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00:00 Speaker A
Bitcoin hovering around $75,000 this morning after falling to its lowest point since President Trump was elected. Overall, the cryptocurrency down about 40% since hitting its last record high in October. Investor Michael Burry warns that this could trigger what he calls a death spiral, writing, quote, there’s no organic use case reason for Bitcoin to slow or stop its descent. For more on what all of this means for investors who have put over $100 billion into assets, uh, in assets into Bitcoin ETFs. Let’s bring in Mike Willis, Cyber Hornet ETFs co-founder and CEO for this week’s ETF report brought to you by Invesco QQQ. Mike, thank you so much for being here.
00:41 Speaker A
Um, obviously, you know, this is what happens in crypto periodically, right? But now, as it’s happening, it’s got more participation than ever before. So, what do you think the implications are from the drop that we are seeing in Bitcoin prices?
01:03 Speaker B
Yeah, certainly a wider audience that’s, uh, now currently invested in Bitcoin. So originally the OG Bitcoiners, they viewed, um, Bitcoin as digital gold. The new investors still, um, tend to look at it more as a tech stock. So you really have, um, two ownerships in Bitcoin and the OGs are hodlers. They, you know, they they’re known for holding on for dear life and they’ll hold it through thick and thin because they believe, uh, it’s the future. However, the newer buyers, the newer investors that view it more as a new technology, they’re more swayed by these market pullbacks. So I think, um, this 40% pullback in Bitcoin has shaken out a lot of retail investors who are exiting and I think there’s more institutional buyer.
01:50 Speaker A
And so what do you think then are the implications for Bitcoin prices? I mean, we were just checking on Polymarket here to see what the odds are, where they put it, um, at the end of of 2026 here and it looks like that, um, there’s more of a prediction that it’s going to languish than than it’s going to rally.
02:22 Speaker B
Yeah, I think when we hit 126,000, people were pretty excited that it’d be on its way to 200,000. When that didn’t happen and it started to pull back to 100 and then down to 90,000. I think a lot of people that, uh, came in in the 10s and 20s and 30,000, uh, arena decided to exit because it didn’t look like it was going to go to the next level. Um, for whatever reason. Um, I do think you always, whenever you invest in a new technology like this and certainly cryptocurrencies, a, a retracement back to $50,000 wouldn’t surprise me. Um, and it’s why we buffer our cryptocurrency holdings with the S&P 500. So we like to hold 75% S&P 500 and then work in a 25% allocation to crypto to enable you to our investors to get through these, uh, these big drops, because they’re going to happen.
03:22 Speaker A
Some of the time though, I mean, you know, and I know the argument for a long time is that, um, you know, Bitcoin was sort of, as you pointed out, digital gold or that it didn’t have that correlation, but what it kind of does have that correlation to tech stocks a lot of the time, right? And tech stocks, as tech stocks go, the market goes a lot of the time. So is that the most sort of effective hedge if you will?
03:52 Speaker B
Yeah, I do think it’s being traded like a tech stock, and I think, um, when you had a, basically, I think we got up to 100 150 billion in the new Bitcoin ETFs. So, now we’re down to about $100 billion dollars. But most of that money, I think, uh, does view Bitcoin as a new technology. I think a lot of that money doesn’t even understand, uh, exactly what blockchain is and what Bitcoin is. And the original Bitcoiners, of course, they understand that. So, when Bitcoin would go up to 100,000 and come back down to 20,000, um, they’re used to that. And, um, they have a a a 10 to 20 year focus on the asset class, whereas the new investors that have come into Bitcoin, I do think they view it more as a tech stock. I do think that’s why it’s correlated. But eventually, as more people learn the the the depth of Bitcoin and, um, the background of it and why it is more accurate to be categorized as digital gold, then I think it will start to price and bifurcate from tech stocks. But for now, it does trend with tech stocks.
05:07 Speaker A
And so if and if and when that realization happens, if it does happen, wouldn’t it then at that point just make more sense to hold Bitcoin?
05:20 Speaker B
Yeah, Bitcoin is a long-term hold. We see it going to a million dollars over the next decade. And so we want our investors to experience that run. But we understand that Bitcoin can fluctuate by 50% on any given month. So you have to be able to build a bridge for the current investors who, who, um, aren’t used to that type of volatility to weather those storms. Otherwise, they’re going to get shaken out at the bottom, bottom and and and brought back in at the tops. So, uh, we use the S&P 500 index to do that, to kind of smooth the ride and that’s that’s how we, uh, are our methodology for keeping investors in for that 5 to 10 year, uh, time horizon.
06:11 Speaker A
Um, Mike, how important do you think the CLARITY Act is going to be for the the crypto ecosystem? Not just in terms of sort of mechanically new products being introduced, et cetera, but also the effect on price. Do you think that there will be a meaningful effect on price?
06:33 Speaker B
Yeah, I think there’s, um, all of the regulation that’s coming out, um, really, Julie, over the last, um, year and a half, things have completely flipped because, um, you can talk to any OG Bitcoiner, but, uh, really the US regulatory environment was, uh, one of the most anti-crypto, um, environments in any country across the entire globe. And remember, Bitcoin is a global product. There’s countries all around the world implementing it, and it’s good to to factor that in. Um, in terms of regulation now, uh, since the new administration stepped in, we now have a a pro-crypto Treasury, Commerce, uh, SEC. Um, Fed chairman will, we’ll have to wait and see. Um, but in terms of Congress, I think Congress and and legislation and more, um, you know, in terms of the CLARITY Act and some of these others that are that are out there, the regulat- the regulations are going to, um, it’s part of the adoption, the mass adoption of a new technology, and I think it has to happen. And even moving, um, the SEC regulation more over to, um, the CFTC, um, the Commodities Futures Trading Commission, because it’s they’re viewing it more as a commodity is also a good step.
08:33 Speaker A
Mike, thanks so much. Appreciate it.
08:36 Speaker B
All right, thank you, Julie.
08:38 Speaker A
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