The macro setting is 'perfect' for bitcoin: CoinDesk's Baehr

Bitcoin (BTC-USD) prices are falling, with the cryptocurrency dropping below the $57,000 level Wednesday morning. CoinDesk Indices managing director Andy Baehr joins Catalysts to discuss his outlook on the digital asset.

Baehr acknowledges it's been a rough summer for crypto. He notes many cryptocurrencies have a "time series effect," explaining that "once they start going, they tend to keep going." However, for bitcoin, after the spot bitcoin ETF "honeymoon" aura began to fade, "things have been flat," Baehr explains.

Historically, September is a rather challenging month for both equities (^DJI, ^IXIC, ^GSPC) and the crypto market.

"For now, it's just keep on keeping on and just wait for the next catalyst to take us higher," Baehr tells Yahoo Finance.

Looking ahead, Baehr believes the current setting for bitcoin is "perfect." He points out that with potential Federal Reserve rate cuts on the horizon, this could be a great macro driver for the currency. However, he cautions that uncertain factors like the upcoming election could still impact the market.

"For longer-term investors, we think right now is the time to maintain the faith and keep going," he states. Baehr emphasizes that for the broader crypto market to thrive, bitcoin needs to perform well, as it often leads the way for other digital assets to move higher.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Angel Smith

Video transcript

Turning now to Bitcoin the digital currency down over 10% in the month of August worst month since April.

This comes as traders moved to the sidelines over uncertainty about the timing and degree of Fed rate cuts.

Come the November election as well.

Here to help break down where Bitcoin in the broader crypto market could be headed.

We got and be Co Ines, managing director Andy.

It's great to speak with you here.

So we've been talking consistently over the past couple of days here about the degree of pressure that we are seeing in Bitcoin.

What is driving the degree of that pressure right now?

It's been It's been a long summer, right?

A lot of long days, with Bitcoin trying to find a base for a good uptrend.

Uh, Bitcoin and other cryptocurrencies have a lot of time series effect like they have a lot of momentum, so once they start going, they tend to keep going.

But ever since the honeymoon of the ETF inflows started to die down at the end of the first quarter, things have been kind of flat, right?

So lower liquidity, a little bit of weight from Bitcoin supply coming from the Mount Gox resolution and from the US and German governments, uh, threatening to sell sort of Bitcoin that they had seized.

Uh, we just keep trying to rally.

And then things kind of Peter out the latest case with the with the NVIDIA, Uh, kind of, um uh uh pull back yesterday, uh, you know, seeped a little bit in a contagion way into the crypto market.

So once again, we try to break through that 62.

63 64,000 mark.

And then we find ourselves back here.

So for now, it's just, you know, keep on keeping on and just and just wait for the next catalyst, uh, to take us higher.

And so in the meantime here, I mean, if we see some of the same type of inputs really taking place in this month of September, which for crypto has already, uh, historically been bad as well here, you know what?

What type of net effect are you anticipating for?

For Bitcoin.

And what does that mean for the appetite for risk assets where crypto is Certainly and Bitcoin certainly is within that realm, Perhaps one of the poster Children.

Yeah, No, it's it is a risk asset.

We we we really like to think of Bitcoin as having its own unique macro drivers.

It likes low forward looking real interest rates, so nominal rates minus inflation.

So, in a way, Bitcoin's table setting right now is perfect, right?

We have a series of rate cuts coming.

I don't think anybody thinks inflation is gonna crater.

So you have these kind of real rates going lower, which should be, you know, a great environment for Bitcoin.

But we have an election, uh, coming up, which is gonna be polarising and create volatility.

Uh, so for longer term investors, we think, you know, now is a great time to to kind of maintain the faith and keep going where it hurts.

The other, uh, Cryptocurrency assets.

The other digital assets is that they need Bitcoin to lead.

Uh, when we look back to the the heights, the emotional heights and the price heights of March, Uh, 20 tokens in our coin desk 20 index were were in the green for the year.

Now, only six of them out of the 20 are so really think of the other tokens, including ethereum as being attached to Bitcoin, sort of with a rubber band.

So Bitcoin starts to go higher and these higher beta ones are going to kind of slingshot past it.

So we need that to happen.

We need liquidity.

We need more volume.

We need momentum.

Um, I think investors do want breadth.

Right?

We have a bunch of demand for Coin Des 20 products.

Just this morning fins, which is a European retail platform, just announced they're going to announce they're going to offer bundles of Coin des 20.

This adds to funds and S MA platforms and derivatives.

So investors want breadth.

They want indexing, they just need Bitcoin to lead the way higher, and then the other assets are going to follow.