Bitcoin is back above $84,000 this morning. Crypto ETFs lost $1.3 billion last week. Wall Street is now talking about tokenising everything from stocks to IPOs. Joining me to unpack it all again is Alice Liu, Head of Research at CoinMarketCap. Alice, welcome back to Wall Street to Mena.
Bitcoin is back above $84,000 but still down on the year. What is the market telling you this morning?
We are seeing Bitcoin finally stabilising around $84,000. It is a bit of a drop since the last pump. But right now the market seems to be resetting the mood as opposed to a complete breakdown. Why? Because the sentiment indicator on CoinMarketCap right now — the Crypto Fear and Greed Index — a month ago was at greed, but now we are dead centre neutral. That is a great setup for the market going into the CPI reading this week. In terms of investor incentives, the majority of investors actually stayed with Bitcoin. We do not see the market getting squeezed either way.
Crypto ETFs lost $1.3 billion last week after taking in $3.5 billion a few weeks earlier. Is Wall Street changing its mind on Bitcoin?
The $1.3 billion outflow was mostly driven by the ten-year rate. Last week we saw a bit of panic in the bond market. With the ten-year yield above 5.2% today — and this is a non-trading day — we are likely to see the same liquidity dynamics on the bond market side. But what is more important to me is that investors are not abandoning Bitcoin. They are just readjusting based on the rate environment. The biggest outflow was on the Bitcoin side — from Fidelity Bitcoin Trust and Ark Investment Bitcoin Trust. But the biggest one — BlackRock — stayed put. We did not see much outflow there. Ethereum is another issue — we did see around $500 million in outflows for Ethereum over the past nine days.
Why does Ethereum still feel like it is lagging?
It looks scary if you just look at the pure outflows. But what is important here seems to be a rotation. The biggest outflow from Ethereum came from the BlackRock instrument — to me that reads as a few big allocators readjusting their positions. But if you look at what we are reading on CoinMarketCap’s Altcoin Season Index — we are actually hitting 66 out of 100, the highest for this year. That means the market seems to be rotating out of Ethereum into some other coins. That rate reads to me as a reallocation from some of the big investors.
You just came back from Token 2049 in Singapore. What was the number one topic among institutions?
We saw Nasdaq on stage. We saw Morgan Stanley, BlackRock — a lot of the leaders in the space were all on stage. They were not talking about Bitcoin. They were talking about tokenisation. Years ago, crypto was seeking approval from Wall Street for legitimacy. But right now they shifted — because it is Wall Street asking crypto for distribution. The Nasdaq CEO specifically addressed that tokenising the financial market, especially from the settlement side, can release a lot of the collateral locked in for institutional clients on weekends. For capital efficiency and for financial market rails, that is going to be quite a significant innovation layer.
Nasdaq says it will tokenise stocks as well. What actually changes for an ordinary investor when that happens?
For the trading perspective, there is no change for investors — when I buy a share, the share is just settled on blockchain. The trading process does not change. But for the financial infrastructure provider, it changes a lot. Nasdaq mentioned they will start with tokenising the settlement first and will encourage 23-hour trading per day starting from the 6th of December this year. Then gradually they will do 24/7. For investors, that means a lot of the settlement can be done more seamlessly. And again — the key target is not retail, it is institutions. It is for institutional clients to not lock up their capital over the weekend. There will be a lot more credit solutions and yield strategies on top that will make the financial market a lot more efficient.
How big is the tokenised real world assets market right now — and what should investors be careful about?
Tokenised real world assets have gone through 3x — 300% growth for the past three months already. Based on CoinMarketCap data, we have around $40 billion in the entire tokenisation category today. The majority is still Treasuries. Number two is commodities — largely gold. Then private credit followed by equity already trading on secondary markets. What users need to pay attention to is that right now some tokenised stocks are not the real stock underneath — meaning you do not have voting rights and you do not have dividend payouts. But as Nasdaq, BlackRock, and Morgan Stanley go into the space, they are going to tokenise the actual equity itself, which will come with all those rights. So pay attention to the instrument you are buying and the liquidity pool where that instrument is trading. The number one player in tokenised stocks right now is still very much xStocks — but Binance B Stocks is catching up very fast. Give it another three months and I think we will see a lot more mature instruments and deeper liquidity coming.
Thank you so much for joining us today.
Thank you very much.
