What's Behind Crypto's Stall as MSTR Resumes Bitcoin Purchases

**Jenny Horne** (0:11)
Welcome back to Crypto Corner here on Schwab Network. I'm Jenny Horne, and joining me today is Adam Lynch, Director of Equity Research at Charles Schwab. And so Bitcoin and Ethereum have paused after a pretty strong run with geopolitical tensions around Iran, of course, weighing on risk appetite. And so Adam, as far as key levels that you're watching right now, walk us through what stands out.

**Adam Lynch** (0:31)
Yeah, sure. Hi, Jenny. Great to see you and great to be back here. Yeah, you mentioned we've gotten off to a little bit of a slow start here in the month of September after one heck of an August. During the last month, Bitcoin was up over 25 percent and Ethereum was up nearly 35 percent. Today, they're both off a bit with Bitcoin trading around 77,000, and Ethereum, I think, is just below 2400 or so.
For Bitcoin, the key level that I'm watching is $80,000.
We hit it back in May. We touched it about a week ago, but the market hasn't been able to sustain any significant closes above that level. In order to move substantially higher from here, I think we're going to need to really break through that resistance. For Ethereum, it's pretty much the price we're at right now as well. $2500, I think, is also a key level here. It's important to note that these aren't necessarily technical trading levels. Both currencies have pretty much blown through those and are trading well above, say, their 100, 200-day moving averages. These levels are a little bit more psychological, as well as where shorts may be established in the market.

**Jenny Horne** (1:43)
Okay, so micro-strategy, did just resume its Bitcoin purchases last week after a near 10-week hiatus. And so what does that move then tell you about conviction in Bitcoin at these current levels?

**Adam Lynch** (1:55)
Yeah, I think, overall, it was a really good thing to see. Their CEO had essentially come out and defend the fact that they had prior, a couple months ago or a few weeks ago, had sold Bitcoin at lower levels than when they were buying it back last week. But he did so by saying that he doesn't foresee any future sales ahead of what he called a pretty heavy bull market. So they must have some optimism going forward.
Last week, they bought about $350 million in Bitcoin, while also selling some common stock to help fund the purchases and buy back some of their preferred shares. They've been doing a little bit of reshaping their balance sheet, and last week made some of these moves to help give management more flexibility to meet the preferred stock dividends and other corporate needs going forward. I think overall, the market liked the news. The stock was up about 2%, but it is down about 60% or so the past year.

**Jenny Horne** (2:52)
Okay, and Hyperliquid Labs is reportedly in advanced talks with Kraken's parent company to bring perpetual futures to the US market. So how significant could that be, and what are investors still waiting to hear on the regulatory front ahead of, of course, that critical date of September 15th?

**Adam Lynch** (3:09)
Yeah, sure. So first off, in terms of Hyperliquid, they've been in the news quite a bit recently after President Trump name dropped them during a meeting at the White House a couple of weeks ago. During that meeting, he said that CFTC Chairman Michael Selig was essentially working to bring Hyperliquid's perp futures here to the US.
That somewhat off the cuff announcement caused their native token Per to pop about 26 percent that day, and their coin is up about 80 percent in the past month. Now this week, what we have is just more details on how this may actually happen. So it sounds like Hyperliquid Labs is going to work through Kraken's parent company Payward and give US traders the ability to trade these perpetual futures using Payward's bit-nomial exchange. These futures are really popular for crypto as well as oil and gold.
It was a big announcement. It caused some of the shares of major exchange operators like CME and ICE to fall. So I think it could be a pretty big thing if we get it going forward. As far as clarity and the 9-15 date, we got to see whether or not we're going to get this thing passed. The Senate is set to meet, I believe it's even at 2-30 on that afternoon, and they are going to vote. It's going to be a cloture vote, which just is essentially a vote before the vote. It does need 60 to pass though to advance it to a floor vote. I think we've got some fingers crossed here. We could hopefully get it over the line. It is important to note though, if it fails, the CFTC and the SEC appear ready to step in, but they can only do things with rules, and those rules can then be overturned with new leadership, those committees. We'd really like to see some legislation get done here.