Tom Farley, Bullish CEO and former NYSE president, joins CNBC's 'Squawk on the Street' to discuss Bitcoin's volatility, crypto's security and more.

Bullish CEO and former NYSE president Tom Farley stated that Bitcoin's volatility is expected to continue for the foreseeable future. He explained that the need for incremental buyers to absorb newly mined Bitcoin contributes to price swings, especially when large buyers like MicroStrategy reduce their purchases.

Farley also addressed concerns about crypto security, noting that while hacks and frauds have declined significantly, they remain a key risk. He believes the crypto sector is becoming more institutional, with improved trust in exchanges and custodians, and predicts that more financial assets will move onto blockchain technology in the coming years.

Bitcoin's volatility 'here for a long time,' says Tom Farley

Joining us this morning to talk more about Bitcoin's volatility is Bullish CEO and former NYSE president Tom Farley, who unfortunately is not on set, but it's great to see you, Tom. Thanks for the help. Hey, Carl. Next time I'll be on set. I'm actually headed down to D.C. to lobby the market structure bill to make it in. Oh, nice. Well, you were here a couple of weeks ago, and we talked about some of the volatility that we saw in November. Are you heartened by this return to $90K at least? Yeah, although I'm not surprised. Now that I'm a full-time crypto guy, I've had to just kind of put away my phone and my price charts on my desktop, because otherwise it's too anxiety-inducing. The volatility is real, and the volatility is here for a long time. When you think about Bitcoin in particular, a simple way to think of it is there's 160,000 Bitcoin that are mined each year, 2025, 2026, and so you have to find an incremental buyer of that roughly $15 billion worth of Bitcoin. And in the first seven months of last year, MicroStrategy alone covered up that 160,000 Bitcoin buy. They bought 180,000 Bitcoin. And in the last five months of the year, they only bought around about 15,000, 15,000, 20,000 Bitcoin. So you pull out that marginal buyer, you're going to get more volatility, you're going to get more downdrafts. So it's not entirely shocking, but 90,000, we are where we are. I'm still a long-term bull. Bullish holds 24,000 Bitcoin. We continue to hold those Bitcoin. We'll see where it goes from here. I know there are some macro concerns, Tom. Like yesterday, everyone was worried about the Bank of Japan raising rates, but also some of the crypto companies were reporting about this Yearn Finance, this DeFi protocol based on Ethereum, triggering the big sell-off on a hack, basically that this is still happening and that these companies are still getting hacked, whether it's by foreign actors or foreign companies. And it does make you wonder if the infrastructure is in place safely to own these cryptos. Yeah, I personally, Sarah, going back to 2021, 2022, I had some tough internal monologues about my career choice with hacks and with frauds. But I can tell you, that number has declined dramatically. And we kind of woke up about six months ago and we said, geez, this now feels like an institutional asset class where, by and large, the centralized exchanges are trustworthy. The custodians absolutely are trustworthy. There's fewer and fewer major hacks because these are now battle-hardened rails. And we're going to see major financial asset classes move on to publicly available blockchain and related technology over the years ahead. There's no question there are still hacks, and I'm not minimizing the impact of that. It's scary stuff. I think it's the number one risk for any crypto company, and if it's not, they probably shouldn't be the manager of a crypto company. But the numbers have declined dramatically.

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