Yahoo Finance’s David Hollerith joins the Live show to discuss bitcoin hovering near $23,000, inflation, the strength of the US dollar and the outlook for crypto investor interest.
JULIE HYMAN: Also, let’s talk about what’s happening in crypto today, because we’ve been looking at Bitcoin after it saw a big monthly gain last month, along with other risk assets, right? We saw Bitcoin rise almost 24% in July. It was the biggest monthly increase since October 2021.
A bit of a setback today, but still over 23,000. David Hollerith, we caught up with him for a little bit about what’s going on price-wise with Bitcoin. So what’s the latest talk around what’s going to happen now David?
DAVID HOLLERITH: Well, I think if we go off of what a lot of traders said to me last week, it’s that cryptocurrencies are still a macro-driven asset risk. So likely what we’re going to see is that these moves for cryptocurrencies, especially Bitcoin is going to depend on the data-driven narrative that Powell has explained that the Federal Reserve will use to gauge what they’re going to do with monetary policy going forward. So from that scenario, what seems to be two big events for cryptocurrencies, more broadly, will be something like the consumer price index release, and then the jobs reports. Two sides of how the Fed will think about inflation.
Now added to that, but I think another thing to point out outside of the rate hike, which was largely expected last week by the market, is the strength of the US dollar that really defines these assets. And interestingly, on July 13, the strength of the US dollar peaked. And since then it’s down about 2% as of now, and that was the same day that Bitcoin actually bottomed. So to some extent, if we just look at cryptocurrencies at a much broader level in terms of how they relate to other assets, we can only see the US dollar index going down. And we can get an understanding that risk assets, like cryptocurrencies, are expected to do better in this scenario.
BRIAN SOZZI: And David, just given the higher move we’ve seen in crypto, is there any hot area of the market that you’re focused on?
DAVID HOLLERITH: Yes, Ether has looked particularly bullish. We call everyone Bulls in this type of market. Obviously, both Ether and Bitcoin are still trading well below their 200-day moving averages. But Ether has this whole narrative around their software transition from proof of work to proof of stake.
And the developers behind all of this have come out with a stronger narrative when it comes to reporting for these blanket tests leading up to it. And they have actually set a soft date for the transition to begin, at the end of the week of September 19. So clearly, crypto investors love a narrative of something actually happening in the industry that could mean more improvement in terms of innovation.
And really, there are many questions about the Ether merger and what it will mean for the cryptocurrency. But one clear is that it is the energy consumption, the Ethereum blockchain will reduce by 90%. So it’s a big win that Ethereum supporters are certainly claiming now.
BRIAN SOZZI: David Hollerith with the pulse on All Things Crypto Thank you very much.