Bitcoin Slides, Inflows Grow: Adam Lynch on Crypto Trends, Clarity Act

0:00We welcome Adam Lynch, Director Equity Research Charles Schwab. Great to see you. So, what are your thoughts? Where do we stand now? Some of the flows that we've been seeing in Bitcoin and Ethereum. The price is right now. Bitcoin is a bit risk off as we're seeing the stock market risk off as well. Some of your thoughts. Yeah, sure. Hi, Nicole. Yeah, definitely risk off today. I think that's with, you know, due to the inflation report this morning, making a rate hike maybe a little bit more likely. I think they odds of that shot from 60% up to 74% or so. So that would be a negative for our risk assets here. But yeah, they're both off a bit. Bitcoin's around 77 K Ethereum's just over 2400. I think they have seen pretty healthy inflows this month, which has been great to see about 700 million for Bitcoin products, 150 million or so for Ethereum. However, just yesterday we saw outflows from Bitcoin, about 120 million, while those Ethereum products had an inflow of about 35 million.

1:03So that was pretty interesting to see a little bit different than your typical flow. We tend to see more flows going into Bitcoin. But it could be a sign of maybe some growing institutional interest in some of those state the Ethereum products that have been released. But it's something that we're going to keep an eye on. Look, the Genius Act, as I get to the Clarity Act, really sort of set the establishment of the Federal Framework. And now everybody's waiting on the Clarity Act, which I guess has been brought back to life to a certain extent for September 15. Your thoughts is any of it priced in to crypto for the crypto folks they want to know? Yeah, I would say that passage of the Clarity is not priced in. We had been looking at this when it was even more likely to pass when the odds were up around 40 or 50 percent. And we still didn't think it was priced in at that point. We're sitting here right now. We're going to have a procedural vote on the 15th next week. We'll see where it goes.

2:03It needs 60 votes. So we still need to pull some Democrats over to the other side. There's some issues with the, some of the texts that talks about conflicts of interest and President Trump. We'll see. I think it could get through when they pour all this blood and sweat into a bipartisan legislation. They like to see something come from it. So we'll see. All right. Let's talk about what's going on. You know, as I take a look here at the story in crypto and look here at hyperlickwood in particular, which has had this big surge moved higher. And we have the story with the NASDAQ investing 100 million in the crack and parent pay word. It's an event talks with hyperlickwood. What's going on there? Yeah, that's been fascinating to watch over the past couple of weeks. Hyperlickwood caught a lot of attention after President Trump mentioned it at that crypto summit a couple of weeks ago. Then there was some news about them, you know, potentially making an agreement with Kraken,

3:04with Kraken paywords, child company, I guess you would say, to bring their perpetual futures product, hyperlickwood, perpetual futures product here to the US. That could be huge. NASDAQ investing 100 million dollars in Kraken just essentially strengthens that relationship that they've already had. But what they're really trying to do is build out that market infrastructure so that capital can move quickly, efficiently, sort of have an always on type market infrastructure for these sort of products. Let's talk more about the stablecoin push, right? And we think about tokenization. Where do we stand there? When does that become really mainstream? That is a fantastic question. Obviously, you mentioned the act that we had passed. I sort of set the stage for what we're seeing with the stablecoins. It's definitely going to be a really big important thing. I think as you see these new rules where, you know, they need to be backed by government

4:10treasuries or things like that, that brings in a whole new ballgame, a whole new asset class into the activity that we're seeing within crypto. So it's going to be interesting. There's going to be a lot more tokenization of different products. We're just going to have to see where it goes. We think about the technical analysis last but not least. I mean, we had Eric Crown who actually was a former NYC market maker who thought Bitcoin was headed to 90,000 in October if September is a positive month. I don't know if there's any historical data. One versus, you know, September is up. This is at a higher in October. You know, what do you have any vision where the path of these resistances for Bitcoin at this time? Yeah. So definitely September tends to be a tough month and sort of always has for the stock market as well as Bitcoin. Bitcoin hit its golden cross. So it's 50 day moving average crossed above its 200 day.

5:13That's a big signal and the average one month return when that happens has been 9%. The average forward three month return has been almost 30%. It's only happened eight times in Bitcoin's history, but those are the results. So yeah, I could definitely see it going a bit higher from here. For sure. All right, Adam Lynch. It's great to see you. Thank you. I know you may not be able to sleep on the 14th waiting for the 15th. Maybe I won't. Thank you, Adam.