New York morning trade, we are looking at risk assets including Bitcoin and gold moving higher, and this does come on the weaker than expected headline on foreign payrolls report.
But the second quarter of 2026 did deliver a brutal reality check for crypto.
We saw Bitcoin sliding to its lowest level since September 2024, while faring even worse, sitting nearly 70% below its record high from late 2025.
Now investors.
Away from spot crypto ETFs as inflation rising rates, as well as a massive capital rotation into AI siphon liquidity out of the market.
Well joining us this morning to make sense of these confounding market dynamics is Andy Bear, managing director of asset management at GSR.
Now Andy, good morning.
You're joining us ahead of the holiday weekend.
We got that jobs report.
So what do you make of this morning's price?
First of all, you're promising a lot, saying I'm going to make sense of all.
The jobs report is great because any sense that there will be a little bit more dovish interest rate policy, I think the market will read that really well.
Um, it is becoming more and more surprise territory that will make progress on the legislative side.
So the monetary policy side, I think is going to be really important.
Uh, but as you say, we're coming off a really confounding quarter which had some really interesting dynamics.
But for sure, a lot of people who entered the market via large cap major crypto ETFs decided to pull out.
Yes, so there are a lot of moving parts here and we're looking at liquidity as well as volume, and it's interesting to see this price action this morning and you did point out what we saw in terms of Solana.
So I do want to pull up that chart so that we can see what's happening.
And I also understand you have another.
Chart that also breaks down some of the activity we saw this quarter.
Solana's just been amazing in the last couple of weeks, and it just goes to show that really kind of trying to pick which individual name is going to decide to wake up and experience a momentum is very difficult.
So Solana as of this morning, it looks like it's erased its Q2 loss, which is pretty powerful, right?
The thing that really I think surprised us the most about Q2 is that usually when crypto markets start to pull back, the safer, the safe havens are going to be the bigger names, and Bitcoin of course will be the safest haven.
What we saw in the second quarter was that actually, The real all coin section.
I like this Coin desk 80 index which I actually built in my old role, which really looks at everything outside the top 20 names and typically it's a very volatile index.
It tends to really tends to underperform the majors over time because a lot of these tokens that get started.
Don't really find momentum and they kind of stay in the small cap kind of world and they tend to dwindle over time as attention shifts.
Yet that index was only down about 7% in Q2, whereas Bitcoin was down 14.5% and of course Ether was down more than 25%.
So we really had kind of an anti-quality.
Effect in the 2nd quarter, which I think should over time reverse, which would be good for the majors versus the all coins.
It also just shows that so much of the activity went into major ETF holdings and also, you know, Treasury companies, and those are the two areas where there's a lot of new entrants, a lot of microscopes on those positions, and that's why.
We saw, I think, weakness in the majors.
Yes, and Andy, you're joining us ahead of the long holiday weekend here in the US, and that means we are into the month of July and we are entering the second half of 2026, which is hard to believe.
But if the first half is anything to go by, we can expect uncertainty as well as potential volatility.
So what are some catalysts you're paying attention to?
Well, first of all, We always say this again and again that the attention span of many markets, and crypto is a really strong example of this, tend to, you know, have about a one quarter attention span, and the calendar quarters tend to mirror that.
There's a psychological effect that we feel like we've turned over a new leaf.
There's a lot of news reports.
What things did for the Ether had its first period of negative performance three quarters.
In a row, I believe, ever, so people tend to like finish the chapter, they put the bookmark in, they take a nap, they wake up, there's a new chapter, and that's when new energy can enter the market.
Certainly since June 30th we've seen that in the majors.
We've certainly seen it in Solana.
So you don't know, right?
I think a lot of negativity.
One thing we talked about two weeks ago.
Uh, just about all of the negativity has been priced in.
It's very hard among all your guests and among all the press to find a hopeful, um, you know, kind of point of view right now.
So we think, um, max pessimism is in place.
If you look at traditional media, it's, they're all taking potshots at the president's holdings or the ETF outflows.
So, and we've seen the capitulation.
Of the micro strategy Security SDRC.
So it feels like just about anything that could be negative is kind of priced in here.
I'm actually thinking that's a good time to think about forming a foundation for a rally, and it's really interesting you mentioned some of those headlines because when it comes to the digital asset space, I know that some of those sensationalist headlines do tend to dominate.
But when we take a look at the announcements that came out.
From some of the companies this week, especially regarding stablecoins, there's a lot that is happening below the surface when it comes to digital assets, especially on the infrastructure side.
So what do you think is important in terms of the takeaway from this week's announcements?
Unfortunately it's going to be the same thing we always say that when you look at stablecoin growth and if you saw those announcements today, you can tell a lot of people want to get into the stablecoin business.
It's a fantastic business to get into.
You can dominate.
You can see how much Tether and USDC and Circle are defending their positions versus this new entrant in the space which has a lot of backing from famous names.
So all of those have to settle onto layer one blockchains.
Ethereum and Sallana are going to take the lion's share of those.
So those are great things to monitor as that activity continues.
There's so much good news about how Ethereum Foundation alumni are.
Setting up shop at different places to try to have a more positive and momentum driven idea for Ethereum's roadmap that should help.
Salon, of course, is very good at being commercial and trying to think about growth in the future.
So those layer one blockchains are going to be very important.
If there's any sense that the Fed is going to be a little more dovish than expected, that will be great for Bitcoin.
So our power trio of Bitcoin, Ether Solon, and our ETF and what we think of as a core portfolio.
Really will stand to benefit over time from these developments.
And finally, Andy, before I let you go for the long holiday weekend, there have been a lot of events in the digital asset space in the past week, and I know that you're coming back from across the Atlantic.
So how has the sentiment been overseas?
The sentiment overseas, I'm still surprised at how little I see in the streets.
I was in Italy with my family over the weekend for a week and Didn't quite see a lot, so I think there's still, let's put it this way, there's plenty of room for adoption to continue out there.
You see fewer Bitcoin ATMs or you can pay for this in Bitcoin or billboards or t-shirts.
So I still think we have to remind ourselves.
It's great to go to a place like that because remind yourself there's a lot of people who are still thinking 99% of their time in traditional finance, so there's there's a lot of road to pave.
Well, Andy, always great having you on the show.
Thank you so much for joining us and have a happy Fourth of July weekend and you.
Thank you.
