the shad that was when a lot of people were like, what is this? You know, what are we seeing here? But it was certainly not the first time that something like that had happened. I think this was just the most mediagenic moment.
What was it like for you as a crypto reporter during that moment where people cornering you at parties trying to get advice?
Yeah, there were there was sort of two reactions whereas like what do you do? I cover crypto and they were like, oh my god or oh my god. Those were the only two options. And you know. September eleventh, twenty twenty one, was the day that El Salvador made bitcoin legal tender alongside the dollar, and just a couple of months later was when bitcoin reached its first all time high of close to sixty nine thousand.
Dollars and then the fall.
So November twenty twenty one all time high November twenty twenty two, Sam Bankment freed and FTX file for bankruptcy. You can News of the Last fifteen minutes or so FTX finding for Chapter eleven bankruptcy.
The company's controversial chief executive, Sam bankment, freed, resigning a CEO and will remain.
And so it was a very it was a real shock to the cryptosystem to have this person who again was perceived by quite a lot of folks as you know, the next phase of bringing crypto mainstream and was regularly spotted having lunch with legislators and was flying around the country being like, this is the future. And then you know, they were like, oh, by the way, we're filing for bankruptcy. That was not an ideal set of circumstances for an acid class that was really trying to build its credibility.
Things got even worse a few months later when the US government was like, and also, we're accusing you of multiple very serious crimes. So, you know, that was kind of an institutional shock to the system for a lot of folks who had been persuaded that this acid class had really matured and had reached a stage of being trustworthy, to have that image really crumble before their eyes.
Right, that's a huge shift from again Paris Hiltan hawking her NFT to Sam BigMan free declaring bankruptcy and getting pulled into a courtroom in front of a jury of his peers after the break, Crypto is back, but is history going to repeat itself? We're back, and so is crypto. When we left off, SBF was on trial and crypto was imploding. The price of bitcoin took a dive from almost sixty nine thousand dollars down to sixteen thousand dollars.
People had lost their savings, investors were running for the hills, and all of the celebrity endorsers had gone quiet. Some of them were even getting sued. So how did crypto come back from that? How did it recover?
It started to recover when one of the if not the largest asset manager in the entire world, a company, a firm called Blackrock, did something relatively innocuous, which would send an email to the SEC being like, we would like to get your approval to have something called an exchange traded fund that would be backed to buy bitcoin. And if you are not a finance reporter, that is
like not an exciting set of woods. But if you are a finance reporter or somebody who was paying close attention to the kinds of things that drive mainstream adoption of assa classes, you're like, whoa to That was your reaction as a as a finance editor one hundred percent. I was like, guys, like, what are we doing like
file stories? You know, we had had a sense for a long time that this particular type of fund would be the next big thing for bitcoin's perception, as this is the kind of asset that people can have some faith and credibility to invest in. There had been other types of similar funds launched before, but this particular one
was really seen as the test. And the reason it was seen as the test is because it would require the most important US financial regulator of the Securities and Exchange Commission, to effectively say, yes, you can move forward and do this particular thing. And that's exactly what the
SEC did in January twenty twenty four. And so between Blackrock making that first step in that direction and kind of giving at the veneer of we are a very large, very reputable, extremely well regulated financial services company, we think now is the time for this, and the SEC, through a complex series of events, eventually getting to the point of saying okay, fine, you can all go forward with
this thing. That's when you know, the bitcoin price really started to aggressively recover back to where it was in the highs of November twenty twenty one.
It's I'm still kind of trying to wrap my head around how crypto has come back so completely and why financial institutions are lining up behind it now, because it wasn't just that crypto's price fell during the collapse, right, It seemed like there was kind of a huge societal rupture with crypto, Like it was all smoke and mirrors and there was this trial going on, and how did the currency come back from a blow like that and win the trust of the financial institutions.
I think a few things are happening at the same time. One is financial institutions are very good at deciding this is how we're going to make money, which is a different thing from saying we think this is a good idea. And that nuance is important because you know, I covered the financial crisis, and at the time before it was a crisis, financial institutions were saying subprime mortgages wrapped into other things and then resold it's a great way to
make money. This is working super well for us, until it didn't work super well for them, and the SEC when it was saying okay, y'all can go ahead and offer this particular kind of product took multiple sentences of By the way, we're not actually approving of bitcoin. We just want to be real clear. This does not imply endorsement of this underlying thing we think this product. Okay, fine, the courts are telling us that we have to do
your own research quote unquote. And so for folks who are trying to say, well, if Blackrock is doing it or Fidelity is doing it, that must mean that something fundamental has changed about the market. No, the thing that has changed about the market is that these financial services firms have like run the calculations the risk reward and have said, with these appropriate caveats, we are finding that there's enough demand for this particular thing to make it
worth our while. Does that mean suddenly that a token issued by somebody who you have no idea who they are or where they're based, and it's called something like dog with hat is you know, the type of investment that you should like bet your savings on. Those are not equivalents. But it's definitely in the interests of certain folks in the market to argue that those are equivalents. And if you listen really carefully, which is my job, if you listen really carefully to what a lot of
folks in traditional finance are saying. They're much more measured, right, They're not kind of arguing that this is a fundamentally like transformative moment in crypto. And then you have CEOs like Jamie Diamond of JP Morgan, whose favorite thing to do is just like trash bitcoins, like this is the dumbest idea of all time.
I could care less with bitcoin trades for how it trades, why it trades, who trades it. If you're stupid enough to buy, you'll pay the price for it one day.
And yet you know JP Morgan does use blockchain technology. JP Morgan's clients are very interested in how and whether they can make money on these things. And so, you know, the job that we always have, as like financial reports and financial editors is try to help people understand this is what's happening in the market, this is what the effects of that are on prices. But the fact that prices are going up does not necessarily mean that this
is like objectively good or bad. It just means the prices are going.
Up, right, So can you give us some context on the highs we're experiencing today, how do they compare to the previous set of all time highs.
I mean, we're pretty much back to exactly where we were in November twenty twenty one, right, you know, So it's we have not yet reached a real breakout point above that, which is probably something closer to seventy five thousand for bitcoin or eighty thousand for bitcoin, because you know, between sixty five and seventy is like where we were the last time, and then the market just went all
the way down. So if we start to see that we are holding above seventy five or eighty, that does represent like a different stage from where we were the last time. Everyone was having a really good day. There are some projections and there have been for a long time, that bitcoin will hit one hundred thousand, which would you know, is not outside of the realm of possibility if you look at some of the run up over the past
couple of weeks. But what has often happened is folks hit like a kind of a ceiling and then they get a little bit freaked out. They're like, that seems really high. And what happens in those environments and you see this with all sorts of things you see this with stocks is behavior called profit taking, which means, let me convert my paper gains into real gains, and so I am now gonna sell and buy a watch and buy a watch or you know, of a yacht or whatever.
And that's you know, that's really the kind of what we've seen in the crypto market over the past few Like I'd say the third into fourth week of March is really people consolidating positions and being like, I feel good about seventy. I'm gonna get out while I'm ahead.
Right, So there's a level at which people are saying this is maybe too good to last. Yeah, And that's why we're learning those lessons, and they're gonna sell so they can take advantage of the opportunity and the moment.
Until potentially we get to eighty and then that becomes the new level.
Right.
So it's sometimes in finance you'll hear people talk about psychologically important thresholds, which is a fancy way of saying big round numbers. And the current big round number is seventy. The next big round number is eighty.
So if we don't see these new thresholds broken, and if crypto prices do stay pretty similar to where they're at right now. What's different about this moment than the last peak? Are we on the brink of another bubble?
That's what a lot of very intelligent people who manage lots of money and trying to figure out And you know that the one the big macroeconomic difference is we're in a very different interest rates environment. The geopolitical difference is multiple wars on multiple fronts, the US specific differences. We're about to enter another election cycle, and you know, all of those things independently tend to have effects on
financial markets. And you know there are hedge funds that specialize in trying to figure out how the combination of those big exogenous factors are going to weigh on everything from gold prices to where Nvidia is going to trade,
to what's going to happen with bitcoin. Within crypto itself, the things that people are looking for include are other regulators and other governments going to continue to make it challenging for crypto companies and crypto exchanges to operate, which would again limit a certain amount of activity in the market.
Another challenge is whether everybody's going to continue pouring money into AI right One of the things that definitely happened in the previous cycle is a lot of venture capital firms were like, Oh, yeah, you have an idea about a token, here's one hundred million dollars. It's fine. And right now they're like, oh, you have an idea about AI,
here's five hundred million dollars. And so some of the money that was pouring into to crypto has been redirected in the direction of artificial intelligence, which is again providing a little bit of a ceiling to some of the enthusiasm. But if we start to see vcs kind of really come back into crypto, that is another dynamic that we're paying attention to.
So, Sacey Marie, do you think we'll start seeing ads for cryptocurrency on TV again?
Oh, it's totally yeah. I don't know. I don't know if Tom Brady himself he is going to be the one, you know, like Larry David has has expressed some remorse about appairing in ads for crypto. But if you're in the US and you're in DC, or you're in New York and you're flying into certain airports or certain train stations, or you go to Hong Kong, or you go to Singapore.
The ads are totally back, and that's absolutely one of the things we pay attention because what that tells us is crypto companies have money because prices are going up, they're willing to spend that money on advertising marketing, they're paying to sponsor conferences. Again, I haven't seen anyone go in the Morning show recently to talk about NFTs, but you know, not outside of the possibility that that will happen.
Well, Stacey Murray, thank you so much.
Pleasure to be here.
This is the Big Take from Bloomberg News. I'm Sarah Holder. This episode was produced by David Fox. It was edited by Stacy Vannick Smith and Dave Litka. It was mixed by Alex Suguiera. It was fact checked by Stacy Rene. Our senior producers are Naomi Shavin and Elizabeth Ponso. Nicole beamsterbor is our executive producer. Sage Bauman is our head of podcasts. Thanks for listening. Please follow and review The Big Take wherever you listen to podcasts. It helps new
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