Yahoo Finance’s David Hollerith joins the Live show to discuss bitcoin falling below $19,000 ahead of the Fed’s rate hike decision, and Binance and FTX bidding for Voyager.
BRAD SMITH: Bitcoin hanging above $19,000 ahead of the Federal Reserve decision this afternoon. The cryptocurrency's market value has declined by nearly 60% this year. Yahoo Finance's David Hollerith is here with us in studio today to talk all things crypto. OK, so what should we expect the crypto reaction to be, especially given the Fed policy decision to come later on this afternoon?
DAVID HOLLERITH: Well, Brad, at least expectations as far as yesterday afternoon were not high as far, as how Bitcoin would respond to this. It's typically highly sensitive to interest rate hikes in the past.
So that being said, you know, there are some very bearish takes out there, looking at Bitcoin going as low as $10,000 per coin. But that being said, I think the real question is more about whether or not we'll see the lows we saw this summer in the asset. So you know, we're looking at sort of the upper $17,000s for the price to see how it will react.
But that being said, you know, obviously, the correlation with the stock market has gotten to record highs, especially in the last month for Bitcoin. And so right now, you know, it's essentially a leading indicator, maybe, for how the market might react.
JULIE HYMAN: Yeah, I mean, I've seen a lot of commentary, specifically between the correlation between tech stocks and Bitcoin as well.
There's another story that you're watching that has been so interesting to follow, right? It has to do with the future of Voyager. Binance and FTX appear to be, reportedly, some of the top bidders for Voyager or the bones of Voyager, I guess. And this is interesting because it's been-- as we've been tracking the fallout from cryptos' crash, Binance and FTX appear to be two of the strongest surviving players in the space.
DAVID HOLLERITH: Yeah, yeah, that's a great point. So Voyager is holding sort of an auction for their assets in bankruptcy court right now. And you know, at their peak last year, the stock market capitalization was valued at $3.9 billion. And a report from "The Wall Street Journal" last night cited sort of Binance making a bid of about $50 million. So for Voyager, that just goes to show how far the price of its assets have dropped.
But on the other hand, it's sort of a steal if you want to get into crypto lending, which, you know, despite the summer insolvency issues, it seems like that game is not up yet.
JULIE HYMAN: I want one more just on the merge aftermath, if I may, because this has been such a fascinating time in Ethereum land. And there were so many Bitcoin maximalists out there for so long-- I think of Michael Saylor and the additional purchase that MicroStrategy just made-- like are we seeing more divergence in the crypto community between those maximalists and then people who have gone more towards the functional cryptos, like an Ethereum?
DAVID HOLLERITH: Yeah, Julie, I think that's a good point. It's definitely the case. In some ways like very hard core like Bitcoin investors actually think of themselves as sort of critics of the rest of crypto, in a way, in how they view the asset. I mean, they think of cryptocurrency essentially as just money. The way the Bitcoin blockchain is managed is completely different from Ethereum.
So you sort of have this desire for censorship resistance, which is sort of the Bitcoin camp. And then the rest of crypto is sort of on a spectrum of, you know, software and like more akin to what we see with like Silicon Valley. And Ethereum is actually not the farthest on that spectrum.
There are much newer chains, blockchains, that are basically all powered by Silicon Valley venture capital. So that, obviously, is a very different model, much more like a company even though they are decentralized projects than say something like Bitcoin. But Ethereum sort of is kind of trying-- it's trying to sort of toe that line in between.
And after the merge, there've been a few developments to where we're gonna have to see what decisions they make in terms of how compliant they want to be with governments to sort of figure out where Ethereum falls.
BRAD SMITH: Wow.
JULIE HYMAN: Cool. Well, luckily, we have around to help us-- help keep us posted on all of that. Thanks, David. And it's great to see you in person--
DAVID HOLLERITH: Yeah.
JULIE HYMAN: --here in the studio.