Bitcoin Is Crashing. Here's What Wall Street Knows.

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Scott Melker (0:31)

Bitcoin crashed to a low around $67,000 last night trading like Jensen Huang announced that Bitcoin was his fourth affair. I don't really understand why Bitcoin is taking it on the chin so badly when the broader market is bouncing, but now obviously comes the real test because we could start going back down to the previous lows and see if this bear market is in fact over. But I've got a great guest today, Bloomberg's Eric Balchunas here to talk about all of that and more. Let's go.

What is up, everybody? Happy Friday and welcome to the show. Yesterday I was in New York City very briefly for Yahoo Invest. I did my show from a really crappy hotel room with Mark Yusko, but it was a good time. Yahoo's studios are amazing, man. I was having major studio envy when I was in there. Their cameras are bigger, their space is bigger, their people are better. No offense, John, you're great.

But there are people everywhere. But it was a really awesome experience. I had a good time and of course, it was like a hurricane in New York City. So my flight left at 12 o'clock. So I'm doing very good today. If you're wondering why I'm a subpar, I walked in my house like 3 AM. Going to bring on Eric right now. I'm sure you're super excited. Were you in New York City yesterday?

Eric Balchunas (2:13)

I'm in New York right now in a hotel room.

Scott Melker (2:16)

Great, really. Highly recommend.

Eric Balchunas (2:18)

Yeah, cold and rainy.

Scott Melker (2:20)

Yeah, I mean, that was about as rainy. I live in Florida and I was like, damn, this rain sucks.

Eric Balchunas (2:24)

Yeah.

Scott Melker (2:26)

Absolutely atrocious. All right, man, let's talk about what's going on here in the market.

Jensen apparently is the most important person on planet Earth. And if he has an extramarital affair, that means Bitcoin has to go down like 15,000. I don't understand. Bitcoin tumbles below 69,000. NVIDIA turmoil adds to Fed-driven market chitters. So he actually has got PPI this morning and it was good versus expectation. So who knows there. But just unpack what you're watching. I mean, you're seeing this obviously in the ETF flows.

Eric Balchunas (2:59)

Yeah.

I mean, honestly, if you look at the ETF flows, there's more money going into equities than normal. These ETF buyers love buying the dip. The Vanguard people, they buy it always. You could not shake them. But then the trick, right? I mean, that's passive.

Scott Melker (3:16)

Yeah. Yeah. Yeah.

Eric Balchunas (3:16)

Because the products are so good, people get married to them. And they're like, I'm just gonna hold this for 30 years. Like there is no headline risk there. They're just gonna buy.

Then there's the traders, but the traders were also buying in. QQQ is a trader crowd ETF. That was top of the flows yesterday. The Double X NVIDIA ETF has been seeing inflows every day. As it goes down, they're just gonna keep buying it until it goes up.

I think, generally speaking, unless you have a string of bad earnings or a complete crisis like COVID, these headline risks where the media loses their hair, freaks out, and just basically makes a huge push to get clicks, because these things are great for clicks if you're in the media.

Those kinds of sell-offs tend to not phase ETF investors or any investors. I think they're algo-driven, headline-driven, and they'll short-live. So I don't know if the AI story has gone anywhere. This is a personal problem. It's probably not ideal, but it feels more like a speed bump, in my opinion. The Democrats maybe not allowing AI data centers might be a more legitimate one that could hurt earnings. We'll see. But I just think unless earnings have a real problem over the next couple quarters, this is just the 18th. There's a Rolling Stone song. This is just your 19th nervous breakdown. This is like the 280th nervous breakdown that the markets had in the past couple of years. I just don't... I'm unfazed. I need to see more.