Bitcoin falls as investors plan for regulation in 2023

Yahoo Finance Live anchors Brian Sozzi & Brad Smith discuss the outlook in the cryptocurrency landscape for 2023.

Video Transcript

[AUDIO LOGO]

BRIAN SOZZI What a year! The year ended with Bitcoin and Ethereum falling over 65%, with little help from FTX’s Sam Bankman Fried. Crypto-based companies like Robinhood and Coinbase are also down big. Even crypto bulls were not happy.

MicroStrategy of Michael Saylor has continued to invest in Bitcoin, despite the turmoil. Company shares are down 70% for the year. They also lost money with all of this FTX stuff. Brad, this year was our first, and I’m currently on Yahoo Finance’s crypto page. Bitcoin was launched in the year 47,000. Let’s just say it was slightly more. It’s now just over $16,000.

Since June’s middle, Bitcoin hasn’t moved much at all. Now you need to wonder what causes that price action to move up again. To me, it’s extremely unclear.

BRAD SMITH It is. It would be nice to have more certainty. From where does this certainty come? It could come from a variety of sources. Any type of regulation that moves forwards from here would be the most notable. It is also questionable if the regulatory framework has been developed beyond the Gillibrand Lummis Bill.

You will be able to use it if you have Sam Bankman-Fried’s fingerprints within the document and he baked in some of his thoughts and expectations. It is always a good thing to have someone you can rely on, who can be a reliable source of information, for example, Sam Bankman-Fried, who was involved in some of these notable bailouts for crypto companies such as BlockFi and other trading platforms.

You can also buy shares to get a share of their stock and equity price. It will be obvious that not one individual should be responsible for how cryptocurrency does. It is the result of a group of efforts that will prevail at the end.

That’s what I believe end-users, owners, and custodians want. This is what they want. They need some kind of assurance in their custody.

Regulation and utilization are two things. But we also need more crypto-savvy actors. That’s where I believe there’s some movement forward. But I don’t believe that happens until we see swift regulatory, not rapid at this point but after we have seen some concerted regulatory actions.

BRIAN SOZZI This was supposed to be year when all institutions would get into crypto. Everyone has been trading crypto, BlackRock perhaps.

BRAD SMITH Super Bowl ads.

BRIAN SOZZI Or Super Bowl ads. Barron’s published a great article about Fidelity’s efforts in the middle of the year. They hired several people to head their crypto efforts. Where are they now, I wonder? It isn’t something that you hear people talking about. Barron’s article, at least, doesn’t downplay what Fidelity might or may not do in the future in crypto.

However, the institutional space is not being pushed in this area as much as you would like.

BRAD SMITH This is it. There’s been a significant crack edge to the ice in this crypto winter. There were a few things that have fallen deeply into the freezing ocean. There are a few things, algorithmic stabilitycoins, that I believe, have seen their trust completely eroded. Number two-

BRIAN SOZZI What about Bradcoin!

BRAD SMITH Do not purchase Bradcoin. Don’t buy Bitcoin. Don’t buy Bitcoin.

BRIAN SOZZI Bradcoin does not exist. Please do not go to our site to search for Bradcoin.

BRAD SMITH For Willow Smith’s slap–Yeah, there was a Slapcoin. But that’s not the point. It’s the NFTs, however, in this other ice crack. It’s non-fungible tokens. Technology can be improved, but we need to decide how to assign value to the tokenized items.

So, I don’t see myself buying a squiggly lin for $75 million in future.

BRIAN SOZZI Perhaps $20 million.

BRAD SMITH Yes, it will come down.