Will October Prove To Be 'Uptober' for Crypto?

been optimistic that this year will be the same. In this episode, guest host and Bloomberg reporter vil Donna Harrick, Bitcoin actually has been less volatile by some measures than stocks have been. Just the moves in the stock market have been crazy. Keeping me up is joined by Bloomberg reporter Hannah Miller. A lot of the sell off happened earlier this year is part of why you know October could be maybe a decent month for crypto to better understand the dynamics at play during the not so spooky

month of October. Oh you look good, O'm my gosh, she looks you look good. Thank you Bush. Okay, right off the bat, I'd love to start with a very bad joke, which is that October is a scary month. Right, we have Halloween, we have ghouls and goblins and whatever else, But actually it tends to be a not so scary time for bitcoin, and I'm hoping that you can out

for us why that might be. Yeah. Well, historically October has been called October in crypto because we've seen in the past that bitcoin and ethereum have actually performed pretty well and have had price increases. I think investors are kind of waiting to see if that'll be the case with this October, despite us being in the middle of a cold crypto winter. I love the meme October, and I remember writing about it the last couple of years,

and I'm so happy that you brought it up. But just to take a big step back, so we've had this really big down draft this year. Both August and September were very bad months for cryptocurrencies, and I'm hoping you can just lay out the foundation for us for what it is exactly that's been happening in crypto markets that's been pushing prices lower. Yeah, there's been a lot going on this past year. We saw really the market take a sharp downturn in the spring after big players

lapsed within the industry. So I'm thinking, you know, disgraced crypto hedge fund Three Arrows Capital. I'm talking about Celsius and Voyager, which are both crypto lending platforms that have had to file for bankruptcy. And it's really just brought prices down enormously. Oh and not to mention the whole collapse of the terra ecosystem. You can forget it, you know, Oh yeah, I can't forget that. So really all of

these things have helped tank crypto prices. And then the other big one also being the Fed and everything that's been happening with interest rates and how it's impacting. Is the Fed going to change its rate path because the markets are nervous inflation? Inflation, inflation, It's fair to say inflation dominated the discussion at the last FED meeting. The Fed has been raising rates that is spooking investors when

it comes to risky assets like crypto like stocks. You know, I think we're waiting to see whether more rate raises are on the horizon. Did you mean to make a Halloween joke when you said spooky? I did. Thank you for touching that. So when you're talking to people, because basically our jobs are talking to people figuring out what's going on with markets, what's going on with the industry, what are they telling you about the potential for crypto

prices to recover anytime soon. Yeah, so a lot of the investors I speak with are really you know, buckling up for the long haul. They do believe this crypto winter is going to be a bit of a long one, but they do believe that prices will eventually come up. These are investors who've poured a lot of money not only into cryptocurrencies and digital assets, but have also backed major startups in the industry. So they're really pinning their hopes on the fact that crypto prices will eventually rise

once again. And you know, these are true believers. These are people who see value and importance in digital currencies and how they can change how we interact with money and you know, do transactions with each other. So those are some of the narratives that we had been hearing about crypto, where you hear the bitcoin is an inflation hedge, for instance, or maybe a place to park your money

for turbulent times. I remember writing those stories a couple of years ago, and those narratives really haven't been playing out recently, right, Yeah, we I think we've seen really a decorrelation when it comes to rising inflation and demand for bitcoin. You know, the comparison of bitcoin too. You know, digital gold has been so dominant over the past few years. But really when inflation has become more rampant in the past year or so, that hasn't caused bitcoin prices to spike.

And just to go back to what you were just saying about the sort of hopefulness of the proponents who are really sort of waiting and seeing what prices might do going forward, and they're hoping that things have recovered

to where they were before and even above that. But I'm just wondering about you know, the last couple of years, I remember writing about these huge price targets that people had for bitcoin, different strategists on wall streets also saying it could reach a hundred thousand or two hundred fifty thousand dollars per coin, and we're not seeing as much of that right now either, right, So what has sentiment been like, Yeah, I think people have had a reality check.

You know that there are still a lot of unresolved issues with crypto. I mean we can see that with what happened with Tera Celsius Voyager three A C. There's also just the looming specter of regulation. There's a lot of uncertainty that's happening here, and I think investors are

getting more realistic about how this space is growing. But that also means greater regulatory scrutiny, that there are going to be actions taken to rain the space in We started out talking about October and it potentially being a much better month than the last couple of months. But if we are looking ahead or even through the remainder of the year, is there something that people you speak with are telling you about a potential catalyst for prices

to actually start to stabilize and rally. Yeah. I think more institutional adoption will help things. I think like a big partnership between a major tech or financial company and a major crypto company could help things along. And you know, we are expecting clearer regulations and I think once more clarity comes out around that, that will help things stabilize. You know, people will know what they're dealing with, what companies are going to be dealing with on the horizon.

Is that something that we can expect to see more of in the coming months even I think so yeah. I mean I think every day, you know, we see some sort of action by the SEC or the CFTC that gives us a pretty clear idea that they're wanting to take control of the space and you know, flush

out bad actors. And I think some people within the crypto industry welcome that, you know, they see this crypto winter as a clean out that really the truly committed, truly functional platforms are going to stay in and that bad actors or you know, more fragile platforms are just going to be flushed out. Up next, more with Bloomberg reporter Hannah Miller on how bitcoin prices are faring this October. We'll be right back. So, speaking of the truly committed,

we have a word for that in crypto. It's hoddlers, right, people who are holding on for dear life. But I've been reading a lot of notes recently that's basically say these long term holders or hoddlers have been sitting on their coins potentially waiting for the crypto winter to pass, I suppose, or for things to even get a little bit worse before they get better. And then at the same time, the retail investor that had been involved over the last couple of years during the pandemic has largely

gone missing. And I'm wondering if you can talk about this, this trend of retail leaving the space and how much actually maybe we need the retail investor to be coming back in. Yeah. No, retailers are a bit frightened, you know what's happening here. They're you know, pulling out. We saw a really big sell off in the beginning of the year, so there's hope that things will get better

and stabilize. But yeah, no, I do think that this industry needs retail investors in order to get more mainstream adoption and fulfill what many think is, you know, it's destiny, which is that crypto is going to be, you know, an incredible form of money, that it's going to give people more financial freedom, and that it's going to be an easier way to conduct transactions. Like Yeah, retail investors, Uh, it's a huge question of how they're going to be

lowered back in and it's been very interesting. I've been you know, looking at what projects are gaining funding, what what's being invested in. And NFT gaming startups are like a huge draw for for VC firms. Yeah, they see, you know, n f T gaming is a way to kind of bring your average consumer back into crypto. Everyone loves virtual gaming. You know, it's a fun, easy thing.

It's a clear end product, unlike some complicated decentralized finance platform the mechanics of which usterers might be leery of. It's interesting to see what's still you know, staying resilient during this time. Can you actually talk a little bit more about that, because even I can't picture what it looks like. It's a n f T gaming platform, what specifically does that mean? Yeah, so uh this kind of bleeds into the metaverse of course, such a buzzword um

over the past year. But yeah, I know, like a lot of startups out there are building virtual worlds. Some of them are in blockchain, some of them aren't. Some of them just incorporate blockchain elements like non funcible tokens. But yeah, these are just like really exciting projects that are happening here. And you know, there have been other games in the past. I'm thinking of Acxie Infinity, you know, which used n f T s, but that was definitely

a more decentralized, finance focused game. In my opinion, a huge part of it was like making money. I think some of these new games that are being built are more focused on a play and earn model, So it's like making money may not be the main objective. It might be part of it. You can do a free to play option. Yeah, people are excited about what these virtual worlds are going to look like, and also the

advertising opportunities that could be present. You know, if you're in a digital world, you might see digital ads around you, and I think that's part of why investors are still interested in n f T gaming deals. So this is maybe one example of something that might help draw the

average investor, the retail investor, back into the space. Do you think that prices need to start recovering first before the average investor steps back in, or is it that wants the retail cohort actually wades back into the space that that actually will help propel prices higher. The chicken or the egg, Oh yeah, that's that's that's a really good question. It's a tough question, but yeah, I know, I inc definitely retail investors need to come back in

to help boost prices. And something like you know a game or you know, a new offering from a tech company that uses crypto things like that that it's like sort of a blend between a mainstream company and a crypto native company. I think something like that could help uh LAW investors back in, And I do think retail

investors are needed to boost prices. We were talking about October and how potentially it can be a solid month or a better month than the last couple that we've had over the summer, and something funny has actually happened in the first half of October four bitcoin. So typically bitcoin and other other cryptocurrencies tend to be much more volatile. They swing just to a greater extent than stocks do,

for instance, or many other asset classes. And bitcoin actually has been less volatile by some measures then, and stocks have been just the moves in the stock market have been crazy, keeping me up late at night. But I'm wondering how this can be. Can you explain this to us, like, what is going on? Is it maybe the case that we just saw so much of the selling already happened in the first half of the year, and potentially does that mean that the the end of the year could

be a bit better. I think what you said, like that a lot of the sell off happened earlier this year is part of why you know October could be maybe a decent month for crypto. We still see stock struggling, we still see SMP five hundred struggling, we still see tech companies having a difficult time during this month. But I do think there's hope that that won't be the case for bitcoin. Also fun fact, Stoshi Nakamoto, the creator of bitcoin, who uses a pseudonym, published the Bitcoin White

Paper on October one, thousand and eight, Halloween. So I think some diehards within this industry, some of the major hoddlers, you know, they look to October as is an awesome time and a great anniversary for the world's largest cryptocurrency by market cap. What are you going to be doing to celebrate bitquin's birthday? My birthday is actually very close to Bitpoin's birthday. Happy birthday, thank you. So yeah, I think I'm going to be traveling during that time and

throwing a joint party, I hope. Yeah, yeah, we're best friends. Well, Hannah, thank you so much for joining us. All right, thank you. You can find more of Hannah Miller's reporting on the Bloomberg Terminal, on Bloomberg dot com and on Twitter. She's at h G. Miller. On the next episode of Bloomberg Crypto, we're going to get a behind the scenes look at a very special project from Bloomberg business Week, who are publishing an entire issue dedicated to one question, what is Crypto?

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