00:00 Speaker A

starting on crypto Tom, and I’m starting with you here. I enjoyed your note uh this morning. You broke down very clearly why you think we are seeing this volatility and ultimately the sell-off in crypto prices prices. For those that didn’t get your note like I did, break it down for us.

00:27 Speaker B

Sure, Brian, thank you very much for having me on. You know, essentially what we’re seeing in in crypto is that it reveal it’s revealing itself to still be just primarily a speculative asset. You know, I think with all the positive headlines we’ve heard on the policy front over the past year including, you know, a very pro-crypto administration and more people buying crypto by ETFs, companies having crypto on their balance sheets. I think a lot of investors thought that it’s maturing beyond just a speculative asset. But it’s not there yet. And I think that what we’re seeing in this 30% decline from the highs is, you know, there’s there’s no there there, right? There’s no specific event that’s caused this. There’s no dramatic change in the narrative.

01:21 Speaker B

The bottom line is the only reason to own Bitcoin and crypto in general is because you think someone will pay more for it tomorrow than you bought it for today. And if that opinion changes, then down it goes without a lot of support. So, over time is crypto maturing? Absolutely. Is it becoming more fundamentally demanded? Absolutely. But it’s still very early in that process and it’s still a wild ride, as we’re learning.

01:49 Speaker A

Tom, if we are headed towards a crypto winter and if you think that is in fact the case, how low could Bitcoin go and why?

01:58 Speaker B

Oh, I think if we see a break, you know, below 81, 80,000, I think kind of a trap door opens on this thing because in the end, we’ve had a lot of sort of late hands come in recently, especially with the advent of these ETFs. If you see investors start tax loss selling into the end of December, then I think you could easily see this you’ll go down into the 70,000s or even the 60,000s very quickly, possibly, you know, before year end, if you get a lot of heavy tax loss selling, because again, there isn’t a ton of fundamental demand to show up. And so it it it really could get ugly.

02:37 Speaker A

Brooke, on the positive side, getting some news that of Bank of America that I know you’re following on their crypto efforts.

02:51 Speaker C

Yeah, a vote of confidence from Bank of America despite this crypto sell off that we’ve been seeing over the past month. Bank of America now recommending that clients allocate about 1 to 4% of their portfolio with crypto.

03:07 Speaker C

And that definitely is a vote of confidence from one of the biggest financial firms. Of course, would be interested to see where exactly this ends up going in 2026. But some of the ETFs that will include, they said starting January 5th, the firm’s CIO covered Bitcoin ETFs will include the Bitwise Bitcoin BTF, Fidelity’s wise Origin uh Bitcoin Fund, Grayscale’s Bitcoin mini Trust and BlackRock’s I shares Bitcoin Trust as well. And some of these have definitely seen, you know, some momentum at the open after this major sell-off. But the fact that a financial firm is giving this vote of confidence despite this sell-off and really sort of hinting that this is the future that investors should make this part of their portfolio strategy was definitely a vote of confidence that it seems like the market needed right now.

04:02 Speaker A

And Inez, where are all those folks that said crypto was like gold? Where are they?

04:09 Speaker D

Look, um, you’ve got the street uh Wall Street that is expecting some volatility uh over the next couple of weeks. There’s some ranges that are being talked about. As Tom said, if it breaks below 80,000, it could well push below 75,000. There’s some ranges anywhere between 70 and 100,000 to the end of the year. Uh certainly the fact that you had ETF outflows posting their second worst month in November, uh on record is not uh is not bullish for crypto. uh fund managers may be may have been just trimming positions and going into stocks instead of crypto. Um but nevertheless, there is an expectation that 2026 could be different, particularly if there’s a new Fed chair, particularly after this uh if if there is a 25 basis point cut this month, what will be the narrative going forward? Will there be a pause? That would not be bullish for Bitcoin, but if you do see sort of a regime change next year, if Hasset is is placed as the Fed chair, uh Wall Street is expecting this to be a bullish sign for crypto in general.