Please welcome back to the program Mr.
Andy Beer, managing director of asset management at GSR's man of the new title.
I got to make sure I get it right.
Welcome back, my friend.
Nice to see you.
Give me your latest take on what we're seeing in terms of price action for Bitcoin and the other major crypto giants out there.
We've seen the bottom of the crypto bear market yet.
It's, it's hard to tell, and all the pundits are out there saying, is this the bottom?
Is it not a bottom?
Let's remember pundits right now are conditioned to not call a bottom.
Bottom, right, because any bottom over the last year would have been a false bottom.
So if anything in a punditry bias, they'll be hesitant to call bottoms and they'll call for Bitcoin 50K, Bitcoin 40K.
So I would say when you're reading things, note that it takes extra courage to call the bottom right now.
I'm not doing it.
Others aren't doing it, but there's definitely a bias that way.
I liked the price action of that last drop actually from 70s to 600 because it felt like.
Capitulation.
It brought volatility back to the market.
It brought a little bit of volumes back.
Even funding rates and PRPs started to rise a little bit.
And then this news coming out of Sunday night, which pumped up Bitcoin price about 10% and also around 10 to 20%.
I think it's healthy.
It will draw attention back to the market.
So overall, the market's healthier than when it's going like this.
Andy, we are seeing tremendous demand right now for yields.
Yes.
Give me your take on the latest developments that we should know in terms of stable coin.
Yield defy yield and how it all connects to the same conversation.
While the markets are flat, people are sitting on a lot of stable coins, and whether they're posting those stable coins as collateral or they're holding on to it as dry powder, they want yield.
So the thing that in our asset management business that we're getting the call for most is how do I get yield, how do I get safe yield?
How do I get yield that I can unwind in one day?
What's the term premium yield looking like?
So one thing that we always like to look at is where are traditional finance yields right now.
I look at SOFA, if I look at the Treasury curve from one month out to one year, those all around high 3%, right?
3.6%, 3.7%, 3.8%.
So I checked out the rates on Ave, on Gauntlet, on Steakhouse, on Morpho.
These are all Defi borrow, lend platforms and vault platforms.
Guess where yields are 3.6%, 3.7%, 3.8%.
They're all about the same, which implies that there's no premium.
You're not receiving extra money to.
Take DFI risks right now.
Now I don't think that that implies that DFI is as safe as US Treasury.
What it does imply right now is that there's so much demand for yield and so little demand for leverage that those rates are all the same right now.
I don't expect that to persist, but it is quite striking.
Andy, crypto investors woke up today to, well, they wake up every day to a lot of headlines.
They do.
Sometimes they never go to sleep and they don't wake up at all, correct?
Well, hey, this is the tough part.
You follow a world that trades Saturday, Sunday. equity brokers, but this is the big one today.
Yeah, what's waking up?
BlackRock launching a new Bitcoin ETF generates income specifically using covered call strategies.
How big of a deal is this?
I think it's following Goldman Sachs filed for a similar ETF, which was their first a couple of, maybe a couple of months ago, and Greyscale and others have had products like this for a while.
In the crypto native world, we're seeing a tremendous appetite for option selling and a lot of tokens, including Bitcoin.
Because people want to feel like these tokens, especially those that don't have a stake in it like Ether or Solana, they want them to be spinning off some kind of income.
They want them to be working for them.
This has compressed Bitcoin volatility quite a bit right now, so you're getting less for your sold call options than before.
You end up with a profile where you're getting some cash out in exchange for more or less giving up some of the upside in your Bitcoin holdings.
So it's a different way to experience Bitcoin ownership.
I wouldn't call it yield, and I'd be very suspicious of others who call it Yield, but it is an interesting way for people who want to combine some long Bitcoin exposure with some income coming in.
The fact that BlackRock is launching in there means that they see demand for this just like we do in the crypto native world.
Andy Bear, the worst part of my interview with you every time you're on the show is that at some point it has to come to an end.
I'm so grateful to see you again, my good friend.
Take good care of yourself.
Andy Bear, managing director, asset management at GSR.
