Bitcoin hits fresh record above $107,000: CNBC Crypto World

Today, Bitcoin hits new all-time highs in the $107,000 range, MicroStrategy is set to join the Nasdaq 100 Index, and Todd Ruoff of Autonomous discusses his expectations for Bitcoin ETFs next year after their explosive 2024. Welcome to CNBC's Crypto World, I'm McKenzie Segalos. Crypto markets are mostly in the green this morning as we kick off the week. By noon Eastern, Bitcoin notched another record high, this time above $107,000. It's up more than 3.5% since yesterday. Ether also climbed 1.3%, nearing $4,000. Meanwhile, Solana lost 1.5%, was trading at $218. Okay, let's talk about the top stories. MicroStrategy is joining the Nasdaq 100 Index. Now, this index includes the 100 largest non-financial firms trading on the tech-focused Nasdaq. MicroStrategy's addition means that the stock would be automatically bought by heavily traded ETFs, like Invesco's TripleQ, which tracks the index. MicroStrategy's Michael Saylor joined CNBC's Money Movers this morning, reacting to the news. Well, it's enormously legitimizing for Bitcoin as the asset class, for the entire crypto industry, and of course for MicroStrategy, since we're the largest holder of digital assets in the world right now. 100 is a magic number. We've now got more than $100 billion of open interest in our options market. We've got more than $100 billion market cap. We've got more than 100% volatility. We've been running 100% AOR for the past four years. And we're holding $46 billion worth of Bitcoin right now that's up 150% year to date. So I just think it's a tremendous milestone for us. The firm was originally known for selling software, but since 2020 has built a reputation on Wall Street as a Bitcoin proxy by adding the currency to its balance sheet, often through leverage by issuing convertible notes. Now, the addition to the Nasdaq 100 index will go into effect December 23rd. And this morning, the company announced yet another $1.5 billion Bitcoin acquisition, bringing its total holdings to around 439,000 Bitcoin. As of noon, shares of the company were up 5%. A year to date, it soared nearly 580%. Far outpacing Bitcoin's return of around 150% during that same period. Next, Coinbase is being sued for more than $1 billion for delisting a token. BitGlobal Digital, the issuer of WBTC, filed a lawsuit Friday, alleging that Coinbase delisted its product to promote its own version of wrapped Bitcoin, CBBTC. Now, the filing points out that the decision to delist WBTC in November came just two months after its version of the product was announced. The filing also says that the meme token Pepe passed Coinbase's standards six days before WBTC failed them. Coinbase's chief legal officer, Paul Graywall, took to X the day of the filing, saying that when an asset no longer meets our listing standards, we will drop it. When another asset can meet or exceed market requirements without sacrificing those standards, we list it. Finally, Ripple just announced that its stablecoin, RLUSD, will launch on Tuesday. The company said in a release this morning that the dollar-denominated stablecoin will be available on some global exchanges starting December 17th. Those include Bitso, Uphold, Moonpay, and CoinMena, before hitting additional platforms in the coming weeks. Notably, the listed exchanges don't include Coinbase or Robinhood at this time. The launch comes after the New York Department of Financial Services gave Ripple regulatory approval roughly a week ago. All right, let's turn back to markets and crypto trading activity for our main story. One of the biggest drivers of volume among institutions this year has been those Bitcoin ETFs that launched in January. I spoke with Todd Ruoff, CEO of Autonomous, to discuss the success of Bitcoin ETFs this year and their outlook in 2025. All right, so Todd, I think we can all see that it's been a big year for these Bitcoin ETFs coming to market in January, closing out the year with a collective market cap more than $100 billion. Tell me about your reaction to this year's adoption of these spot funds and whether it surpassed expectations for you. Absolutely. I would say it's been nothing short of remarkable. The adoption trends that we've been seeing on the institutional level, increased presence through registered investment advisor portfolios. Of course, all this was amplified by the supply side being reduced with the having of Bitcoin. And I think this by far exceeded expectations. The analogies are being made to gold, which it has by far surpassed. And the expectation is that the acceleration is going to continue into 2025. Now, just recently, the collective Bitcoin holdings for ETF issuers in the States surpassed Satoshi Nakamoto's supposed holdings. What significance does that pose, especially for the idea that institutions are taking over Bitcoin? Yeah, very significant for sure. The inflows have just been remarkable. It's been almost a year now since the Bitcoin ETFs launched in January of 2024. And Satoshi's wallets have always been viewed as kind of the Fort Knox of the Bitcoin industry. And to see some of the larger players now, like MicroStrategy, would be another example. And now the ETFs collectively to begin to surpass those levels has been nothing short of astounding for everyone. Is there still work to be done in getting Wall Street's buy-in on crypto? Absolutely. So far, the industry has really benefited from some big name recognition. You have people like BlackRock and Fidelity that bring trust and credibility to the industry. And that has really done a lot to help. However, even with the sea change that we're seeing coming up in the SEC and the anticipation of increased regulatory softening, I don't think that this means that the regulators are ready to just kind of lay down and let anything happen in the wild west of crypto. There still has to be a lot of work done in terms of how we're going to get this introduced. My understanding is that a lot of people are baking in the fact that this niche accounting bulletin from the SEC, SAB 121, will go away under a new SEC chair. That would make it easier for banks to custody cryptocurrencies themselves. Do you see that being one big gatekeeper here that could be a game changer with respect to institutions getting their own balance sheet, getting crypto on their own balance sheet and getting skin in the game? That would be huge. A staff accounting bulletin 121, as you mentioned, was something that was introduced by the SEC, which basically made it next to impossible for banks to custody crypto on their balance sheets. That was voted by Congress to have that repealed to lighten the load. And of course, as we all know, Biden went ahead and vetoed that. So that has really prevented there from being any real broader adoption of things like, you know, a softening of a stance as to putting it in 401k plans, for example. And that is largely due to, you know, the custody constraints that have been placed on it as a result of SAB 121. When you think about the build out of a market infrastructure around cryptocurrency, of course, we saw these spot Bitcoin ETFs. In the last month or so, we've seen new options listing on the NYSE and the NASDAQ. So the sophistication of what you can actually do with respect to betting on the future price of Bitcoin. What do you see as next steps in terms of creating this more robust infrastructure around digital tokens? Well, it's going to take a lot for ETFs in general, as we start to look at some things like the altcoin ETFs that have been proposed for things like Solana and Ripple. The thing with these altcoins, regardless of their popularity, is that one thing that they lack, which has been thus far a requirement for getting a new ETF, is a regulated futures market on the CME. This is necessary so there can be price discovery to ensure there's not going to be price manipulation. And also just the broader ability of the SEC to kind of monitor the space. Those types of tools exist for something like Bitcoin and Ethereum, which are more mature assets. But these less mature assets don't really have that yet. So there's a lot of work on the infrastructure side to be done before they can be built out. I also wonder if the emphasis is less on going down the list of altcoins and creating spot funds around them, and more on creating more products that allow you to do more with the spot ETFs that are already out there. I mean, what are your views on that? Is there more to be done just in the derivatives market rather than having a Solana and XRP ETF? Yeah, there surely is. You can already do perpetual futures on crypto exchanges on a lot of those instruments. So there is the ability to do some derivatives trading out there. Another thing I think we're going to see in addition to, as you had mentioned, some derivatives like options and so forth, but thematic funds, which are going to be focused on blockchain innovation in general, and perhaps holding a basket of these currencies. And that would help reduce some of the concentration risk that the regulators are going to have. Because as we know, a lot of these altcoins have very significant holders in pockets. Much like Satoshi is the largest holder of Bitcoin prior to the ETF explosion, the same concerns are going to exist around the other altcoins. So that's something that's going to have to be dealt with as well. But absolutely, as we start to see more and more products, things like thematic funds, which can help broaden exposure to a basket of assets, I think are going to become much more popular. So what will adoption look like in 2025? Will Bitcoin ETFs, for example, face measurable pressure from other crypto ETFs? You know, Ethereum ETFs didn't really get the traction that some thought that they would, but will that change next year? It's a strong possibility. Again, as I had mentioned before, the reputations that some of these large players like BlackRock with the iShares product and Grayscale, who is the first mover, and Fidelity, you know, they bring great reputations into this space that give people a perception of legitimacy or competent management for investors. That's going to continue to attract the majority of investment, in my opinion. Smaller players are going to have difficulty competing by not being able to provide fees that are as low. They can't compete with the inflows. They may not have the ability to institutional grade custody. And of course, that familiarity isn't going to be there. So as the market continues to become saturated and overcrowded, this could certainly lead to a consolidation. Some of these smaller underperforming ETFs are going to likely struggle to gain market share and probably have no other alternative than to go ahead and merge with another institution. What will adoption look like in 2025? Will Bitcoin ETFs, for example, face measurable pressure from other crypto ETFs? Ethereum ETFs didn't really get the traction that some thought they would, but will that change next year? You know, time will tell. I don't think Bitcoin has anything to worry about in 2025. Also, the remainder of these ETFs that we're talking about, these altcoins, currently the thought is that this is not going to happen until the end of 2025. In terms of what the following years are going to look like, if gold would be any basis of comparison, gold, I think, was two and a half billion when it first traded in 2004 on the ETF. The following year, that over doubled to five and a half billion, and then it increased again to seven and a half billion and almost nine billion in the following years after, and it continued to increase. So I think that the rollercoaster is going to keep trending up. Now, you said that Bitcoin has nothing to worry about next year, but what's the biggest roadblock for crypto as an industry in 2025? I would still have to say it's going to be regulation, I think, because we have a crypto-friendly administration coming in. We have a new SEC chair. We have David Sachs, who's a well-known crypto entrepreneur, coming in to take over as the crypto and AIs are, that there's largely this feeling that the floodgates are going to open and it's going to be a free-for-all. I don't think that that's going to be the case. They still have to protect investors. There probably will be some way to register these products at some point, but I think, as we've seen and the industry has really been pushing for, we need clear regulation and clear guidelines that will enable us to do this. I think that will be the biggest hurdle in 2025, but I think that we're well on the way to overcoming it with all the changes that we have coming up. Okay, that's all for Crypto World today, but we'll be back again tomorrow, and we'll see you then.