Bitcoin on pace for strongest September ever as investors weigh economic outlook: CNBC Crypto World

Today, Bitcoin sinks on the final day of September but still marks a positive month. Former President Donald Trump says eligible people can now sign up for World Liberty Financial. And Bill Barhydt breaks down why Ethereum could face growing competition in the months ahead. Welcome to CNBC's Crypto World. I'm Jordan Smith. Markets in the red this morning. As of noon Eastern Bitcoin drops more than 3 percent and was trading at sixty three thousand five hundred dollars. Ether fell more than two and a half percent and was trading at the twenty five hundred dollar mark. And XRP fell 6 percent trading at sixty two cents. We're closing out the month and the quarter today and Bitcoin's on pace to gain around 8 percent in the past 30 days while Ether rose about 4 percent in that same time. Both were trending lower to start September but staged a comeback after those rate cuts here in the U.S. and signs of economic stimulus around the globe particularly in China. And for Q3 Bitcoin's up about 2 percent while Ether is actually down about 24 percent. Despite that steep decline Ether has still gained 14 percent this year while Bitcoin's up nearly 50 percent. All right let's talk about the top stories. Crypto financial services company Swan Bitcoin is suing former employees alleging they stole the company's Bitcoin mining plans. The filing claims the ex employees resigned near simultaneously and joined a company under the name Proton an entity it says was created to use Swan's mining tech and secrets. The lawsuit also alleges that Tether which is not a defendant in this case helped the defendants with legal cover. A Tether spokesperson told CNBC that it's aware of the allegations in the lawsuit but denies any implications of wrongdoing. A day after the court filing Swan Bitcoin CEO Corey Clipston posted on X boasting the company's revenue and recent launches and said that mining is segregated and that recent news does not affect Swan's core business. Next Binance founder Shengping Zhao has shared his first public post as a free man. CZ entered a four month prison sentence in California over allowing money laundering under his leadership at Binance and was released on Friday. And on Sunday he shared an update on X thanking supporters and said he would take some time to figure out next steps. He did provide an update on a few areas of focus including his educational platform investing in block chain A.I. and biotech charity and a book he's writing. Now CZ stepped down from his CEO role at Binance as part of his plea deal in November of last year and that company has since been under the leadership of Richard Tang. Last Donald Trump says the crypto project backed by his family World Liberty Financial is now open to eligible people. In a post on X the former president announced the white list was open and said that it was quote your chance to be part of this historic moment. Now when you go to World Liberty's Web site it asks you to connect a wallet. And World Liberty has claimed that this defy platform would work to ensure U.S. dollar dominance and drive mass adoption of dollar pick stable coins. But beyond that details on this project are still scarce. Now CBC reached out to World Liberty and the Trump campaign but haven't heard back yet. You can check for the latest news on this over at CNBC dot com. All right let's go back to markets for our main story as we close out September in the third quarter. I spoke with Bill Burkhardt of ABRA to get his take on crypto's recent rise and his expectations long term. I want to start off with we're ending September. Bitcoin is looking like it's going to be up about 8 percent for the month. Just talk about your reaction to what we've seen especially this turnaround toward the end of September once the Fed decided to cut rates by 50 basis points. We saw this sort of turnaround for the cryptocurrency market reacts to September. Sure. I think there's a couple of things going on. First you know there was broad consensus that the Fed was going to cut rates. But more importantly that the liquidity cycle has now started. And by liquidity cycle I mean that there is kind of a global coordinated efforts to push stimulus into the monetary systems across the world. China Japan the United States Western Europe etc. etc. Obviously whatever the U.S. does has a has a much bigger effect on global markets than other countries because because of the global dominance of the dollar. But many were expecting 25 basis points. Clearly markets globally have now begun to price in 50 basis points. And the feedback from the Fed that we're going to be getting more stimulus. China announced over the weekend I believe that the biggest stimulus probably in 15 years I think since 2007 or 2008. Traditionally certain risk on assets Bitcoin have kind of trailed stimulus and liquidity by maybe six to 10 weeks. And so many had priced in 25 basis points and maybe slower stimulus. So so maybe there was a little bit of that. But in broad measure you know Bitcoin because it's kind of a fixed float asset deflationary over time tends to be more of a levered bet on on stimulus right and on on liquidity. So we would expect over the next several months Bitcoin to appreciate significantly versus kind of traditional risk on assets. And I would expect you know you know it's probably you know four to four to six weeks before before the fund really begins. I want to do that look ahead in just a second. But if I can stick with with just the past quarter actually I was doing some math before we had this conversation and it looks like Bitcoin is going to be up about 2 percent for the past three months while while ether is down 24 percent. What do you think is behind that spread there that we're seeing especially because in recent months it feels like ether and Bitcoin have been a little more in tandem and now we're seeing this split. Yeah I think what's happening is is that there's a competition between L2s and Ethereum and base from Coinbase and that's having a negative impact on expectations for revenue generation via the Ethereum network over time as more and more transactions can move to L2. I think the bigger the bigger narrative for me is what's happening with second generation L1s. By that I mean you know Solana Sui Aptos. You know I'm super bullish on these next generation. What I call L1s Solana Fire Dancer is now live. You know the number of apps being developed on Solana that I saw at the recent conference is astounding. So I think we're basically seeing a narrative shift in the broadest sense possible here. I think that people are looking at the future of A.I. and the integration of crypto and A.I. and saying I don't think this is going to work on these layer twos. And I think that these these these kind of highly scalable L1s have a better shot in my humble opinion so far. At least that's the kind of techie narrative of winning that market. And we'll see how it plays out. But I think that's hurting kind of expectations for Ethereum in the short term and probably represents significant potential price appreciation for the other L1s as well. Now I do think that Ethereum is going to go up along with other crypto assets in the next kind of cycle. But its narrative has shifted significantly. That's a good point. I mean you're talking about these alternatives to Ethereum that have captured the attention of the market in some capacity. And I think to Wall Street I mean we've had these Bitcoin ETFs. We've had these Ethereum ETFs. Bitcoin did seem to garner some attention. Ethereum ETFs not so much. But people are already talking about Solana ETFs. And if you're talking about the attention that these L1s are getting from developers does that translate into a potential ETF if it does get approved. I don't know. Honestly I don't really care. I mean look what matters to me is is where is decentralization headed and why. Why does decentralization matter. I love the fact that we have free marketing from institutions who you know want to capture some of the value being created by the decentralization movement whether it's Bitcoin as digital gold or Ethereum which I think to the last point is actually going to move more towards the institutional platform for you know decentralized products. And the others are going to be basically be kind of the scalable global platforms for decentralization. And yeah institutions are fine and along with everyone else to capture some of the value created there. But I care way more about what this decentralization movement means long term. What it means for AI. What it means for banking. What it means for freedom which is you know mostly money these days. Right. Etcetera etcetera. And in that in that regards I'm super bullish and I think we're we're on a very healthy track. So so talking about that next you know evolution of DeFi of crypto over the next three months we'll say the next quarter. What should people be looking out for. What are the things that you're paying attention to in this market. So there are three narratives that matter to me right now personally. Right. So and that I track a lot at average. The first is you know Bitcoin as kind of a hedge percent as sound money not necessarily a hedge against inflation but just a hedge against government's policy run amok. Right. And I think we're we're seeing that play out. Larry Fink has woken up institutions to that. But people all over the world in emerging markets in war zones in Ukraine they figured this out on their own. They don't need Larry Fink to tell them that. Number two you know I think that there's this kind of convergence coming between crypto smart contracts and AI. Right. When you think about autonomous agents autonomous agents can't be autonomous if they require stored values a centralized stored value bank account system to process transactions that can be shut off. Right. Just like truckers in Canada can have their bank account shut off. Right. So so crypto and smart contracts is the only way that's going to work. And I believe that it requires a highly scalable always on highly available layer one technology to make that happen. And these next generation layer ones are showing great promise. And the last the last narrative that's interesting to me is gaming and memes. Right. So so the great thing about gaming and memes is they've acted as a fantastic testbed over the last couple of years to show us that these next generation ones can scale massively. Basically millions of people have participated in a global test to show us that using meme tokens and games that we can actually build scalable decentralized systems now which we couldn't before. Right. You couldn't build scalable applications on Ethereum five years ago because the transactions would have cost you 15 20 dollars whereas now they're basically free. Right. And so these three things are basically showing us that we can move and migrate toward a truly decentralized Internet which is what the Internet was supposed to be all about in the first place. Final question real quick. I have to ask about price. You know we've had a lot of people tell them talk to us about markets and say that they expect Bitcoin to still hit new all time highs by the end of the year. Do you are you in that camp. Do you believe that. And does it matter if it does or not. Well first of all I don't give investment advice in general but my opinion one it doesn't really matter because if you look at the liquidity cycle over the next 18 months or two years we have to refinance the debt at lower rates. If we don't we're screwed. And so what that means is massive amounts of liquidity has to come into the system to do that. And you know as a result I think I think Bitcoin is going to you know skyrocket over the next couple of years. I think the advanced layer ones are also going to skyrocket and I think Ethereum is going to also appreciate significantly as well. Is it going to happen in December versus March versus next summer. I obviously have no idea but I do believe it's going to happen. All right. That's all for crypto world today. We'll be back again tomorrow. We'll see you then.