Bitcoin (BTC-USD) is having a breakout year in 2024, recovering from a long slump with the Securities and Exchange Commission's (SEC) approval of a spot Bitcoin ETF product. Now, the crypto community is eagerly watching the SEC's next decision: the approval of a spot Ethereum ETF linked to Ethereum futures (ETH-USD).
Swan Bitcoin Chief Investment Officer Raphael Zagury appears on Market Domination Overtime to discuss the outlook for these leading cryptocurrencies, as well as comment on how the 2024 US Presidential election will impact the cryptocurrency industry and the possibility of an Ethereum ETF.
“If you look at where we are right now in terms of volatility, volatility is pretty low. I'd say it's in the bottom 10% of 5% of periods of low volatility,” Zagury said. “And if history is any guide to what's going to happen in the future, I think the good news is that periods of very low volatility in Bitcoin tend to have negative returns if you look 60, 90 days out. But in the short term, a lot can happen. Traders are controlling the price…”
For more expert insights and the latest market trends, click here to watch this entire episode of Market Domination Overtime.
This post Luke Carberry Morgan.
Video Transcript
MicroStrategy is getting further into Bitcoin, with plans to buy another $786 million worth of the cryptocurrency.
Bitcoin has benefited from the launch of a spot Bitcoin ETF this year, but crypto investors are already eyeing the market’s next milestone with a spot Ethereum ETF.
It will likely be approved this summer and there will be further discussion on this.
Swan Bitcoin, Chief Investment Officer Rafael Zagri, on top of all of this, we were talking about politics.
There has been active lobbying in Washington regarding the cryptocurrency industry.
That being said, we haven't seen much movement in terms of price fluctuations recently.
Raphael.
So what should investors look out for there?
Well, thanks for the invite, Julie.
I'm happy to be here.
First of all, you know, when we talk about double haters, like we were just hearing about that topic, I think cryptocurrency is becoming one of those topics that can have an impact.
There are many people who have a double dislike for this.
Unfortunately, I think a lot of people have lost a lot of trust in the system over the last few decades.
And if you have a team like that and politicians are on one side, they might run a double jerk, but going back to the price, which is what you said, the price of Bitcoin has been very stable, if you look at the last month or so, this is nothing new.
This has happened in the past.
If we actually look at the price of Bitcoin and its movements, we can see that in most cases it has remained flat or is trending downward.
And isn't it true that most of the upside is actually earned in a very short period of time?
And I always say this is why it's a very difficult asset to hold for the long term.
Because in most cases, they will endure weeks or months of pain for the glory days. That is the typical trajectory of Bitcoin returning to just numbers.
If you look at where we are right now, from a volatility standpoint, volatility is pretty low and I'd say 5% is the bottom 10% in a period of volatility.
And if the past is any guide to what's going to happen in the future, I think the good news is that if you look 60 to 90 days out, periods of very low volatility in Bitcoin tend to be periods of offside returns.
But in the short term, a lot can happen.
Traders control the price.
And I think it's always important for us to look at the bigger picture.
Let’s go back to basics and consider where Bitcoin could be heading.
Not 90 days from now or 60 days from now, but five years from now, 10 years from now. Because that's what we should be thinking about Bitcoin as an asset. Raphael is also interested in when he talks to his friends and family and they ask him why he owns cryptocurrency.
I'm curious, what is the reason for telling them?
Because I feel like the story has changed, you know, Raphael used to be idealistic, and at least among the true believers, this was really considered a paradigm shift.
Well, do you think that still applies or would you tell them?
It's a store of value.
It is a medium of exchange.
what is the reason?
So, Josh, you know, I come from a traditional finance background.
I worked at Golden and I worked at Mellow.
I worked at Deutsche Bank.
I've worked for every major bank and have been trying to tell people about Bitcoin for years, but most people just stay away.
And I think it's because, as you said, a lot of people are trying to set up exchanges first and put Bitcoin alongside PayPal and other technologies.
But Bitcoin is much bigger than that.
From my perspective.
As an economist, I believe Bitcoin is the best savings technology we have ever seen.
If you look at Bitcoin, you know, it's a monetary policy written in code, transparent, and completely predictable without changing for 15 years.
right.
There is not a single central bank in the world that implements monetary policy close to or similar to the monetary policy seen with Bitcoin.
And at the end of the day, when we talk about inflation and predictability, it is the volatility of inflation that really undermines the planning of economic agents.
If we hit the central bank’s 2% inflation target, then by definition we’re already in a very bad situation.
But if they could achieve 2% per month or year without making any changes, that's already bad.
But that's not the case.
Some months there will be big fluctuations and the inflation rate for the goods you buy may be close to 10% while other months it may be negative, and if you don't plan for that it will have a negative impact on your finances in the long run.
Not only will the printing of money continue, but prices will continue to fall.
And, you know, the world we live in right now is completely unpredictable, and Bitcoin's unpredictability is heightened as well.
I think this is a measure of predictability in a world where almost nothing is predictable.
If you look at the Bitcoin price chart, it's an indicator of predictability, and I don't think anyone would say that 2% inflation means growth.
So growth is accompanied by inflation, and that's how economies usually work.
It is true that inflation was very low prior to the current regime.
But I want to put that aside for a second and go back to what you were saying at the beginning, Rafael, when we were talking about politics and how people in the crypto community are very focused on this election.
Well, what would you advocate as the biggest policy change that would help the cryptocurrency industry?
Well, if I had said in the past that Bitcoin would be a topic in a presidential debate, people would have said that was crazy, that it would never happen, that it could never happen, but here it is.
You know, this started with senators talking about Bitcoin, then more people talking about Bitcoin, and now Trump came along, which was a surprise to most people, you know, some of us have been into Bitcoin for a long time.
When I hear him say something positive that he did.
Well, like I said at the beginning, I think this could be a really big change for people who are very frustrated with a lot of what's going on in politics.
Yeah, and then on top of that, I think there was a lot that went into, for example, when you look at the ETF S getting approved, and the whole process of getting the Bitcoin ETF approved, it was very difficult.
But at the end of the day, we finally have something we've been looking for for a long time – more support and clarity on how we should hold Bitcoin and how we should wrap it.
And I think that's all positive. And I think at the end of the day, even when we're talking about an Ethereum ETF, all ETFs should be approved and I think that's something that the SEC should be increasingly focused on, which is what they started doing from the beginning, when they had Securities Act 3433 and 34.
The overall goal was to improve transparency and disclosure for prospectors that really highlight the risks.
And I think there's an opportunity here for the SEC to get back to its original mission and help with that.
But overall, it's very good to see this development and very positive.
I think we're definitely heading in the right direction.
Raphael.
Nice to meet you.
Thank you for making time for us.
appreciate.
thank you.
