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The crypto collapse: What the TerraUSD stablecoin collapse could mean for invested firms - YouTube
Channel: CNBC Television
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the carnage in the crypto world
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continued today with bitcoin hideous
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lowest level since december 2020. so
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what does the plunge mean for companies
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like microstrategy which are so highly
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leveraged to these assets for more let's
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bring in coin shares chief strategy
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officer melton de moores mountain great
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to have you with us you know
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at some point in time there was talk
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about more and more companies on the s p
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500 potentially putting bitcoin on the
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balance sheet and that seems like
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that is is
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done i mean that's just
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a pipe dream at this point um what
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what's the ripple effect in your view of
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this what kind of ripple effects will we
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see with bitcoin being where it is now
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absolutely look i think we're operating
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in a really new environment um 50 of the
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s p 500 is down over 50 since the start
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of the year
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investors are de-risking across the
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board while the fundamentals of many
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businesses like coinbase and our
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business coin shares are quite sound um
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price to earnings ratios are very
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healthy i think investors generally are
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very wary of risk they're de-risking
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across their portfolio they're trying to
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stem the bleeding and so we're seeing a
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sell-off we're seeing concerns around
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this downturn i think many investors do
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use uh crypto public companies as a
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proxy for exposure to bitcoin ethan the
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crypto market overall so we generally do
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see high correlations between crypto
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related equities and crypto markets um
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that being said i think many of the
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concerns around microstrategy and the
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bitcoin exposure on its balance sheet um
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are are somewhat overblown um they do
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have some very minimal amount of
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leverage i think there's been extensive
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coverage on the topic but i do think
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because we've always highlighted bitcoin
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and crypto assets have historically been
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volatile we're seeing higher highs also
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higher lows but these assets you know
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they're not cash they're not cash
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equivalents and in the current
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environment i think the market is
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pricing a preference for free cash flow
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and cash on balance sheet
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hey hey melton um it's dan you and i
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were talking earlier in the week and you
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were mentioning despite some of the
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weakness that we've seen in some of the
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major coins in bitcoin obviously um and
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eth in particular here you're seeing
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some data where you're seeing
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institutional inflows into other
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products here talk to us a little bit
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about that because i know that's a
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really important pillar of the bulk case
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here
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absolutely look i think it's always
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really interesting um obviously the
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narrative right now we've seen crypto
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market clap cap hard and decline
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significantly by about a third over the
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last week or so so clearly there's
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there's concern we've seen events like
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this before albeit not at this rapid
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pace the volatility and the velocity i
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think in all markets is feeling like
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it's increased quite a bit um but one of
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the interesting things we track is since
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we're in the business of asset
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management we track product flows we
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issue weekly fund flows report and
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interestingly last week even though
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bitcoin saw 15 price decline there were
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net inflows into bitcoin products around
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45 million dollars of net inflows and
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global aum of bitcoin products the end
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of last week still stood at 30 billion
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around 50 billion across all crypto
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products so again i think investors are
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sitting by opportunistically there are
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investors who are looking to add crypto
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exposure you know one to four percent
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allocation is historically what we've uh
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we've
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advised with quarterly rebalancing so i
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do think there are buyers who are
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looking to add now will those positions
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be massive size possibly not but i do
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think there are buyers who are looking
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at this opportunity as an opportunity to
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accumulate a dca or dollar cost average
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in to position particularly in assets
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like bitcoin ether and others
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malcolm good to see you thank you for
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your time of course melton de meuris of
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coin shares guy you've talked to michael
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saylor the ceo of um of microstrategy
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many times and so i'm wondering what
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your take is on on this exposure now
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that it's
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to the downtown of the bitcoins on the
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downside
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i don't want to speak for michael i'll
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say this knowing him i don't think he's
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going to waver from his view my sense is
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in a week or two from now you'll find
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that microstrategy has probably
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continued to add bitcoin to their
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balance sheet you know i don't think he
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again i'm not speaking for him just in
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mind you know knowing being familiar i
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don't think he's focused on the 10 15
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000 moves he's obviously in this for not
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the next five minutes for the next five
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years with that said quickly about
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bitcoin i tweeted it earlier i don't
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think it's coincidence that bitcoin
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topped out around the same time this fed
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became
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responsible late in november because i
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think bitcoin was born out of the fact
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that central banks are running amok and
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now that they're trying to get their act
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together
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bitcoin and crypto's been cut in half
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the trigger for bitcoin to go higher
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again in my opinion if for whatever
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reason this fed blinks be it market uh
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reasons or otherwise i think bitcoin
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goes parabolically higher well that's
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dan why you bought a lot of crypto today
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right not a lot but you bought crypto
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today because the high correlation the
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correlation between bitcoin and the
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nasdaq is at an all-time high yeah so
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that's the same thing when i think of
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some of these smart contracts like ethan
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and solana i i think of them as like
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maybe a high growth um high valuation
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nasdaq sort of stock that there's like
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ecosystems being built around them
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that's how i think about it from an
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allocation standpoint and i just think
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they've come in so far and i haven't
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bought any in a very long time i just
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think that again i think melton just
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said it dollar cost averaging none of us
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are going to know where that bottom is
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so you start small and you kind of work
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your way into it and you have that
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thesis and you stick with it yeah karen
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you adding to uh your holdings in the
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top drawer that you've got in bitcoin
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in the drawer that no no definitely not
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leave it there
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see what happens
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and tim
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um like it might be more the middle
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drawer for me um i you know i think
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you've got a case where this is the kind
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of pullback that every institution who
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wanted to own this six nine and twelve
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months ago has been waiting for
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i do think institutional adoptions is is
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certainly
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coming more than we've actually seen it
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leave and i think you actually have a
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case where the regulators finally have a
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lot more to go i also think the biggest
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banks in the world and i think the
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federal reserve and central banks
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globally have adopted digital currencies
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and crypto and blockchain that's only
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good for the asset class it's just a
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terrible time for risk
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you
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