Apr 23, 2024

Delta Blockchain Fund founder and general partner Kavita Gupta shares her market analysis with a focus on bitcoin's performance following the spot BTC ETF success.

Video transcript

Do I see it is crossing 7274 mark, which recently happened. Uh Anytime soon, I'm actually not sure. I think it will go to 70 but I still believe um that in summer we're gonna see a liberal Pullen and around uh may not be 20% for Bitcoin, maybe 5 to 10% for Bitcoin like early sixties if we are very lucky for the buy side because I'm gonna buy if it goes down to late fifties. Uh but that's it, but maybe a bigger pull in for the E and the other all coins. But that's what I'm thinking that the real all time high for this cycle is probably Q three Q four. It's Tuesday, April 23rd, 2024. And this is market staley. A show where we get into the minds of the smartest and most experienced investors, traders, analysts CEO SV CS, people who have a smart or hot take on what's going on in the crypto markets. I'm J and as before we get into our discussion today, let's take a look at what's going on in those markets. Bitcoin remains largely unchanged this morning, around 66. $1000. The largest Cryptocurrency by market caps 200 day, moving average is approaching a record high signaling. It's approaching a record high signaling, some strong bullish momentum. It appears on its way to surpass its previous peak, which is noteworthy because past data shows us that the most intense phase of the bullish cycle unfolds after the average surpasses its previous peak to new lifetime highs. If we now look at the coin Desk 20 today, only two out of the 20 assets are trade higher. Now, while the Bitcoin trend indicator has turned into an uptrend, the ether trend indicator is in a downtrend and has been for the last week or so. With all of these mixed signals, we are trying to make sense of this this morning, we're going to bring in now Delta Blockchain Fund founder and GP Ka Gupta. Welcome back to Coin Desk. Hi Jen. So good to see you. All right. What do you make of all of this? I just, I just mentioned that the 200 day moving average for Bitcoin is looking like it might break a new record, it might set a new lifetime high. What does this mean for Bitcoin? What do you think, you know Bitcoin is gonna, Bitcoin is gonna have a very unique cycle like right, because every time in the past four times that the Bitcoin H has happened, we did not have Bitcoin ETF the legacy or the acceptance from the multi trillion dollar economy. So this time as soon as we see Bitcoin going li down in like early 60 61 62 which has happened to blitz because of the geopolitical situations, we saw so much of buy orders instead of sell orders that the Bitcoin has picked up again. Do I see it is crossing 7274 mark which recently happened uh Anytime soon, I'm actually not sure. I think it will go to 70 but I still believe um that in summer we're gonna see a little pull in and around. Uh may not be 20% for Bitcoin, maybe 5 to 10% for Bitcoin like early sixties if we are very lucky for the buy side because I'm gonna buy if it goes down to late fifties. Uh but that's it. But maybe a bigger pull in for the E and the other old coins. But that's what I'm thinking that the real all time high for this cycle is probably Q three Q four leading up to the having and after the having, everyone has been looking at prior, having, trying to figure out what's gonna happen next, but there have only been three. So do you think that's enough data points to actually look at and predict what's gonna happen next for Bitcoin? We can't predict this time because we, as I said, we never have such a supply, such a demand from, first of all, such a demand from ETF S which has been amazing. Secondly, in the first two cycles, the Bitcoin miners were very small. We didn't have out of the art like such high performance and so much of infra operational capital included minors which did change in the last cycle a little bit. But people have been because of ETF demand. The uh uh most of the miners were ready, they had the capital to be ready to accept the lower fees or the the difficulty of happening. So I feel like this cycle is going to be very unique, but also going to be the benchmark going forward after four years when we're going to have the happening. I want to talk about that demand for the ETF because two people have come on this show prior Marcus Teen and Jan Van Neck and they've both said that we're focusing too much on this demand for the ETF. They've said that a lot of Bitcoin interest, a lot of people who are buying Bitcoin are coming from the European trade hours. And so we're maybe mis aligning on what's actually driving the price of Bitcoin. It might not be this insane interest in the ETF that we like to talk about in the media. So, so much, it sounds like you maybe disagree. It sounds like you think there is a lot of demand for the ETF and, and we're going to see that continue. So when I say the demand because of ETF it's not only the US citizens or the institutions which are buying because of ETF it basically overall in the market and the globe sends a legitimacy signals. So if even if you go deeper down one level down onto European demands, it is also the private wealth managers of big family officers sitting in Africa and Asia and Middle East who are placing order from Switzerland and London. And I just recently came back from Kenya and Dubai and the mo the family offices which back in 1718 or even 21 as leaders have invited me to speak to their family forums and YPO networks are actually now owns Bitcoin for the first time. So I do think that this is just the ripple effect of that Bitcoin ETF precedence which has been set by us and accepted by the rest of the world. OK. Outside of Bitcoin, what else do you have your eyes on any interesting s out there? I'm a big eat. Uh I don't want to call the word Maxi. You eat. Maxi. I feel like you are, I feel like the maxi say, I don't want to say I'm a maxi. I don't want to say I'm a bit, I'm a eat long believer. Let me say that maxi is a very crypto Twitter word word word. Now, I don't want to get into that. Um I'm I'm a big believer in it because of technology because of so much happening in it. I think even the mainstream media stopped talking about it. Like the latest account abstraction wallet upgrade which just came out on Ethereum is just going to be game changing with respect to the permissions. And how do we look at accounts um apart from eat, which continues to be my big love in life. Uh I am getting uh I'm getting excited about a new like in L twos. Of course, Polygon is another one. I'm a huge believer in uh optimism is doing good with P stack. But I want to see how arbitra DFI ecosystem is literally killing everyone else's di I ecosystem so big on arbitra in the new ones. Uh aptos uh do want to give a shout out to aptos, especially with their now how they're doing gaming with any moa and getting a lot of meta versus, and a lot of gaming solutions. Uh Super interesting for me, the uh along with Ato say, I think the parallel EVM ecosystem is gonna be, should redefine how D I and the uh uh the fee plus the time combination can work honestly. So I'm excited to see how C is gonna set up the precedent. And if any other new chains, maybe Manna or bunch of Amega, bunch of them, which are upcoming, which are far away from the main net still uh can take it to the next level. Your ka I know that you are an E Maxi of sorts and one of the big narratives has been around staking and rest staking. Do you think that this is something that's gonna continue uh for the rest of the year? And how do you see that unfolding staking has proven its metal, it has been there for last 45 years. Liquid retaking with SSV and Rocket Pool has proven its security and metal. My my doubt and I hope I am 100% wrong in this is the security of frees staking. You have multi billion dollar protocols coming on top of Eigen layer with just recently less than a month got launched hasn't proven its security value. It says data availability layer, but now you have so much billion of dollars each state on it. And when you have only four or five protocols doing so much of each state using the security of something which we still have to be proven. I get a little nervous and on top of that, yes, you have good players but you also have bad players, the type of which we are getting, which is reminds me of luna faces which is like you take one eat as a collateral and you can just keep on looping and buy and sell and buy and collateral to the level that you are sitting on 100 e collateral. But from just one real e collateral on retaking on Eigen Le is what really makes me nervous. So I'm excited about this narrative but I want to really hopefully see it playing safely and no house of cards burning down here. It's interesting the way you describe that and if you're thinking about it like that, I mean, do you think that regulators are watching closely and thinking the same thing? We've seen the ESEC come after exchanges in the United States for staking products. We haven't really seen anything when it comes to retaking and that narrative and these kinds of products being available to American citizens. Do you see a regulatory um hurdle for these types of protocols moving forward? First of all, by the time CC comes, the whole narrative would have played it over next one year and if anything has to go down, would have already gone down. Secondly, I do believe that a lot of those products are not actually allowing us citizens to participate, but the rest of the world is doing ultimately, right? Uh But I think beyond regulatory, I think now as an industry, we should take security much more seriously seeing how synthetic tokens have not really worked, how collateral has to be very strong, you know, and so I'm a little nervous about it. I'm very happy for market and the technology to prove me wrong, but I still feel we're gonna see could this could be a trigger for the downward of the whole crypto market early next year or somewhere? And I'm crossing my finger that it, it doesn't end up being II, I know some products aren't available to American citizens. But I think what we've seen in the past is it takes a handful of American citizens to gain access somehow and the regulators are, are coming for you. OK? I mean, you, you talk to a lot of people in the space is this kind of um you know, a growing maybe consensus amongst people you're talking about. And when from an investor or trader perspective, what should they be aware of when it comes to these types of products? I think as an investor from the VC side, a lot of investors have been talking about it for last couple of months have been talking to each other. Like what do we think? And this is like even before the launch of Eigen, we all are crossing our fingers. We want all the security people to prove us wrong, but we don't see a big security push or like a support ecosystem saying no, this is really good. So we are waiting to watch that now with respect to trading perspective. Of course, it's a good trading game as any other narrative for retaking. It is already too hyper built in. Uh but I think the bull cycle is still far. So I'm sure there is a 30 40% square still there said that uh this if you hold it longer, I am concerned that this could also be the reason for a big downturn. John So proceed with caution. Yes, 100%. He mentioned a bunch of different projects there. If you have to pick three, that investors, traders should be keeping their eye on right now. What three would you say? Oh man, that's a tough one because if it's for traders, then it's also combines not only technology or the projects which are building on which as a VC we look at, but now we also have a Liquid Token fund. So from that perspective, I feel uh you also have to look at unlocks so bullish on arbitra and technology. Not sure how many unlocks are about to happen in the bull market. So where does the price go? But if you're looking just price, I would say I'm very bullish on say and atos and uh and uh yeah, that's what I would say. Not a financial advice guys don't buy just because I said do your homework, but I'm bullish on that. OK. And I want to talk about the E ETF approval in Hong Kong. We've talked about that on this show recently. The approval happened recently and you just said that the approval for the spot, Bitcoin ETF in the United States signaled um this acceptance, a wider acceptance of Bitcoin. Do you think that the approval of the E ETF in Hong Kong is going to signal that same thing for Ether or is it going to take an approval by the SEC in the United States to do the same thing for Ether, I think for the global markets us has always been that big benchmark, right? So definitely it would be but Hong Kong giving e approval because it is so big in Asia and the markets around it just makes it easy for a lot of people to hold it. We everyone expected it to like really go up into the four K mark after the E approval news coming from Hong Kong. It's very interesting that has not really happened because we still see a much more orders on Bitcoin. Um But I do think that's a very positive sign now. Is that equivalent to U Si? Don't think so. All right. And I wanted, I wanted to just tell everyone I was excited for you to come on the show because you have very strong opinions I would say on, on A I tokens and the intersection of A I and Blockchain. And it's just been this narrative that has really taken over the space. And as, as someone who sits in your position, how are you looking at projects that are in the crypto space that are now incorporating A I some of the A I tokens? Like, how closely are you watching them? How important are they to your investment thesis? We spend a lot of time on A I thesis and I want to say these are my personal opinions. I don't want any of my VC friends who we deal with or love uh to feel completely via on A I on Blockchain. My biggest problem with A I on Blockchain is narrative play, right? But how much clean data do we even have to build models? First of all, there is a big scarcity of clean data sets. I mean, I have you forgotten indexing solutions which supposed to be actually really good but are such non sexy terms that nobody wants to play it as a narrative. We as a developer, as uh uh uh as a individual user, I think data is still so much broken on, on chain. And when I say on chain, just to give you one scenario, Jen, like today, if I want to just look at all the NFTS data across five biggest L ones, let's say right? And let L twos are easy compatible, but even let's put three L twos on in the same group just getting a common denominator to compare data between Ethereum, Solana Bitcoin L twos and let's say arbitra or something. It's almost impossible. I have to run notes myself. I have to spend in 50,000, 200,000 or even more running nodes going the data all the way back for every NFT launch on chain or different platforms. Put them together. We tried to do that in house at Delta. And after putting in two months of time, energy and money, we were like, OK, we just need to invest into the next. So coming back to A I I think first we have to build up the data sets. Even if you look at the web, two of the build of A I. It took 15 years to call, talk about machine learning to talk about data, putting data together, having cleaner and cleaner data sets, having sanctity check on it. We are sitting on the first step. We don't even have a proper data, sanctity check. Most of the time when I'm even looking at coin geo data, I have to do one or two more places for new tokens. So, what are you building A I on? Well, I mean, that's, that's an interesting perspective. If we look at web two, the big web two winners in A I are the ones who have been collecting data for a very, very long time. And that is the thesis that this industry is trying to work against. So you bring up a really interesting, um, dichotomy here that we're probably gonna have to work through for A I and crypto to, uh, work together on that note A I tokens. We see them pump every time there's A I news. What do you think that people should know about those? Is it just kind of fun? Is it like watching, uh, a meme token and putting your money into bet on memes? But make sure you get that money out quickly because it's not gonna last forever? Yeah. So, A I for data purposes doesn't work. But Blockchain providing verification for existing A I data, whether it's for Web two, whether it's for web three, that narrative works. So I always say Blockchain on A I is interesting. A I on Blockchain, we are very far away. Now. Coming back to tokens, Phil. If you're doing meme coins, then A I tokens are less risky. I, I mean, beco life cycle is five days, I guess, right? And that happens 90% on telegram bots. You don't like. My first DJ was on a telegram bot. Um uh I uh I forgot the name of the board but it's like really cool. And uh because moving money from my Coinbase or meta mass from uh from eat network to base based to SOLANA or to do network is just too much, too much friction and Alfred. So I literally bought my first agent on this telegram, bought Alfred. So if you're doing that, I think A I token still have some technology. If not in this cycle, maybe over two years, good builders will continue to build and have a lot of value associated with it. So I would say if you're doing main coins A I movement is less risky. Uh It may not give you 1000 X return. It may give you 10 X and 15 X returns. Uh But it is more valuable but is the A I is a technology ready to take us over A I on Blockchain. Not sure. Blockchain on A I absolutely, I think we are ready covered that. Thank you so much for joining Markets daily and we'll see you soon. Yeah. Thank you.

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