This Week in Crypto - FOMO Returns

more than that. Salana, which was kind of the ugly step child of two thousand two, has rallied more than a hundred and thirty percent, for example. Suddenly we're starting to hear words like fomo again. And then we have the crypto comebacks, or at least crypto comeback attempts. I guess we can say the guys behind three a C, the crypto hedge fund that literally blew up the industry

last year, are seeking money for a new startup. A lady who's been charged in the world's biggest crypto heyst is landing a new tech job here to help me break down all of this are Bloomberg Senior editor Anna Errera and Bloomberg reporter Bill Donna Hirich. Hello, welcome to the show. Everything is back. After pretty appalling we're now

seeing words like fomo appear again. We've had a long winning streak for bitcoin, vill Donna, do you want to start talking a little bit about what's happening in markets from your advantage point? What's going on here? Bitcoin is back. Bitcoin is back, baby, I think is what people are

saying on Twitter. So we we've had this super strong start to the year for cryptocurrencies where we've seen Bitcoin rallying more than in the first couple of weeks of the year, and you're seeing some retail investors waiting back in, maybe tentatively, but they're waiting back in, and possibly institutions also showing some interest there. But you know, I think we can ascribe it to a couple of different things

that are happening. The main one being that we're also seeing a resurgence in risk appetite when it comes to the US equities market, for example, or even just globally speaking, equities have been rallying to start the year. So we have the SMP if I fund it up. We have tech stocks up, and we know in the past, at least before f t X, for the majority of crypto was trading in tandem in the same way that stocks were trading in the US, and so you're seeing the

two of them moving in similar fashion. Once again, just with crypto, the moves have been much more, much bigger, much more pronounced. I took a look at the cryptocid worksheet that we have today. I saw Solana up and

thirty six. It seems like in the olt coin space it's even more pronounced, right, And this is the thing that maybe a traditional asset investor might warn you about and say, Okay, maybe don't wait in into the crypto space over there with with some of those smaller coins, and maybe don't pay attention with what's going on with doage coin, etcetera, etcetera. But that tends to happen when we do see a resurgence in risk capitae, when we

do see enthusiasm coming back in. So you have Bitcoin rallying big, you have Ether coming big, and then when you see the smaller coins, it's sort of telling of what's going on in the space. And then similarly in the equity space, because I cover your stock markets as well. We are also seeing meme stocks, certain memes stocks just rallying like crazy. So you are just seeing it in

certain pockets of of of the different markets. If you look at last year, we had all these you know, massive blow ups, starting with Terry us d terror USB and its sister token Luna lost their head to the dollar.

In the last few weeks, they had a spectacular meltdown, and then bitcoin and crypto folse off a cliff, and then there are a couple of weeks of you know, either stability or even climbing back a bit, and then the next few drops three a C crypt hedge front three arrows Capital has been ordered into liquidation by a

court in the British Virgin Islands. And then saying that pattern kind of played out a couple of times during and so what you're saying is basically, there is still a risk hanging over us that there's ugliness out there, whether or not spawned in some way, shape or formed by f t X, that we still haven't really clear. Yeah, And I think what's interesting is because that situation hasn't been resolved. The issues we left the year with so

like do you put your money in exchange? Maybe you don't want to, kno, because you're worried there will be more default If not, where do you trade? Like are you do you? Are you sure you know who else

is going to collapse? And do you want to expose yourself to more counterparty risk or make new investments because you might need them to you know, carry your butt if something happens um then you know, until that gets solved, then it's it's interesting to see, you know, or to to see the price going up because there might be a natural ceiling to that I wonder like or maybe not.

Cryptos very weird and crazy, and you know, it's always I'm always skeptical of people have clear reasons about why it goes up when it explodes, go and goes up a lot, or why it falls, you know, so every rally people have had to come up with like their narrative about why it's gone up, and it's sometimes it's a narrative that develops a sort of excuse in a way, so you know it might go up. I don't know. Unfortunately,

it's sort of my job to predict it. And I think Anna is right and if I can just add, you know, because we are sort of trying to develop these now ratives around why the rallies might be happening at any given point. What a lot of investors tend

to do is look at technical signals. And the thing that we did see at the start of this year is Bitcoin, for example, trading above it's fifty day moving average, which is just like lingo, like a technical indicator to say that it's rallying so fast it's moving above the it's average price over the last fifty days, and something like that can maybe be a sort of trigger signal for others to also step in. And so maybe you know,

that's part of the explanation as well. But I do want to add an Anna touched on this as well. Trading volumes are still like anemic. They're super low compared to what we've seen in the past, and you do still have retail and institutional investors who are just terrified. They've totally bailed out from from the space, and they're not really looking to wait back in in any meaningful way,

at least at least not yet. And actually I want to see some something that Anna said, I think he said weird and crazy, and that's kind of the perfect segue. It's the best explanation, and it's also a perfect segue into what we're gonna talk about next, because we're gonna talk about the founders of three A C returning to raise money for a new crypto venture. And we covered this together vivid memories from both what happened with three A C but also what happened on crypto Twitter when

this got out there. Let's first rewind a little bit for those who are not as familiar with three A C as we maybe are, so basically, in a nutshelter hours capital run out of money, they couldn't sort of the investments, that the value of their investments went went down and they couldn't meet margin calls from from their lenders um and so they went past and since then we've not been able to figure out where the founders are based. They've been it's not like they disappeared. They're

been active on Twitter. They are emerged, re emerged somewhat triumphantly after FTX went bust um, but they haven't sort of been located and they're in discussions with the liquidators of their fund, who say they aren't cooperating and so it's not like they went completely quiet and we didn't know where they were. But obviously there's still a lot of people that are very happy with them, especially because like three a C Was as you were saying that

we've been seen lots of like dominoes fall, right. So they then were counterparties to many other players, among which is Genesis, which we mentioned before, who has at one point two billion claim with them. So you know, there's lots of people that harbor sort of, uh, not the

nicest of sentiments towards the founders. And so when these guys reappeared this week or rather sort of, it became known that they were running around or I guess zooming around pitching a new idea for a venture and trying to raise million to launch an exchange to trade claims of bankrupt crypto companies. Then people had a lot to

say because obviously, you know, um, it's just crazy. As we said we said before, some considered a bit a bit in saying that even before their own issues are resolved, are the issues of their fund that they're trying to set up another venture that, of all things, trades claims. And the point being that this is sort of an a liquid market. It's hard to trade these things, but there is demand, and obviously there are there's no shortage of bankrupt crypto companies now and so no short of

claims and opportunities there. And we have to mention what they're proposing to name this new venture, which is G t X, which a lot of people immediately seized upon because it's so similar to F t X, except that G comes after F. Of course, there was a lot of F plus one on crypto Twitter. You have to wonder, I mean, you can almost not pick, even if it was a tentative kind of placehold the name or whatever.

Just by picking this, I mean, they must have known that people were going to skewer them for picking such a name. Huh. Twitter was the best place to get a sentiment check, just to read on sentiment on on

what people were feeling about this. And in the stories that we were putting together in regards to this, there was this great quote from Nick Carter at Castle Island Ventures and he said, it's akin to our sinists returning to the scene of the crime and offering to charge their victims for buckets of water, which I just really liked because it sort of ties up exactly what people were um sort of talking about in regards to this on Twitter. And we'll be right back with more of

the week's top crypto stories with Anna and Willdonna. Uh. I want to talk about another comeback story. Um, we want to touch upon it briefly because Razzle Cohn is back in the news. Heather Morgan, I believe is her given name, the Crocodile of Wall Street, the Crocodile of Wall Street. Yes, and she is now I believe, awaiting trial for involvement or alleged I should say, involvement in one of the biggest crypto heists in history. And it emerged this week that she has a new job or

she's about to have a new job. Yes, so she has a new job. The founders of three I C apparently have a new job. So it's the comeback week for a lot of crypto people or formerly uh disgraced maybe we can say crypto people. She had been accused with another person of stealing four point five billion dollars worth of bitcoin from bitfn x back in the day, and we don't know where her new job is going

to be. I think all that's been revealed is that she's going to be working in tech, but it does seem like she's on her way to having a new role. Everybody gets a second chance in crypto, and memories maybe are shorter than elsewhere. I don't know. We are going to move on to talk about more. I don't know if you want to call it serious news here. UM publicly traded crypto exchange coin Base has been in the news quite a lot over the past couple of weeks.

We've discussed them here on this podcast. Um they're cutting jobs, and then we had a headline the other day saying they will assess their global operations. What does that mean? What are they looking at right now? Anna? I think the word they use was bright size, but we thought it was too jargony, so as we were doing the headline without assessment made more more sense to normal humans.

But you know, they're shutting down their operations in Japan, they've said, And so one of the reporters for Bloomberg Quicktake in Davos asked the chief policy officer, I believe whether they were going to shut down and think more or what the plans were, and they sort of He said that the plan was in tradatural expansion, but they were going to make sure that the sort of their operations in every region or are of the right size

for the opportunity there. And you know, obviously the opportunity seems to have shrunk a bit over the last year, so you know, question is does that mean downsizing growing? But yeah, they're they're going to be looking at where they are, what they do, whether they needs to grow

or shrink, which which is interesting. There's another company there is a crypto bank named Silvi gate Um, and this is quite an interesting one because there's sort of an interface between the crypto world and I guess what we could call the regular world of Fiat currencies, etcetera, etcetera. And they've been having some troubles, but they did come up with result the other day and Vildanna, the share re action was actually quite positive. They've been absolutely pummeled

over the past couple of months. We should going out, but the reaction when they presented results finally was fairly positive.

What's going on there? Yes, a silver gate is known, as you said, the biggest crypto bank, and their shares had risen just astronomically during the first couple of pandemic years and then obviously in two we saw a huge, huge draw down just you know, similar to what we saw with other cryptocurrencies, but their shares just absolutely plummeted, and I think the market was trying to suss out exactly how much exposure they had or how exactly they were going to be impacted by all of the different

you know blow ups, the ones that we've been talking about today on on this episode, and so recently they actually they told in messers, they came out and said earlier this month that they had planned to fire something like fort of the bank's staff and that they saw a huge surge in people looking to withdraw, uh, take their money out of silver Gate, and so that's what's been some of the trouble that's been facing this company.

But yes, we saw this maybe um peculiar or interesting we can call it reaction in share price, but we tend to see stuff like that happen all the time, where maybe, uh, the company's shares react in the opposite

way of what you might think. Analysts might tell you that already the drawdown had been so so huge that you would assume maybe a bounce back would be coming at some point, but yeah, it's very interesting to follow what's going on with the bank because it does give you sort of um a read on on the industry as well. Thank you, Anna and Will Donna. This was Bloomberg's Anna Arera and Bill Donna Rich. You can find more of their reporting on the Bloomberg Terminal and on

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