ETF Edge - Quiet Crypto Comeback 5/6/26

Episode Date: May 6, 2026

After losing half its value since its peak last year, Bitcoin has been quietly rebounding during the past month. What could that indicate about cryptos in general and the ETF ecosphere that surrounds it?       Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The ETF Edge podcast is sponsored by InvescoQQQ. Let's rethink possibility. Investco Distributors, Inc. Welcome to ETF Edge, the podcast. If you're looking to learn the latest insights on all things, exchange traded funds, you're in the right place. Every week, we're bringing you compelling interviews, thoughtful market analysis, and breaking down what it all means for investors.

I'm Leslie Picker in for Dominic 2. Crypto's staging a comeback, but what plot twist is waiting in the next act? Here's my conversation with Matthew Siegel, head of digital assets research at Banach Funds and Sal Gabherty, President and CEO of Tukrim Trading. Matt, you note that Bitcoin has lost nearly half of its value since peaking it at $126,000 in October of 2025. It hasn't closed above its 200-day moving average in seven months. We're right under that level now. Do you feel like it's poised for more of a breakout? We do think that when we look back on this in 12 years, Bitcoin in 12 months, excuse me,

Bitcoin is likely to reach its all-time high again. When you look at investor surveys around where folks intend to buy, Bitcoin shows up close to the top of the list. The correlations with the NASDAQ are quite high at the moment. So I think that's one thing investors need to be aware of is that this move has been turbocharged by U.S. stocks being, you know, so resilient. But one thing that keeps us pretty constructive here is that there isn't much optimism in the derivatives markets, futures and options. It still looks to us like this is short covering and folks are paying a lot for protection. So the contrary intake to be, to that would be the rally

continued. So you would give it more of a correlation to equities and more of a risk sentiment or maybe not since we're not seeing that options activity that would suggest that to be the case? Bitcoin's correlation with the NASDAQ ebs and flows. And right now, it's at close to a five-year high. So if stocks were to sell off and those correlations hold, then, you know, at any given point, a 10% correction in Bitcoin is no big thing. We're used to that. But I think that's the warning I would make. But you never know who the next buyer is going to. to be. We've had one central bank already this year that has announced that they're going to add

Bitcoin to their foreign exchange reserves. That's a sea change in terms of making this asset a global settlement asset that's used in trade for large-scale cross-border transactions. We think that's a megatrend. So medium turnout looks still pretty positive here. Interesting. Let's talk about flows, Saul, because you know that April was the strongest month for crypto-etf inflows in 2026 so far. Spot Bitcoin ETFs pulled in roughly $2 billion. Ethereum ETFs broke a six-month outflow streak. What do you think happens from here?

I think the inflows continue. I think Matthew's exactly right, that it's a megatrend. And so the adoption of crypto in general, the adoption of blockchain architecture into the traditional financial system is accelerating at a pace that people don't understand how big it is, how fast it is. And so there's there's a mega trend in terms of useful crypto is going to be tokens with a use case with a very specific use case. They're going to be attractive to investors and continue to be attractive to investors. Bitcoin, of course, is the headliner. That will always, investors always have a number one interest in Bitcoin. And so I think that

indexes that contain multiple cryptos are going to become more popular as well. So I think I think we're at the beginning of this push and inflows. We're not even close to the start. Interesting. And of course, one of the big looming questions that's out there involves regulation. You both note the importance of the pending Clarity Act. So I'll start with you because you report that the regulatory backdrop has really shifted meaningfully over the past month or so. What do you mean by that?

Why do you feel like things have really changed in a big way? Well, I think that, again, we have an administration that's crypto-friendly. That's the number one help. I think that the regulators have found themselves. There have been a lot of cuts inside the government. I think they've found their way. The process that we as ETF issuers have to go through is unchanged. There's still very deep scrutiny of the products that we want to list.

There's a lot of pushback from the government. But they're open to hearing new products and crypto-related products. And that's really, really important. I think the Clarity Act, whether it passes or not, is just a matter of the speed of institutional adoption in terms of investing in crypto. In terms of institutional adoption of the blockchain, whether the Clarity Act passes, it makes no difference.

That will continue. So a passage of the Clarity Act would be wonderful. It would speed things up, especially from in terms of an investor-and-flow perspective into, say, ETFs. But if it doesn't pass, it's not the end of the world. Matt, do you agree with that? I mean, one reason why our on-chain economy, ETF node, is up 75% since inception,

while Bitcoin is down 20%, is that we've focused on the companies that can actually earn a cash flow from the adoption of blockchain technology. And the big trend in the markets over the last year plus, at least in CryptoLand, has been the underperformance of these altcoins like Ethereum, like Solana, as the listed equities begin to capture. the technology and the value from some of these blockchain solutions. So we've been very underweight altcoins within Node, and the passage of the Clarity Act, I think, is a major question mark.

That could reignite some animal spirits in that space. But we're still pretty cautious on this alt-coin market. I think the investor protections that are still yet to be worked out keep a lot of institutions on the sideline. If clarity passes, that might be a time to even buy higher if the details will matter there. But we've been calling Bitcoin dominance higher outperformance of Bitcoin miners because of the AI convergence. And I'm still sticking with that trade and have not really pivoted to these alts.

So what about XRP in relation to Bitcoin and Ethereum? Well, it's got a use case, a very specific use case. And more in particular, the XRP ledger has a use case. So Ripple, the company, has as its 13- or 14-year mission, however long it's been, to move internationally value, okay, and primarily money. And so their chain, their XPRL chain will be used for that. XRP is a part, it's a tool on that chain. And so all of that will be used as it grows.

And so that's all being built out. It won't be the only thing, as Ripple itself says to people all the time, they're not going to be the only participant in this. But it's so big, you have to liken this whole thing to the internet in the 90s, truly. And so that's where we are. We're in the 90s. We don't really know the technologies that will even come out of the use of the blockchain and these buildouts that are happening.

We just know it's here now and the things that are growing now. Does that mean you think it's a bubble? It's not even close to a bubble. No. So not even close to the 90s as it pertains to just broth. I mean the use of the internet. So if you take the first, frothiness out, okay? I mean, the development of the internet as a tool for business and every

person in the world, that's happening with the blockchain. And we're just at the very beginning of that. All right. What about other infrastructure plays, Matt? What are you seeing in terms of just additional opportunities as it pertains to this ecosystem? Yeah. I mean, where we've done best this year is in investing around the infrastructure required to run the Bitcoin network. So Bitcoin is famously pretty energy intensive. And we noticed a few years ago that if you read the conference calls of the, even the publicly traded utilities, they were starting to call out Bitcoin mining as a driver of the underlying load growth. So we realized that these Bitcoin miners were actually sitting on one of the key bottlenecks of the AI trade. They had a long

history of developing these power assets and bringing them to the market. And there's a really nice reflexivity with Bitcoin and AI, which is that the more the AI story gets derrised, the less Bitcoin these guys have to sell to pay for their pivots. And so these miners have been big sellers of Bitcoin over the last year. That is starting to come down because the AI side of the business is on fire. So they don't have to sell as much. And that's a really virtuous cycle. That's still our kind of number one exposure in the Node ETF, at least. And then there's kind of single stocks like a circle, like a figure that are using blockchain to speed up certain core parts of the financial system in a way that's bringing down costs.

And I think there'll be more losers than winners when it comes to that technology, actually. The consumer is going to be a big winner. And there'll be a handful of companies that will turn from small and medium to very large. but it's actually the idea is to avoid the losers as much as you can find those winners. I want to back up a bit here to the ETF industry as a whole, as both of your firms have been pretty big innovators in terms of delivering product. The hot topic of lately has been the possibility of prediction market ATFs. Just this week, first movers have been delayed by SEC review.

Matt, how are you feeling about just the optionality and the possibility? of these prediction markets, ETFs? Yeah, we have some R&D going in the space. I think that the regulation is going after more the sports side of prediction markets, and that may be where some of the larger ambitions in the space get toned down a little bit. But in terms of betting on the fundamentals

of corporate America, that's going to be a growing trend, a way that investors can hedge exposures, even within their traditional brokerage accounts. So we're looking at the space and encourage. Saul, what do you think? I agree with Matthew. I think that we are looking at the space.

Sports has a damper, and that's primarily because of the gambling rules that happen in each individual state, and so there's going to be some hurdles there. But I think that the new, younger investor, and I hesitate to even use that word, they like instant outcomes. They like lottery tickets.

They like games, and they like binary instant. outcomes. And so if somebody can figure out how to package whatever appetite is out there into an ETF, those things will come to market. But I don't think they're for long-term investors. Levered prediction market. I mean, we'll see what happens on that front. But interesting to hear that you've got R&D in the works and that everybody is looking into this space as well. Before we let you go, we want to get your outlook for soft commodities, especially in relation to the derivative impacts of the situation in the Middle East, fertilizer production.

and the like. What is your outlook there? Well, obviously with the fertilizer disruption, the disruptional supply, and the resultant rise in prices, we have immense interest in our grain funds. Money's been pouring into grains. If you look at the flows in ETFs, flows have been going into multi-commodity funds, and they've been going into agriculture. And for the reason being, most people want some commodity exposure in an inflationary environment.

Inflation probably isn't going anywhere anytime soon with energy prices elevated. And with energy prices elevated and fertilizer prices elevated, you could be coming into a multi-year problem. Because we've got plenty of grains right now in the world. But if you cut back on your fertilizer this year, and we're just planting right now. So you cut back on your fertilizer this year, you will grow less, you'll have less crops. The residual effects of that, meaning the leftover crops at the end of the year, which is usually quite healthy, may not be so healthy come next year. And if fertilizer prices are still high, farmers make those decisions in the autumn. We only need fertilizer prices to stay this high and supplies to stay this disrupted for another six months.

And it will affect next year's growing season, 2027. So it's a long-term issue. And investors are starting to notice that, and we're seeing the money flows. What do you think? Well, I would say that when we look at commodities, Bitcoin is a commodity that you can send to anyone in the world and you don't need the Strait of Hormuz to be open to do so. And that's why, you know, Iran was willing to accept Bitcoin to open the straight of Hormuz. is for certain vessels, and part of the reason why Bitcoin's outperform gold and many other

commodities since the war began. That does it for ETF Edge, the podcast. Thank you for listening. Join us again next week or head to ETFedge.c.com. Over the last few decades, technology has transformed our world in amazing ways. Through it all, InvescoQQQETF has connected investors to the forefront of innovation. Access the future today with InvescoQQQQ. Let's read it all. think possibility. There are risks when investing in ETFs, including possible loss of money. ETF risks are similar to those of stocks. Investments in the tech sector are subject to greater risk

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