Bitcoin bounces after drop from all-time highs: What to watch

Bitcoin bounces after drop from all-time highs: What to watch

Bitcoin falls back from its all-time highs — Here's what four experts are watching

Bitcoin bounced on Friday, though ended the week nearly 6% lower.

The cryptocurrency had been under pressure earlier in the week on fears of a regulatory crackdown from the new Biden administration.

Bitcoin was on a tear up until two weeks ago, topping $40,000 on Jan. 7.

Here's what experts are watching now.

Steve Weiss, CIO at Short Hills Capital Partners, is skeptical bitcoin can make the leap to everyday currency.

"I don't believe in bitcoin. There's no way that it's going to be a currency until the volatility stops. You can't walk into a grocery store with $100 of bitcoin in your pocket and by the time you get to the cash register, it's worth $50. … It'll still go up and down, still be a spec trade, but that's what it is, call it for what it is."

Jason Gardner, CEO of payment platform Marqeta, explains how the company has partnered with Coinbase to streamline bitcoin-to-currency transactions.

"Bitcoin, when you hit $30,000, people want to begin to spend that at the point of sale and you can't just spend cryptocurrencies at the point of sale. In our partnership with Coinbase they're leveraging our just-in-time technology to really connect cryptocurrency to the point of sale and instantly convert that to, say, fiat currencies, which is obviously acceptable at the point of sale, and then they can authorize and decline those transactions based on the Coinbase user's cryptocurrency balance so in a way, it creates a pressure valve that's releasing so as we see the cost of bitcoin rise, these consumers can then spend at the point of sale."

Tom Jessop, president of Fidelity Digital Assets, sees the pullback as a natural pause.

"We doubled from September to December – we went from $10,000 to $20,000 pretty quickly. And then really December to early January, we doubled again. So I think this is a healthy phase of consolidation for the market. I think, given that you know this market is still very much in its adolescence, it's hard to attribute price activity to specific factors. One interesting thing about the blockchain is that you can actually look at the data and you can see where the money is moving, there have been some reports recently that show there's actually some underlying bullish trends on the network where investors are moving coin off exchange. Typically what you see is investors move coin on exchange as a precursor to selling. So I think this is just some healthy profit-taking and some consolidation."

Terry Duffy, chairman and CEO of CME Group, explains how the marketplace caters to the interest in cryptocurrency.

"It's fascinating what's going on with the crypto-world in general. … Our contract is five bitcoins per one contract. So it's an extremely large institutional contract. We did that on purpose. We did not want to attract the small retail participants into that new asset class, but we are trading a couple billion dollars of notional a day, each and every day of our bitcoin contract. We're seeing record open interest and trade in it. There's a lot of interest in this and so we announced that we're going to list ethereum futures coming up in February. We're excited by that. But again, we're going to take the approach that we're going to walk before we run when it comes to these cryptocurrencies. We understand there's still some concerns by some people out there and rightfully so. So, but at the same time we can't neglect the fact that the world is looking for different ways to conduct their commerce and crypto seems to be one of the ways they want to do it, so we want to make sure we can offer a risk management tool for those participants."


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