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00:00CEO DAVID GARRITY. WHO HAS NOT BEEN COVERING THIS ON AND OFF AGAIN? $5,000 IS A BIG FALL. DAVID: IF YOU LOOK AT THE SECOND HALF OF 2017, AFTER CHINA CAME OUT AND ANNOUNCED THEY WERE GOING TO EFFECTIVELY FOR BID -- FORBID ICO ' S, BITCOIN FELL BUT THEN IT CAME BACK UP. THE MOVE FROM $5,000 GOING UP TO $20,000 OF THE END OF THE YEAR. AT THAT POINT, WE HAD THE CREATION OF FUTURES TRADING BY THE CME AND CBOE. ONE WOULD ARGUE THAT SOMETHING IS NOT A REAL MARKET INTEL YOU CAN ACTUALLY SHORT IT. WITH FUTURES, YOU MIGHT NOT BE ABLE TO SHORT OUT RIGHT BUT YOU ARE MOVING MORE IN THAT DIRECTION. FROM A TECHNICAL STANDPOINT, WE CAN SAY THIS MOVE FROM $5,000 TO $20,000 CREATED A HUGE GAP. TYPICALLY WHAT WOULD HAPPEN IS YOU WOULD NEED TO HAVE SOME BACKEND FILLING. WE ' VE HAD A FURTHER ANNOUNCEMENTS COMING OUT, WHETHER IT IS A ' S INDICATING THEY MIGHT MAKE A DECISION OR NOT, OR YOU HAVE THE TREASURY SECRETARY SAYING WE COULD NOT NECESSARILY HAVE CRYPTOCURRENCIES THE COMING THE EQUIVALENT OF A SWISS BANK ACCOUNT. THE INDICATIONS ARE THERE THAT SOMETHING MIGHT BE DONE. FROM A TRADING STANDPOINT, CLEARLY SENTIMENT IS DRIVING THE MARKET. WHY? BECAUSE AS OF YET WE DON ' T NECESSARILY HAVE MASS ADOPTION ON THE PART OF BITCOIN FOR PAYMENT PURPOSES. WE HAVE THESE MOVES IN TERMS OF PRICING, BUT IF YOU LOOK AT THE UNDERLYING TRANSACTIONS IN BITCOIN, I HAVE NOT GONE UP AS MUCH, WHICH CLEARLY INDICATES A TYPE OF SPECULATIVE MOVE. ALL OF THESE ARE ELEMENTS THAT WOULD ARGUE THAT HACKING AND FILLING MIGHT BE THE -- BACKING AND FILLING MIGHT BE THE ORDER OF THE DAY. WE WOULD NEED AN APPLICATION THAT WOULD LEAD TO GREATER MASS ADOPTION. RAMY: WE HAVE SEEN THIS RISE IN TERMS OF INITIAL POINT OFFERINGS. THE SKEPTIC IN ME WANTS TO ASK HOW MUCH OF THIS IS OPPORTUNISM TO GET ON THE BANDWAGON BEFORE IT FALLS FURTHER. DAVID: I HAVE NOT SEEN THE WILLIE SUTTON ICO. HE WAS FAMOUS FOR ROBBING BANKS. THAT SAID, WERE LOOKING AT ICO ' S WITH A BROADER ADOPTION OF BLOCKCHAIN, BECAUSE YOU CAN USE IT FOR A WIDE RANGE OF APPLICATIONS. IT CAN BE USED TO COMBAT ADVERTISING FRAUD AND DIGITAL ADVERTISING. THERE IS A NEXT WILL USE CASE AND CUSTOMERS ARE USING THE TECHNOLOGY. AS INVESTORS GO THROUGH AND LOOK AT THE ICO , YOU HAVE TO LOOK FAR MORE CLOSELY, THESE ARE NOT REGISTERED WITH THE SEC, THEY MIGHT NOT HAVE A STANDARD DISCLOSURE. YOU HAVE TO ASK IF THERE IS A GOOD UNDERLYING USE CASE, YOU ALMOST HAVE TO BE A VENTURE CAPITALIST, DOES THIS APPLICATION MAKES SENSE? WE WANT TO MAKE SURE WERE NOT OUT THERE BUYING THE DOGGIE COIN, WHICH IS NOT HAVE AN UPDATE IN TWO YEARS AND HAS A BILLION DOLLAR MARKET CAP. RAMY: I THINK IT ' S $2 BILLION. DAVID: NEVERTHELESS, IT IS A JOKE. NEVERTHELESS, SOMEONE IS BUYING IT. DAVID: I AM CURIOUS, YOU SAID $5,000, WHY $5,000? DAVID: I AM DOING IT MORE ON THE BROAD SENSE OF SEEING WHAT THE GENERAL LEVELS FROM WHICH THERE ARE ACTUAL MOVES. IN THE LAST SIX MONTHS. AND ARGUING TO THE EXTENT THAT WE HAVE SEEN THIS METEOR RISE IN THE -- RISE IN THE FOURTH QUARTER, WE ' VE SEEN MORE OF AN INSTITUTIONALIZATION OF THE MARKET. WE ARE NOT NECESSARILY A POINT WHERE WE HAVE A FULLY BLOWN MARKET TO THE EXTENT WE CAN ' T GO OUT AND BASICALLY SHORT GOING OUT RIGHT, BUT AT LEAST WE CAN USE THE FUTURES MARKET TO APPROXIMATE SYNTHETIC SHORTS IN THAT REGARD. WE NEED TO SEE HOW THESE PLAY OUT. I WOULD ARGUE THAT AS THINGS BECOME MORE INSTITUTIONAL, THEY PERHAPS BECOME A LITTLE BIT LESS SUSPECT TO THE KIND OF FRENZIED ENTHUSIASM YOU MY FACE -- YOU MIGHT SAY HAS CHARACTERIZED THE MARKET TODAY. DAVID: FOR THOSE JUST GETTING IN WANTING TO TRADE THIS THING, WE LOOK AT -- WHAT ARE THE SIGNPOSTS WHEN I TRADE CRYPTO? MR. GARRITY: SUPPORTED BY UNDERLYING TRANSACTION MOVES. BITCOIN IS NOT THE ONLY CRYPTOCURRENCY OUT THERE. THERE ARE OTHERS SUCH AS ETHER BEING USED TO BUILD OTHER APPLICATIONS. ARE WE STARTING TO SEE THESE KILLER APPLICATIONS START TO LEAD TO GREATER MASS ADOPTION RELEVANT TO THE BLOCKCHAIN PROTOCOLS UNDERLYING THE CRYPTOCURRENCY? THE HAVE A PRICE MOVE NOT BEING MATCHED BY WHAT IS HAPPENING IN THE REAL ECONOMY IN TERMS OF GOODS AND SERVICES, IT PROBABLY IS SOMETHING MORE OF A SPECULATIVE NATURE THAN HAS UNDERPINNINGS. YOU NEED TO HAVE CONFIDENCE TO SEE WHAT IS GOING ON THE REAL WORLD. DAVID: GOOD POINT. DAVID GARRITY THERE.

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GVA Research CEO Garrity Sees Bitcoin Falling to $5,000

David Garrity, chief executive officer at GVA Research LLC, discusses the volatility in Bitcoin and his outlook for cryptocurrencies. He speaks on "Bloomberg Daybreak: Asia." (Source: Bloomberg)

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