Crypto Update | ‘Bitcoin Is Due for a Breather,’ Tactive Wealth Advisor Eddy Gifford Says

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« Markets Daily » kicks off a new format with a minute of market updates, followed by an interview with a rotating cast of markets analysts across the crypto space. Today, host Jennifer Sanasie speaks with Eddy Gifford on January price predictions, spot bitcoin ETF approval odds and market moving news for the new year.

This episode was hosted by Jennifer Sanasie. “Markets Daily” is executive produced by Jared Schwartz and produced and edited by Eleanor Pahl, alongside Senior Booking Producer Melissa Montanez. All original music by Doc Blust and Colin Mealey.

Audio Transcript: This transcript has not been edited and may contain errors.

It’s Wednesday, January 3rd, 2024 and this is « Markets Daily » from CoinDesk. I’m your host Jenn Sanasie – let’s get going and take a dive into those prices.

According to CoinDesk Indices, at 8 a.m. Eastern time, both bitcoin and ether fell over 6% in the past 24 hours, with bitcoin trading at $42,593 and ether at $2,242. Today’s ‘Mover’ in the CoinDesk Market Index is the Zebec Protocol, ticker ZBC, up over 49% on the day.

In traditional markets, the NASDAQ FELL nearly 1.7% yesterday while the S&P 500 was down just over half a percent for the first trading session of 2024. And in commodities, the Brent crude benchmark was up slightly over the past 24 hours, trading at 76 dollars and 77 cents a barrel. Meanwhile, gold fell just under a percent, at 2,055 dollars an ounce.

For more on the markets action, let’s welcome TACTIVE wealth advisor, Eddy Gifford.

JENNIFER SANASIE:

All right, the last time we spoke, bitcoin was just breaking above $38,000. And everyone was really excited about that. Times seem to have changed in the beginning of 2024 here. Yesterday, bitcoin broke above $45,000. It’s dipped a little today. What’s driving all this action?

EDDY GIFFORD:

Well, I think there’s just a lot of money behind it and just a lot of speculation going on right now. Of course, the big news right now is, when are we going to get that spot ETF? Heading into the end of the year, it appeared that everyone just kind of believes like, « Oh, we’re gonna get it, and we’re seeing that price rise, rise, rise. » Of course, we’ve got a halving event coming up, too. So that’s typically a catalyst for a bull market. And today, you know, maybe there’s just a little bit of doubt, like, « Oh, what if it doesn’t get approved? » Now, I don’t think we’re in danger of spot ETF not being approved. But I do think that if it was not to get approved in the next week, we would see a sell off. But then I also think that if it was to get approved, this week, we would see a little bit of a « sell the news » event. So there’s a lot going on right now. I think bitcoin’s a good place to be, but we’re due for a little bit of a breather, and it’s showing a little bit today.

JENNIFER SANASIE:

All right, so it sounds like you’re crediting the dip to some doubt. What do you think’s driving that doubt? There were a bunch of stories yesterday that this could be a « sell the news » event. We may not see prices climb to as high as some analysts think. What do you think’s behind some of that doubt?

EDDY GIFFORD:

Well, I think anytime that you’re you come up on this like big event where something’s supposed to happen, and everyone’s sure of it, and then you get closer and closer and closer and and the actual event isn’t occurring yet — you just see people kind of get a little bit of worry behind them. Of course, the other thing is, like you said, a lot of stuff came out yesterday that said, « Hey, this is a ‘sell the news’ event. » And so it could just be a lot of people saying, « Well, everything says it’s a sell the news event, let’s sell the news, let’s sell it ahead of time, and then we’ll buy the dip on the other side. » So I think it’s just you know, a lot of profit taking. Also, we had just a monster quarter for bitcoin, over 50%. And so anytime you get that much gain that fast, even if it is in the cryptocurrency, the smart money is gonna take a little bit of money off the table. So it could just be some profit taking too, for sure. That $45,000 number yesterday could have been a catalyst to kind of take some money off the table.

JENNIFER SANASIE:

Eddie, I believe you and I have talked about this before, but I think it’s relevant to bring up again, seeing as we’re coming quite close to the potential of an ETF approval here in the United States. But what do you think the chances are that we don’t see an approval in the coming weeks?

EDDY GIFFORD:

It seems highly unlikely that we do not see an approval. I mean, if we don’t see an approval then it’s kind of like a standoff. I feel like we’re really just trying to say no, no, no, we’re not going to accept bitcoin, but there’s just too much behind it now obviously, like just the technology itself. That’s not going away. I think that everyone’s just been kind of hoping that hey, like bitcoins gonna go away. This is just a fad right and even Jim Cramer, you know, he said yesterday, you can’t get rid of it. And Dimon’s been talking about how « Yeah, I would I would ban all of it if I was president, » but then JPMorgan is one of the providers for BlackRock’s ETF. So, it’s one of those things where like, all these actions are kind of speaking louder than words and saying, « Bitcoin is here to stay. » So not getting approval would be surprising at this point.

JENNIFER SANASIE:

JPMorgan is an authorized participant for BlackRock’s ETF. Are you surprised to see that news released yesterday?

EDDY GIFFORD:

I was definitely surprised to see it because when Dimon was in front of Congress, he was telling them that hey, like, this stuff is bad. Like, we don’t like it. We don’t want it. If it was up to me, we’d get rid of it. And then to kind of see them for what could likely be the flagship product and BlackRock, which has probably the most trust behind it in the ETF space. I think it caught everybody by surprise. And I think it just speaks to the fact that bitcoin’s real. It’s here. And are there issues with it, you know, there’s issues with everything, and you can use it in a portfolio. And if you’re not using it in the portfolio as an advisor, at this point, I think you’re kind of missing a huge opportunity.

JENNIFER SANASIE:

All right, let’s talk about the best and worst case scenarios. You know, I love a good price prediction. If we don’t get an ETF approval, which it seems to me if you look at some of the chatter and comments that are out there from analysts, that may not happen, but if we don’t get the approval, what do you think’s gonna happen to the price of bitcoin?

EDDY GIFFORD:

I think if we don’t get the approval, we see a little bit of a selloff. We’re sitting at 42 and change right now, we can see another 10 to 15 percent correction. So we could go and touch, like the 37, 35 space in that scenario. But the funny thing is, I don’t think it’s that much different. If we actually get the approval, I just think that the buy the dip opportunity is going to be a more recent opportunity, if we get the approval, and we have a sell off. But either way, I think that we’re going to breathe a little bit after the approval for sure.

JENNIFER SANASIE:

So whether or not we get that approval, you’re thinking we dip back down into the 30,000s.

EDDY GIFFORD:

I think we’re going to touch the 30,000s. And I think that regardless of the situation, that’s an opportunity to buy. If you’re one of the smart ones that took profits over the last quarter, that would be an opportunity to dollar cost averaging over the next two to three months, you know, maybe six months if you’re a little bit concerned about the timing.

JENNIFER SANASIE:

I gotta ask your opinion on this. CoinDesk published a poll on Twitter yesterday asking our followers one year from now, which bitcoin ETF do you think will have the most assets under management? The last I checked, BlackRock was the leader in this pool, followed by Grayscale. What do you think?

EDDY GIFFORD:

I would probably lean toward BlackRock, just because if we see a more wide adoption, from an advisory standpoint, at the institutional level, they’re going to lean into BlackRock more generally speaking. So I would say BlackRock would get the bill and would win that race there.

JENNIFER SANASIE:

Even though Grayscale already has a $26 billion headstart.

EDDY GIFFORD:

Yeah. You know, there’s so much money behind BlackRock and what’s going to happen? This is just my opinion, but what I think what’s gonna happen when the spot ETF does get approval is we’re gonna see an exit from a lot of the futures ETFs to get into that spot scenario. So that doesn’t mean it’s just going to be a direct exchange into the grayscale spot ETF, for example, right, I think that the situation is going to be a catalyst for a pullback in the futures ETF and a surge in the spot ETF.

JENNIFER SANASIE:

Now in December of 2023, VanEck released their predictions for 2024. One of those predictions is that a spot ETF will be approved. But the other prediction is that the U.S. will face a recession. If we head into a recession this year, how do you think crypto markets are going to react? And more specifically, how do you think bitcoin will react?

EDDY GIFFORD:

I think it’s going to be dependent on the reason for the recession. If the recession occurs because something actually breaks under the system and we see like this big pullback at the same time we see rates fall significantly, I think that bitcoin actually holds up pretty well in that scenario. I think if the recession happens because of stagflation, where the inflation remains elevated and we’re just not seeing any growth, I think that’s going to be tough for every asset, including bitcoin. So, if we get the recession, is that good? Is that going to cause more volatility? Are we going to see more movement? Absolutely. But the reason for the recession is going to be the determinant behind, you know, what’s going to happen there. Of course, we’ve seen gold and we’ve seen bonds actually rally over the fourth quarter along with the stock market. Bonds did better, actually, the S&P 500, gold pretty much matched it. Then bitcoin demolished everything. So if it’s because interest rates are falling, I think that could be a good thing for bitcoin. But if it’s because interest rates are staying elevated, and the Fed does kind of an about face and says, Hey, nope, we have to keep raising rates and we go into a recession at the same time. That’s just going to be a challenging environment, period.

JENNIFER SANASIE:

All right, and quickly looking forward. Talk to us about futures. What are we seeing there?

EDDY GIFFORD:

Well, in the futures market, we’re still kind of seeing, at least right now, we’re not seeing a whole lot of things that are relatively flat there. are leading and so typically spot times they catch up with futures and so that’s why we’re seeing a little bit of fall right now. But when it comes to the futures ETFs in general, we’re still seeing a lot of volume behind it. So no one’s running away from bitcoin. But I think that that volume has been really low because everyone’s kind of hoping that when we get this body together we can kind of jump in space sooner than later.

JENNIFER SANASIE:

It’s always a pleasure chatting to you. I’m sure we’re going to be talking about the markets much more often in the coming weeks but before I let you go, I want to do something a little bit fun. I have five questions for you, and you’ve got to answer these really quickly, all about the markets. Going to sum up everything we just spoke about. Are you ready?

EDDY GIFFORD:

I’m ready, let’s go.

JENNIFER SANASIE:

All right. Will the price of bitcoin fall or rise on the spot bitcoin ETF decision?

EDDY GIFFORD:

Fall.

JENNIFER SANASIE:

Why?

EDDY GIFFORD:

Just because of « sell the news. » Everyone, when it finally happens, we’re getting kind of we’re gonna fall initially and then I will probably see a pretty good rally on the back end of that. ,

Alright, next: Matrixport predicts that bitcoin will reach $50,000 this month. What do you think?

$50,000? I think again, it’s the catalyst behind the spot ETF but I don’t think we’re touching it. I think at this point, if we don’t get the approval, we’re gonna go down. If we do get the approval, we’re gonna breathe. I do think that we’re hitting $50,000 In the next three to four months, though.

If we get a spot bitcoin ETF approval, do you think a spot ether ETF approval will follow?

EDDY GIFFORD:

I think it’s going to be the beginning of something great, how we’ll see a lot of what a lot of spot ETFs and I think Ethereum will be the next one in that situation.

JENNIFER SANASIE:

Yes. And what altcoin will steal headlines in 2024?

EDDY GIFFORD:

That’s a tough one. I mean, I still like Avalanche, it’s had a significant run out but I think that it’s got a lot more opportunity there. You know, and then you can never discount Ethereum. I think that if they end up getting a spot ETF too, that’s going to run high because we haven’t seen as much speculation behind that. Everything’s kind of been around bitcoin when it comes to the ETF space.