Chapter 1: What are the implications of the CME outage on the crypto market?
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We've been watching Bitcoin almost as much as stocks lately because it's been so intrinsically tied to the markets. Remember when it was supposed to be its own universe? That was the whole point, the decentralized cryptocurrency. It is bouncing back today, up $5,400 and approaching $92,000 a coin. So maybe it bottomed.
unclear, as we've had multiple folks, including Mike McGlone at Bloomberg Intelligence, predict another crypto winter. Michael Saylor also preparing for one at Strategy. Despite the love this administration has shown, the embrace of the crypto industry, as we remember the ways with Donald Trump since he took office. Listen.
Last year, I promised to make America the Bitcoin superpower of the world and the crypto capital of the planet. With the right legal framework, institutions large and small will be liberated to invest, innovate, and take part in one of the most exciting technological revolutions in modern history. For years, you were mocked and dismissed and counted out.
You were counted out as little as a year and a half ago, but this signing is a massive validation.
a massive validation as we watch the gyrations in the crypto market. Pleasure to spend some time with Gary Gensler as we consider the crypto space regulations and the plumbing in the market. He's with us live now, former chair, of course, of the Securities and Exchange Commission, professor of the practice at MIT Sloan School of Management. Mr. Gensler, welcome back to Bloomberg TV and radio.
Is that you buying the dip in Bitcoin?
Joe, it's good to be back and good to be with all of your viewers. But no, I'm not participating in that market.
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Chapter 2: How does Gary Gensler view the current state of cryptocurrencies?
What do you think is behind it?
Look, I think it's a risk asset. And the American public and the worldwide public has been fascinated with cryptocurrencies. But it's a highly speculative, volatile asset. And putting aside Bitcoin for a minute, all the thousands of other tokens. Not the stable coins that are backed by U.S. dollars, but all the thousands of other tokens. You have to ask yourself, what's the fundamentals?
What's underlying it? You don't get a dividend. You don't get usual returns. And so the investing public just needs to be aware of those risks in this highly volatile space.
What do you make of the politicization of crypto? The fact that the Trump administration has become involved to this extent has reportedly turned off some investors as they watched the Trump family enrich themselves with gains like this. Is this a Democrat versus Republican thing now?
No, I don't think so. I mean, it's about our capital markets. The U.S. have the greatest capital markets and they benefit from common sense rules of the road. When you buy and sell a stock or a bond, you want to get various information and you want to know that you're getting the same treatment as the big investors. That's the fairness in these capital markets that are so important.
I've heard a lot about the impact of ETFs on this space. That's something you know a lot about, the initial ETFs that were greenlit to start buying crypto. Did that just change the plumbing in the crypto market here by tying it directly to the stock market?
Well, ever since antiquity, finance goes towards centralization. So it's not surprised that that which started as a decentralized ecosystem, and that was the vision, has become more integrated and more centralized. investors can express themselves in gold and silver through exchange traded funds.
And as of a couple of years ago, actually, all the way back to my first year in the job, they were exchange traded funds on Bitcoin futures, just as there is for gold and silver.
Yeah. Well, Mr. Chairman, I want to ask you about speaking of plumbing in the markets, what happened at the CME last week and whether you think the CFTC should be investigating this outage? Should the CME be facing additional scrutiny?
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Chapter 3: What risks should investors be aware of in the crypto space?
Thank you, Mr. Chairman, for the time.
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