Bitcoin is headed for its fourth annual decline in its history, falling as much as 5.2% and is now about 7% lower for the year, with volumes low and investors bailing on Bitcoin ETFs. MARA Chairman & CEO Fred Thiel, however, expects a great performance from Bitcoin over the course of the coming year despite a 'healthy retracement' in the marketplace. He joined Carol Massar and Tim Stenovec on 'Bloomberg Businessweek Daily' to break it down.
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3:12So I'm just curious, how do you square that if we're seeing investors still willing to move into the equity markets, but not crypto, that disconnect?
4:50So what do you think should be the level of crypto that makes more sense?
6:20What makes your company different than American Bitcoin?
7:57What is the difference between being a treasury company versus a company that adopts the treasury strategy?
9:58So I mean, is all of the good expectations in terms of news already priced in and it can't get much better?
We talked about this at the top. Bitcoin not having a great year. It's headed for its fourth annual decline in its history and the first one that didn't coincide with a major scandal or industry meltdown. So, we're talking about cryptocurrencies, Bitcoin specifically, now nearly 7% lower for the year. It's down around 30% from its October 6th all-time high. Volume's low and investors timing Bitcoin ETFs. You know about this. You do a weekly Bitcoin show, you know.
Yeah. I mean, the bear market means that Bitcoin has decoupled from stocks. The S&P 500 closing in at a record earlier this month, up 16% for the year. Bitcoin struggled to find footing. The Bitcoin miner and accumulator, Mara Holdings, knows all too well about the drop. Its own stock down more than 36% so far this year. Nearly 28% of the float is shorted. With more, we head to Paris and to Fred Thiel, chairman and CEO of Mara. Fred, good to have you on the program. The decline in the asset price this year, certainly, $126,000, that was a major high earlier this year. That was a big moment for the cryptocurrency, but down close to 30% or more than 30% from that. How much lower does Bitcoin go?
I think Bitcoin at this level is finding support in the kind of $84,000 range, which is just about where the break-even point is on most ETF purchases, Bitcoin ETF purchases, and that seems to be a level of support where essentially large investors who are trying to defend their positions want to keep it above that level. If it falls below that, you'd see more sales most probably out of the ETFs back into liquidity. Bitcoin is very much driven by global liquidity. You had expectations of more from the Fed and more clarity around market structure. But I think what you really have to look at is there was a huge run-up in the August through September into October period, and a number of us felt the market was frothy in the beginning of Q3 and things were getting a little overheated. Now we've seen some of that come off. You've also seen a lot of money that rotated into AI now rotating out of AI and starting to rotate into more Dow stocks. So I think you're generally seeing a risk-off environment. Risk-off tends to drive people out of Bitcoin. But the liquidity that the federal government is going to inject in the marketplace now that quantitative tightening is over, we're starting to see easing again. We believe that will bode well. The dollar's down, which also bodes well for Bitcoin. And I think you're going to continue to see Bitcoin appreciate. But you got to realize it's a very large asset class. It's a couple trillion dollars in size, and it takes a lot to move the price. What we're seeing now is just some healthy retracement.
Hey, if I may, just jump in for a moment. I am wondering, Fred, you say it's a risk-off environment and yet I'm looking at an S&P 500 that's still near its all-time high. We've seen quite a bounce back when it comes to the S&P 500, also a very big market. So I'm just curious, how do you square that if we're seeing investors still willing to move into the equity markets, but not crypto, that disconnect?
Well, I think you have to look at the derivatives market, which is much bigger than the actual spot Bitcoin market, and you have to see the sheer amount of leverage and positions that have come off since the peak. You've gone from the $90 billion range down to the $30 billion range of open positions. So that's a huge amount of leverage that comes off, which essentially sucks wind out of the marketplace. People have been moving their money out of Bitcoin and into other things. I think you've also seen, look at the AI stocks. Most of the second-tier AI stocks have all seen a pretty large come down since the peak. Even stocks such as Oracle, look at CoreWeave, look at these stocks and how they've performed. I think what you're seeing is a rotation out of some of those and into other stocks. Bitcoin is associated with technology, it's associated with risk-on assets, and it's very associated with liquidity.
So having said that and you talked about the run-up that we saw earlier in terms of crypto, where it got to maybe frothy levels, we're now at what, $87,000 and $87,32 and change. So what do you think should be the level of crypto that makes more sense?
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