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Crypto valuations ‘bear the brunt of the market bleeding,’ CoinShares CEO says

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CoinShares CEO Jean-Marie Mognetti joins Yahoo Finance Live to discuss the outlook for the crypto market.

Video transcript

[MUSIC PLAYING]

JULIE HYMAN: Here, we're seeing cryptocurrencies continue their rally today that began yesterday and a lot of crypto Bulls still confident in the long term prospects for cryptocurrencies as well. Among them Cathie Wood who predicted a million dollar price for Bitcoin by 2030. Let's bring in Jean-Marie Mognetti. He is CoinShares' CEO.

It's Europe's largest digital asset manager. Jean-Marie, thank you for being here. So what are you hearing from clients right now as we have had this recent volatility in Bitcoin. I imagine people who have been in the space for a while are accustomed to this sort of bouncing around, but even so, even for them, the drop has been perhaps alarming. What have you been hearing?

JEAN-MARIE MOGNETTI: Well, first, thank you for having me. You know, we've been in this space since 2013, 2012, and I can tell you that [INAUDIBLE] have seen this time it's still painful and it's still getting used to it. We tend to forget that this thing can happen. So it's always a good reminder.

So our clients are, as we are, getting accustomed to it and getting used to it. The real differentiation is like, is which wave of client is being impacted these days? And you know, you get a lot of new entry in 2021 and these clients were the one which was really used to this cycle, but the beauty of CoinShares product is that we have clients, which are very much with us for the long run. We have clients which are with us since 2015, 2016, and which are experienced this cycle, and they are almost the one educating the community to make them understand how the journey is going.

BRIAN SOZZI: I was surprised this morning to see Cathie Wood come out here and call for Bitcoin reaching a million dollars by 2030. Does a call like that make sense to you, just given where we have seen crypto prices go the past few months?

JEAN-MARIE MOGNETTI: Well, crypto prices the last few months, along with like, growth stock, has bared the grunt of the market bleeding. I think, you know, NASDAQ has probably erased all 2021 gain. Bitcoin and crypto in general are down 50% from the all-time high market cap.

So we definitely, it's a kind of weird situation where people have been suffering a lot so far in 2022. And we see some sign of recovering on the back of some Fed announcement on the back of FOMC minutes, which are not going to be as drastic as people were thinking last week. So the kind of uncertainty we are in where we know the Fed is going to announce something, but we don't really know what people were talking 50 basis point last week, it's going more looks like 25 basis points, we don't really know until we have more certainty and more direction from Jay Powell about the gradual proposition about tapering.

You know, tapering is a big word nobody used for many, many years, and probably some of us never heard. So it's a process. And I think the market is, like, trying to figure out how it's going to end this process in the months and years to come. So to come back to your earlier question about Cathie's evaluation, [INAUDIBLE] I think she put a very-- our analyst put a very strong penetration rate case [INAUDIBLE] to show where it's going to penetrate and how it's going to penetrate the market.

And you know, everybody can go with his own call. [INAUDIBLE] earlier last year to go under grant. It's a very-- numbers are very relative depending on when they are. So we're not going to comment further, I guess.

JULIE HYMAN: So let me ask you a more modest question then. Can cryptocurrencies, and let's just pick Bitcoin for ease of talking about it, can Bitcoin rally this year in the face of Fed tightening?

JEAN-MARIE MOGNETTI: The question is not so much about tightening as how much the Fed is going to be able to tighten. And that's going to be the message we are looking for from everybody. You know, like, Bitcoin as being sold out and cryptocurrencies in general on the face of uncertainty coming in and the rates going up.

It's going to be interesting to see how it's reacting in a bit of a more medium term perspective, but I think Bitcoin still has some room. And it's going to be almost testing the capacity of the Fed to tighten the economy and also the interest rate, and get back the grip on the economy.

JULIE HYMAN: Jean-Marie, we're going to have to leave it there unfortunately. Thank you so much for being here. Jean-Marie Mognetti, who is CoinShares' CEO. Thank you.

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