Bitcoin briefly drops below $60,000 for the first time since March 5: CNBC Crypto World

Today, Ether tumbles below $3000 for the first time since February. A new stable coin bill just dropped this morning. Antiago Sada from World Coins parent company Tools for Humanity, explains the identity platform’s new L2 blockchain. Welcome to CNBC’s crypto world. I’m Mackenzie Sagalos. Major crypto currencies are back in the red this morning. By noon, Eastern Bitcoin fell 2 1/2% to just above $60,000, while either fell 2.1% and dropped below that $3000 price threshold for the first time since February. Solana on the other hand, in the green rising about 3/4 of 1%, the economy still remains a focus for crypto investors, especially after Fed chair Jay Powell said yesterday that inflation is persisting and signaled that the central bank is not ready to cut interest rates. There’s also, of course, the tensions in the Middle East as Israel weighs a response to Iran’s attack from over the weekend. OK, let’s talk about the top stories. Pop Investments founder Anthony Pompliano joined CNBC Squawk Box this morning, where he discussed markets. And the halving, which is just days away talking about Bitcoin is crashing to $64,000, was a dream just a few years ago. So we’re up significantly. Since the last halving to today, about four years, we’re up 800%. So it’s been an incredible performance this year. Year to date, it’s about 40%. Compare that to gold. Gold’s up 7%, you know, year to date. And in the last five years, it’s only up about 11%. The reason why I bring that up, what I think is really interesting is you actually have lost purchasing power if you’ve held gold over the last five years. Inflation has outpaced gold’s performance. So the whole narrative of gold protects your purchasing power is now been debunked, right, for the last five years. That’s not true. Bitcoin has. So when we start talking about this price run up that 40% increase to start the year, all of a sudden, why is the price going up? ETFs are a huge piece of it. Also I think people leaning into the halving, that’s a big piece of it. But the government has decided we are going to debase the currency, right? And I think that now the world has understood the United States has a debt problem and we’re going to debase the currency. So there’s some of that going on as well. Papiano also addressed what he thinks was behind last weekends crypto sell off. Whenever there’s a moment of fear right, everyone panics and what do they still buy? Dollars. And so some people are selling because of that. The second thing is on the weekend, even though the Bitcoin market is open, the bank system is not open. And so you can’t get net new dollars into your crypto account to buy Bitcoin. So the only thing you really can do is if you’re holding Bitcoin, you can sell it. But most of the people holding Bitcoin are fully allocated, so they don’t have dollars to go buy more Bitcoin. There’s a very interesting dynamic where even though you want to buy more Bitcoin, you’re closed out of the system as well because the banking system won’t let you wire in. Pompliano forecast that Bitcoin could cross $100,000 within the next 12 to 18 months, and he said that it could potentially hit $150,000 like others had predicted, but said that people shouldn’t expect the explosive 1000% move from here for the rest of the bull market. As for the downside, he doesn’t think the cryptocurrency will drop below $50,000. Last up, two senators just dropped a new stable coin bill this morning. Senators Kristen Gillibrand, a Democrat from New York and Symphony Lummus, a Republican from Wyoming, said that the bill aims to create a regulatory framework for stable coins, including mandating A1 to 1 reserve, banning algorithmic stable coins and complying with US anti money laundering and sanctions rules. Senator Gillibrand said in the announcement that the bill would protect customers while promoting U.S. dollar dominance while preserving the dual banking system. Both Senators joined CNBC this morning and expressed their optimism in progressing the bill and how the bill would tackle the use of stable coins in illicit transactions addressing illicit finance. This stable coin legislation creates A framework where it rests on top of the dual banking system. It uses the protections of know your customer and anti money laundering protections in the banking system. You know the worst thing we could do if stable coins are being misused around the world is to step away and not regulate them. The whole purpose of this bill is to protect consumers. While we acknowledge the existence and use of stable coins now, this isn’t the first crypto bill that the Senators have drafted together. Back in 2022, they introduced the Responsible Financial Innovation Act to bring comprehensive crypto regulation. That bill was reintroduced in 2023. All right for our main story today, Worldcoin. That project that was Co created by Open AI Sam Altman, revealed its new Layer 2 blockchain. Ahead of today’s announcement, Crypto World’s Talia Kaplan spoke with Thiago Sada. He’s the head of Product Engineering and Design A Tools for Humanity, which is the main developer of Worldcoin. About the new L2. He also addressed recent privacy concerns tied to Worldcoin’s key feature. It’s iris scanning technology. Tools for Humanity, which is World Coin’s parent company is announcing a new L2 blockchain called World Chain, and while the announcement is happening now, the blockchain is expected to launch this summer. It’s permissionless open source, and intended to be ultimately owned and governed by the community. I understand that this is part of World Coin’s effort to address issues related to bots, which can cause congestion on Chain. Can you elaborate on the goal of this new blockchain and take us through what prompted this all to come about? Yeah, definitely. So first of all, we’re very excited. We’ve been working the entire community for a long time on this, so happy to finally share it generally in the first place. The reason we started thinking about World Coin having its own blockchain was because we just don’t fit in the existing network where we’re in. We are currently more than 40% of all of the capacity in the network, and it was just making clear that World Coin needed to have its own home. Now like you said, something really interesting about World Chain is that it’s designed for humans. What that means is that transactions that are submitted by humans get prioritized block space and also verify humans get a free gas allowance. And so that’s important, not just because it has a better user experience, but it just makes it a lot easier for people to get started using all of these types of applications and protocols in a way that just hopefully leads them to higher adoption. So how will you be able to prioritize humans over bots? How will this new blockchain work exactly, exactly? So first, it’s important to say that on a foundation level, this is just like a normal EVM compatible chain. The base token is Ether. It’s permissionless. Anyone, regardless whether it’s a bot, a verified human and verified human can submit transactions. Now on top of that, there will be an additional layer that if you’re a verified human with a verified world ID, that is you verify it on your phone or you verified it by visiting an orb, then you get access to like an express lane where your transactions are prioritized. So that we make sure that hey, all the transactions for real humans can make it, and then all of the additional block space, then that can be for bots and for whatever people want. But we want to make sure that humans can get their transactions in. Now. Turning to privacy, there have been concerns tied to World Coins Orbs, which collect data by scanning eyeballs. In fact, last month Spain’s privacy watchdog ordered World Coin to temporarily stop operating in the country amid concerns about what it was doing with the personal information of users. A few weeks later, World Coin was hit with another ban in Europe when Portugal’s data regulator ordered it to stop collecting biometric data for 90 days. Since Worldcoin launched last year, criticism related to privacy surrounding its key feature led to regulators, including those in the UK, to look into the project. What’s your reaction to all these privacy concerns, especially the recent bans from Spain and Portugal? So generally it’s one of the most counter intuitive things about the project is not just that the ORB is private and the World ID is private, but it is perhaps one of the most private systems we’ve ever used online, period. There’s a lot of resources online for that. And the ORB firmware itself has actually been recently open source. And so people can go and take a look at that directly. Specifically when it comes to governments, look, I think it’s very natural that when projects of any type start getting to the scale that world Coin is reaching, governments should look in to make sure that the statements that are being made are in fact accurate. And so generally speaking, any country where you see orbs, we’re probably engaging with with the governments in some capacity, whether it’s to make sure that they understand what is happening. Most of the times they can do those checks while operations are still going. Every once in a while they will ask us like, hey, can you please pause for a couple of weeks or a couple of months so we can review that. And of course what we would prefer for that to not be the case is completely normal. This is a long term project. They will take years and decades to build it. And so if someone needs a couple of weeks to fully understand it, we think that’s totally fine. So you’re confident that Spain and Portugal will allow Worldcoin to start operating in their regions once again? I’m confident that World Coin is not only compliant with all of the regulations, but that it is one of the most private systems that have ever existed, much more than something as basic as social media that we use today. Now I want to focus on something you just mentioned. About 3 weeks ago, Worldcoin announced in a blog post that the core components of the ORB software are now open sourced and completed a privacy audit. What was revealed in that audit and what other steps are being taken to protect personal information? Of course, yeah, so it’s these are very important steps. For a couple of years now, we’ve been gradually open sourcing different parts of the stack. There is something called the world on the Internet where people can see every single part. What is the status? And we took a really big step earlier this year by open sourcing the ORB firmware. That means that now the ORB hardware, the ORB firmware, the ORB AI models and the identity protocol, all of those are completely open source. In addition to that, we migrated to a system that we announced in December. I think you actually talked with Alex about World ID two point O where now the data that the ORB verifies users will actually hold that self custodially on their personal devices just as the private keys for their for their wallets leave on their devices. So ultimately this is all about giving people more control over how they want to use or delete their data so they can do it directly. Now were these steps taken in direct response to all the privacy concerns and temporary bans and regions around the world? Are you noticing a shift now that World Coin has taken steps to protect personal information? Are you noticing people are more comfortable with the IRS scanning technology now? So all of these changes have honestly been under the works for a long time. Many of them are even mentioned on the white paper. For example, this personal custody was announced in December. Now, we’re obviously always in conversation, not just with regulators, but with experts and with the community. And there are many changes, things that the community has just come up with different ideas or regulators have suggested going about things in different ways. This is a community project and I expect that over the coming months and years that will continue to be the case. To your question about how do people feel about this, definitely the responses, people are excited, right Before the systems were open source, you sort of had to trust either the teams building it or some of the auditors, even if they have really good reputation. Now you don’t even have to trust those auditors right now. You can just go on GitHub and look at the code yourself and you know exactly what is happening now. As you noted, we spoke with your CEO back in December when he introduced Worldcoins World ID Two Point OA protocol update meant to help distinguish between bots and verified humans online while preserving privacy. At the time, he acknowledged that Worldcoins backlash is not surprising. Do you agree? And is this something the product and engineering team took into consideration when building the orbs? Yeah. So I mean, with any type of technology, like you have the early adopters, then the rest of the population and then some late adopters. I remember when I first got my my first phone, my dad was saying I will never have one of those things and now you cannot get him away from his phone. I think that’s totally natural, to be honest. Right now in this phase of the project, we’re just fully focused on serving all of those early adopters that are really excited to join all over the world. We can’t make orbs fast enough. We can’t put them out into the world fast enough. A really big reason for why World Chain was built in the 1st place. So I was saying is which is running out of capacity, right? We there’s no more room to process all of the transactions and to welcome all of the users that want to join. So we’re right now focused on that. And what we’ve seen is as people start signing up, people in their communities, their friends, their families start hearing about the project, they understand that it’s actually incredibly private. And then they eventually go and verify. OK, that’s all for Crypto World today, but we’ll be back again tomorrow and we’ll see you then.