On Tuesday, Bitcoin (BTC-USD) showed significant volatility, with the price dropping noticeably and then quickly recovering. To shed light on what's causing this confusion, Scott Melker, host of the podcast The Wolf Of All Streets, joins us on his Yahoo Finance Live.
Melker advised investors chasing Bitcoin to “keep their eyes peeled and calm down,” suggesting that the recent decline is just a “flash” of leverage built up in the market. He noted that around $1 billion worth of Bitcoin positions were liquidated on Tuesday, which is a normal occurrence in the crypto market.
Melker said the underlying trigger for the increased volatility was the recent approval of a Bitcoin spot exchange-traded fund (ETF). These ETFs have been attracting “huge daily inflows,” which Melker expects will continue, contributing to the market turmoil.
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor's note: This article was written by angel smith
video transcript
[AUDIO LOGO]
Josh Lipton: Insane and unstable, our next guest describes the past 24 hours of Bitcoin trading in just two words. Bitcoin hits a new all-time high, then plummets, then rises again. What happens next has been a difficult journey for investors trying to digest this move.
Joining us now is Scott Melker, a crypto commentator and host of the Wolf of Wall Street podcast and YouTube series. Scott, nice to meet you. Scott, I'm not sure if I should give an opinion on where Bitcoin is heading in the short term. It sounds like a lot, but the surge is incredible. Of course, we saw a decline yesterday. But still, I mean, he's already 50% on the move this year, Scott. I'm just interested at a high-level level, Scott, what do you think about this movement that we've seen? And where do you think we go from here in the short to medium term?
Scott Melker: First of all, I think people who look at Bitcoin every day should look away and calm down. Because we see this kind of volatility in the crypto market, literally called Tuesday. And it happened to be a Tuesday.
But it's not surprising that we saw flashes of leverage as it built up and there was massive open interest. That was all yesterday. $1 billion was liquidated, which is insane. But if you're wondering what's driving this fundamental move, it's clearly the approval of Bitcoin Spot ETFs, and before that, the narrative that those Bitcoin Spot ETFs will be approved. is.
We're seeing a really big influx every day. Despite yesterday's drop from 69,000 to 59,000, over 700 million flowed into iBit from BlackRock's Spot ETF alone. If you buy this much, you can see this kind of trend. It's very transparent. There are fundamental reasons why Bitcoin continues to rise. And I don't think that trend will stop anytime soon.
The reason is that for most RIAs and most institutional platforms, these products are not unlocked. I am aware that Vanguard does not offer these products. Probably not. Merrill Lynch just approved some of them. We have RIAs of his like the Carson Group, a management group with $30 billion in assets, of which he currently approves four.
So this trickle-down approval, people's due diligence is just beginning. So as more of them come online, we'll definitely see more of these spot ETF purchases going forward, which means more spot Bitcoin purchases.
