Bitcoin drops to $91,000 level as crypto markets slump: CNBC Crypto World

Today, Bitcoin slides back down toward $90,000 and Transform Venture CEO Michael Turpin discusses the sustainability of this post-election rally. Welcome to CNBC's Crypto World. I'm Mackenzie Segalos. Crypto markets are in the red this morning. As of noon Eastern, Bitcoin slid further from that $100,000 milestone. It dropped 2% and was trading at around $94,100. Ether slid 4.25% and Solana dropped 4.5%. Crypto-focused stocks also underperforming compared to broader markets this morning, with Coinbase and Robinhood dropping 2% and MicroStrategy down 4%. Mara Holdings was the outlier in the bunch, gaining nearly 3% all as of noon. Okay, let's talk about the top stories. President-elect Trump may soon start collecting additional revenue from World Liberty Financial. That's because crypto entrepreneur Justin Sun invested $30 million into the Trump family-backed DeFi platform. Trump holds a right to 75% of the platform's revenues above $30 million, a threshold that's now been crossed with Sun's investment. This is on top of the billions in WLFI tokens he received. The Trump family assumes no liability for the project and takes on a promotional role. Sun, who founded Tron, was sued by the SEC in The agency alleged that he committed fraud by manipulating trading activity of his Tronix and BitTorrent tokens on top of unregistered securities charges. We reached out to Trump's transition team, WLFI and Tron for comment, but didn't immediately hear back. Sun also made headlines last week for winning the auction for a more than $6 million artwork of a taped banana. Next, video streaming platform Rumble may be taking notes from MicroStrategy, the conservative-oriented streaming service said yesterday evening that it would allocate up to $20 million of its cash reserves toward Bitcoin. Its CEO, Chris Pavlosky, said that the company believes global Bitcoin adoption is still early and touted the currency, calling it a valuable inflation hedge. The company's stock had a strong opening, but was trading flat by noon Eastern. For our main story, CryptoWorld's Tanaya McKeel spoke with Michael Turpin, Transform Ventures CEO and author of Bitcoin Supercycle, about how he uses benchmarks like the halving and record highs to break down crypto cycles into four seasons. All right, Michael, thank you so much for joining us. So in your book, The Bitcoin Supercycle, you describe the four seasons of Bitcoin. Talk about where we are now in the cycle and whether the rally that we've seen from Trump's electoral victory and the growing influence of politics and Wall Street upends the traditional seasons that you talk about. Sure. Good morning. The four seasons of Bitcoin is something I've been studying and talking about since about 2015. I first got into Bitcoin in early 2013. And there are four year cycles that it surprised me. And the reason I wrote the book was to educate traditional investors, stock market investors, startup tech investors, real estate investors who don't understand Bitcoin having cycles, just like the stock market has 10 year cycles and real estate has cycles. And the cycles in Bitcoin are four years. They happen every four years, roughly with the halving, where the amount of new Bitcoin is cut in half. This is from the white paper. And I call that the starting day of Bitcoin spring. That's the day the seed of the new cycle is planted. We are now in the fifth cycle out of 33 cycles that will exist over 140 years. Bitcoin summer happens when the all time high of the prior cycle is reached. This has happened every time. And I projected in my book that it was going to happen in November. It typically is four to seven months after the halving. During the halving, you have two things that happen at the same time. You have people knowing it's going to probably go higher because more demand and less coins, but you also have the miners losing money until the price gets higher. And when you pass the last cycle high, which was $73,850 a month before the halving, still counted as last cycle, you then go parabolic. That happened at $30 in 2013. It happened at $1,200 in 2017. It happened at $20,000 in 2020. And sure enough, it happened in November. And I also projected that if Camelot won, we would still get to $100,000, but it would take a little bit longer. And we had passed the all time high in November, but closer to the end of it. And that if Trump won and he continued to be crypto friendly, that we would hit it at the start of the month. And sure enough, we hit it on election day. Yeah. How sustainable is the rally that we're seeing now in your view? And are the catalysts different this cycle from the ones that you've observed in previous cycles? Sure. So Bitcoin summer lasts between 9 and 11 months historically. It doesn't mean it won't last 8 months or 12 months, but I don't think it's going to last 3 months. So we started Bitcoin summer in November. Historically, every all time high, the end of Bitcoin summer when the bubble pops, people don't usually realize until afterwards when it's too late, has been in either November or December of the year after the halving. Remarkably, and I was even surprised myself when I went into the data, there's only been a 37 day period when the all time highs happened. The first cycle after halving was December 4th, the year after the halving. The next cycle was December 17th, the year after the halving. This last one was November 10th, the year after the halving. So I'm expecting history to repeat and us to, we'll probably have a double bubble, which means we're going to go way up through about April, May. We'll have a summer slump and then we'll hit our all time highs around 200,000, possibly higher if the macro is good. And Trump does many of the things he's been talking about, like this strategic reserve, et cetera, and other countries follow. We could be over 300. What about an altcoin season? I mean, Bitcoin, Bitcoin the darling right now, always the darling, but you did see some outsized moves in the altcoins the other week, and those have backed off a little bit, Bitcoin kind of leading the way again. But do you expect to see more interest move into other kinds of crypto assets and projects outside of Bitcoin? That's an interesting question. And of the 21 chapters in my book, I only spend four on altcoins because I think for people who are new as well as for Bitcoin maximalists, that's really what they should be focusing on. It's also something where you can, you know, hodlers as they call them, people who just set it and forget it, and they have it there for their grandchildren. They've done really well. If they bought a thousand Bitcoin at the end of 2012 for the first halving, they spent $12,000. And today it's worth $97 million. On the other hand, if they sold it once per cycle, you know, during the period I say is going to be roughly the highs within 20, 30% of it, and then bought it back a year later, they'd have about $5 billion right now. So I suggest if somebody doesn't want to go and make a full-time job of this, that they stick with Bitcoin. But if they want to, I also give some strategies on altcoins. I will say this about, right now we're in about 61% of Bitcoin dominance, meaning 60% of the entire market cap is Bitcoin. When you hit the all-time highs, it's usually gone under 50%. And in the 2017 cycle, it went down as low as like 38%. I think that because institutions coming in, governments coming in, none of them are looking to buy Dogecoin, maybe Elon. But none of them are certainly going and buying meme coins. And so because of the growth of Bitcoin only institutions, I believe that the altcoin season will happen. And that's the way you get really, really stunning, but you can also lose everything. And that's not going to happen. What's your view on ETFs or other investment products around Bitcoin being that, like you said, institutions just are not interested in anything else on the risk curve as of now, maybe Ethereum, but predominantly Bitcoin. And I think as they get more comfortable with Bitcoin and the asset class, looking for more active strategies around Bitcoin beyond just buying spot and holding it. Sure. So, you know, a big part of this move up to almost 100,000 was a reaction to the friendly, Bitcoin-friendly appointment of several cabinet members. We're still waiting on Treasury. We're still waiting on SEC. I believe if a Bitcoin-friendly SEC commissioner, which all the names that have been bandied about are certainly in that camp, that alone will push us over 100K. And, you know, if that happens, then you should have a lot of, it should be open to what Wall Street wants in terms of Bitcoin ETFs. You can have, I mean, they're talking about a TAO ETF, right? For BitTensor, certainly Solana ETFs. And that will be a way of having the retail investors go and put something in their portfolio and not have to worry about day trading. I mean, most of these asset classes have not performed well over the cycles. Only Bitcoin, and believe it or not, Binance, BNB, have actually reached all-time highs three cycles in a row. Most newer coins, Ethereum may still do it. They haven't done it yet. Most new coins underperform Bitcoin in subsequent cycles. What about the businesses outside of the assets? So looking long term, you know, and you mentioned this, we're likely to see the U.S. embrace crypto in a whole new way under Trump. You have lots of experience in the industry across several businesses. Is there a particular type of project or business that you think will be especially successful in this new cycle? Well, the great thing is going to be people coming back to the United States and not having to go and set up in, you know, Cayman, Dubai, etc. That'll be phenomenal, right? Because most of the leading projects did start in the U.S. and then were, you know, driven offshore or really had to be apologetic about being in the U.S. and got well-known, etc. I mean, you know, Uniswap is a U.S. project. Chainlink is a U.S. project. And, you know, I think that this next wave, the businesses that will be very successful are going to be the next wave of decentralized exchanges. Certainly going to see more centralized exchanges as well. You know, Kraken certainly has an opportunity to go public, perhaps Gemini. And, you know, they're seeing how well Coinbase has done, how well MicroStrategy has done. Now the leading, you know, most traded stock on the market. So that will embolden Wall Street to start looking at, you know, opening up the IPO window, not ICO, for businesses. And that means that Silicon Valley VCs will be more open to funding innovation. Decentralized AI is a big one. You know, Morpheus, BitTensor, a number of other ones. Wire network. There's a lot of companies that have been getting funded. They're still at the early stages. And that's a monumental opportunity. Okay. That's all for Crypto World today, but we'll be back again tomorrow and we'll see you then.