The Wolf Of All Streets - Extensive Market Analysis & Macro Recap | ETF Update | Crypto Town Hall

Episode Date: February 2, 2024

Crypto Town Hall is a daily X Spaces hosted by Scott Melker, Ran Neuner & Mario Nawfal. Every day we discuss the latest news in crypto and bring the biggest names in the space to share their insight. ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. USE CODE ‘2MONTHSOFF’ WHEN VISITING MY LINK.  👉 https://tradingalpha.io/?via=scottmelker  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/    ►► OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $10,000!  👉 https://www.okx.com/join/SCOTTMELKER ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets    Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Testing, testing, William, can you hear me? Yes, I can. I'm going to order Scott to not speak at all in this space. It's an order. Now watch him listen to my order. He listens to everything I say. Just because I said so, he's not going to speak this entire space. That's how much influence I have over Scott.

Just watch, William. You mark my word. I just told him not to speak. He's up as a cause. Because I told him that he will not speak this entire space. Okay? You can make a bet if you want, William, as well. Cool.

You're not taking the bet. Means you believe me that he will not speak. Ron, I see you connecting. So just waiting for you to come up. Matt, I've just sent you through an invite as well. Just for the audience, we'll kick off the show shortly. Feel free to retweet it. I can't shill it like the YouTubers do.

Like, retweet. Like it now. I'll give you so much alpha. If you like it, retweet it i can't shit it like the youtubers do like retweet like it now i'll give you so much alpha if you like it retweet comment and if i get 50 retweets everyone will get incredible alpha on which uh shit coins to invest in it's probably our new strategy get retweets matt how are you doing great doing great how are you gonna Doing great. Doing great. How are you? Good. Good. Go through the ETF.

Good, good. Pleasure to have you. We're going to go through the ETF. I know everyone's trying to avoid the ETF discussion. I was watching Scott's show earlier as well, just get an update. And the first thing he says, like, I'm going to try to avoid the ETF discussion. I don't understand why. I think it's one of the most important metrics to measure right now, just institutional interest in the industry.

I think it's one the the main talking points even though people say they're sick of it i just don't agree so uh i'm gonna do the opposite of what ryan has got say i'm gonna say we should focus more on the etf but we get a market update as well we'll keep it short today but uh you know having you ryan and others on space uh makes it pretty easy as well so appreciate being here ryan you ryan you there perfect i mean i'm the biggest fan when it comes to the etfs and discussing them but no other show discusses them as much right and when i'm when i'm moderating the show etfs are the topic that we'll be focusing on not jupiter not not not to be but you knew that's the the etfs i think we can kick it off fam just want to just give a shout out to killer whales it's a reality show they're not sponsored

the show but me and ryan are judges there and they're launching in six days so i'm actually just let me pin their tweet if anyone wants to watch they'll put out a new trailer today i'm just so proud of their production it's incredible let me see if i can find that new trailer and then i can pin it it's going live on tv i don't know which country is going live first um around the world there it is i've just pinned it if anyone wants to check it out hey you see me and rand bicker a lot when you watch the episode i think the first episode is mainly me and rand bickering you got crypto crypto ndo as well and then Scaramucci being the big father figure and telling us to stop arguing. So if you want to check out that trailer, it's pinned above,

and in six days you'll be able to watch the first episode. But let's kick it off. I'm going to jump straight to it. Actually, William, it would be good to have a chat to you first. Let's get your thoughts on the week. Obviously, we've got the FOMC meeting, we've got the job numbers as well, and the Amazon amazon facebook and amazon facebook and apple beating expectations as well i would love to get your thoughts just a macro update on the week um your thoughts on the economy on the fomc meeting again just a quick recap and then the crypto market in general and what do you think of the performance over the last 15 days since the ETF launched? And we'll go to Rob and then we'll get into an ETF discussion. Yeah, thanks, Mario. Actually, I can't stay too long.

I'm just going to say a few things. What I'm seeing, I mean, we're very much in a sideways situation. I think we keep wanting to connect what's going on in the crypto space to the economy. But there isn't a lot really that is connected right now. The biggest connection we have is that 3% of all of the Bitcoins are in ETFs. And as I said yesterday, I think we need to have that number go up closer to 10% to really see some interconnection. So right now, I'm just in a holding mode. I'd like to see more financial products that use Bitcoin beyond the ETFs. And the Bitcoin story is really a financial product story into the traditional markets.

So we need to grow that pie first. Correct me if I'm wrong, but this is either you haven't been on the show too many times, or this is possibly your first time on the show. Rob, are you there? Yes, I am. Yes, this is my first time on the show? Rob, you there? Yes, I am. Yes, this is my first time on the show. Thanks for having me, Mark. Pleasure to have you.

We'll keep a general question, a similar question to William. Your thoughts, the economic numbers, their impact on crypto, and then maybe get into the halving discussion. I was looking at some charts. I think Ran was discussing them, not Scott. And I was going through some of the charts

of the price of Bitcoin and last halvings. I think halving number one, the price of Bitcoin was $12. That was in 2012. Halving number two, $675. Halving number three is $9,760. And then the question is, would we see a history repeat itself with a halving dump? And I think the narrative, let me see if there's shows that, okay, one of the titles they wanted to choose is like, should you forget? Oh, there it is. They did choose it. So forget crypto and come back after halving. And we'd love to get your thoughts on whether we're going to see

the same price action considering institutions are coming in. Yeah, I would say generally until the trend line is broken, we have observable data at this point. I believe it's going to continue

kind of ramping up, especially, you know, it's easier to move like a $50 million market cap asset by Bitcoin in 2011 versus, you know, a couple, like, you know, a couple billion in like, you know, 2014, 2015. But the reason why I would still expect to see a general just like resurgence is that the larger amounts of dollars are starting to come in, right? We're dealing now with the ETF and financialization of Bitcoin as it gets integrated into the larger financial system. I would generally expect to kind of continue seeing this trend line. I think the price run

that we've had up from, you know, let's say Q4 of last year to the ETF launching was a lot of Wall Street money front running and seeing that. And we haven't seen a parabolic snap up of price, you know, in the first two weeks of the ETF, because a lot of people were closing their trades, a lot of people had money inside GBTC, and grayscale, the largest now ETF that were just kind of holding a arbitrage, right, they were buying GBTC at a 40% discount to then sell it at par. So you have natural sell off pressure there. But this is just part of the distribution of Bitcoin, getting financialized and better integrated everywhere. And I think as just larger global macro economic instability continues to happen, I think a lot larger players are getting easier access to Bitcoin, which even though we know right now we're at a $750 billion

asset, the amount of marginal dollars now can enter the space because of the ETF makes it an order of magnitude more money coming in. So even though it's getting bigger and bigger and it's a bigger stone to roll up the hill, there's a lot more force coming behind it to keep pushing it upwards. Yes, I've got my question. We like you've got two narratives. You've got the Bitcoin having dumped its history repeating itself. And then the second narrative would be the the with the GPTC outflow slowing and inflows either staying steady or increasing because the volume at grayscale for the first time, I think in the last few days or recently, for the first time is higher than the volume in grayscale. So do you think the ETF consistent inflows would outweigh the narrative around a pre-halving dump?

Yeah, so I guess for like the next two months, I would say that it's going to be a bit of a tug of war. I think the halving, traditionally in Bitcoin, the halving always dumps and then, six months afterwards, you got to get these really big rocket ships upward in price, as kind of the full market like distributes the fact that there's you know half as much bitcoin coming out uh i i would probably be of the general belief if i had a place like a market bet um and try and do a trade which is not typically what i do i would guess that we're actually going to probably see uh it's going to probably be flat maybe even slightly to the downside for the next couple of months, only because the larger financialization of all of these financial managers

and asset managers, it's not even plugged into the larger infrastructure to be able to start selling this. It's like you're in a registered investment advisor. You know, the ETF just got listed, but it's going to take weeks and months for that to get integrated into their platforms for them to start distributing it to their end, you know, customers that they're providing financial guidance for.

I can link that to the next question, since we have two lawyers on stage. Is there any overhangs you should be watching closely? Because the FTX saga has pretty much ended. Customers are going to be made whole, obviously. Depends how you look at it, but at least they're going to be made whole at the price of Bitcoin when they file for bankruptcy. So not ideal, but definitely better than, you know, alternatives. But then you've got the Coinbase Binance versus the SEC, which Carlo and Zach could update us on that.

Is there any other overhangs we should pay attention to that could change? So the Coinbase and Binance lawsuits, I think, are more of a narrative overhang, right? Things could get bearish for cryptocurrency in general, if they lose those lawsuits, or if those lawsuits are going badly. But it's not like those institutions are going to dump a bunch of Bitcoin. I think in terms of like, Bitcoin specific overhang, there have been a bunch of huge seizures this week. There was one in the UK, I think about $1.5 billion worth of Bitcoin, and then one out of Germany, which is over $2 billion worth of Bitcoin. And then the United States government, I think has several hundred million

dollars worth of Bitcoin that they're going to sell. And, you know, that will be some additional sell pressure that, you know, hopefully they'll execute that smartly, and it'll be over the counter trades, and it won't affect the price that much. But that is definitely some Bitcoin that is going to hit the market. Carlo? Yeah, good morning, all. Thank you for bringing me up. So I have to agree with you. And I want to stress the significance of what happened in FTX, because it is really, really rare that unsecured creditors get any chance at recovering assets in a situation like this. So for this serendipitous change of events where this instant liquidity came in and they were able to recoup all this money to return to these

victims is astonishing development. I have to agree. I don't think the Coinbase and Binance cases are necessarily going to be that significant in the way that they work themselves out. You also have on the horizon the Kraken case, because even though Kraken settled with the SEC, remember, then the SEC went after Kraken again. So we essentially have three of the largest exchanges in the world, all facing SEC suits. How could they, if there's a settlement, how could they go after them again? It's a completely different... Well, they only settled on the staking issue. They entered into a settlement on the issue of staking and they withdrew staking from their platform.

But then they turned around and brought suit against Kraken for other aspects of their securities violations that they're alleging with respect to cryptocurrencies. Sam? Okay. And I interrupted you. So do you want to continue about the Coinbase and Binance? Because you're saying that that wouldn't be a big deal. And in my opinion, I think, especially when it comes to anything other than Bitcoin, Ethereum, it could end up being a big deal for the rest. Well, you have to put it in the context of the let's let's put it in the context of the conversation. I don't think it's going to be a big deal for Bitcoin or Ethereum as protocols. But when it comes to the notion of centralized exchanges, and what they're able to do with US

customers, it is a big deal. This could be a devastating blow to the industry. If Coinbase because I think Binance has other issues. And and Binance has other problems when it comes to their footing in the United States. But Coinbase has clearly, in my humble opinion, done everything they can to be within the regulatory lines. And if they get a an adverse ruling in this case, well, that will definitely have an impact on the market from the perspective of centralized exchanges. But do I think that that will move the price of Bitcoin or Ethereum and the protocols themselves? I don't think so.

Now, all those ETFs, but then again, Mario, all those ETFs that have custodied with Coinbase will have to make another move. So I guess you would see a huge exit of Bitcoin out of the Coinbase wallets and into another exchange. And who knows who that would be if we lose Coinbase? Last night, the Valkyrie ETF issued a filing where they're moving their custody from Coinbase to BitGo. So this is already in motion. And I think that for the general health of the financialization of Bitcoin, that's a good thing that all of the coins aren't sitting at one institution. I believe up to this point, Fidelity was self-custodying, Gemini was custodying the Galaxy ETF, and everything else was being stayed at Coinbase.

But now this morning, Valkyrie is moving over to BitGo, right? So I think for the health of the network and not having all of the coins sitting at one location, they should be better distributed around. And I think that can offer a possible value additive service for people that are looking to allocate to a given ETF. I know people who only buy from the Fidelity ETF, because they trust that Fidelity has been working on digital assets for 10 years, and they have the custody infrastructure to actually be able to self custody, as opposed to delegating it all to Coinbase, which is a very serious risk. But do you think that even if that were to happen, do you think that if Coinbase did get an adverse ruling, and there was a bunch of Bitcoin leaving Coinbase from all these ETFs, would it be of a

grayscale level? Because it's not really the same thing that's happening there. I don't think it would impact the ETFs or the price of Bitcoin the same way. I guess the question is, where would it go? Exactly. What would be the option for the United States for a centralized exchange to self custody all this ETF Bitcoin? There's, there's actually a new option. Last night, a joint bill came out from Senator Lummis. It was bipartisan. I don't know who the Democrat senator was, but to have the SEC revisit staff accounting bulletin 121. And SAB 121 is the actual legal, it's the guidance right now that the SEC places on all banks to basically say that if they were to hold any crypto assets as a custodian, they need to hold that specifically and like recognize it on their balance sheet as an

asset. And because of that, it becomes way too disastrous for bank balance sheets and how the accounting works to keep that on file because they would have to be very basically, they need to treat it like fully dollar to dollar collateralized. And then, you know, it totally wrecks banks balance sheet. So if there was any movement on that Senate proposal going forward, you would actually be able to see traditional investors like your JP Morgans and your BNY Mellons, they could actually have a legal compliant framework to be able to hold this stuff. And then it wouldn't be going to the crypto infrastructure, it would be going to the traditional finance infrastructure.

Which is so funny, because how does that make it any different from what Coinbase is doing right now as a regulated entity to begin with? Why would there be that distinction between banks holding it and Coinbase holding it? I mean, it's a question. I think that's fundamentally a good question. I think this is just a new asset where the banks don't have as much infrastructure to be able to custody any of this stuff, right? Traditionally, I know BNY Mellon and a few others

have put some groundwork to being able to do it. Ultimately, you're just kind of pushing it from an adverse action to push it away from the new incumbent financial providers like a Coinbase to the traditional regulated financial institutions. Not sure if you can hear me, guys. Ron, we'll jump in. Oh, yeah. No, I completely agree that Coinbase custodying a bunch of crypto in one place is an issue. Specifically, in the case of an Ethereum ETF,

I can see how that can really develop into an issue quick with Coinbase having so much voting power. But I don't really see how the Coinbase case would have any implication in Coinbase custodying Bitcoin for these ETFs. I don't see Coinbase custody really come up in the case. Staking is not an issue. Bitcoin is not being called a security. So I don't really understand the argument that if Coinbase loses the case, we're going to see this outflow of Bitcoin from Coinbase from these ETF filers. To me, that doesn't seem like it's even really in the cards right now. Ron? Yeah, actually, one little update, at least on the staff account in 121 that happened late last night.

There was a response from the Fed and the OCC. These are obviously two big bank regulators. And the rule came from, obviously, the SEC. It affects both banks and crypto companies alike, as we highlighted here. It's actually one of the few issues in DC that the banks and crypto companies alike, as we highlighted here. It's actually one of the few issues in DC that the banks and crypto are actually lobbying in the same direction for once. But the main crux here, and I think this is actually SAB 121 could get actually something changed this year. And if there's anything, I think this is actually some pretty low-hanging

fruit. But the Biden administration regulators at the OCC and Fed pushed back actually on the SEC's rule saying that it was a departure from the norm. And I think this is going to be the start, including the legislation that got introduced by Senator Lummis and the two folks in the House yesterday. I think we're going to see some new updates on this. And candidly, I'm a little optimistic, especially now having the Biden administration, other regulators more backing the bill idea that this is a pretty large expansion here. So keep an eye on this. I think this is going to have a couple updates in the coming weeks. And we could see this actually legislatively solved by the end of the year. Dave? Yeah, I just want to echo that. Even thinking about Coinbase having an issue with their court case for the ETFs, you're talking about 2025 ends, 2026? Because the bad case is they, okay, they don't dismiss it. It goes to court. They lose. They appeal. You're talking years. Not only that, but even if the SEC were to win in both cases, there still would be large pressure for settlement, and most settlement

wouldn't be to kill. I can't even remember the last time since Arthur Anderson that there was a company whose business, complete business business was destroyed by a case against a government agency, meaning that, you know, yeah, they could be forced to delist tokens. Yeah, you know, that could happen, I guess. I think it's exceedingly unlikely for lots of reasons that we've talked about. But the notion that it would affect this, nah, I mean, it's just, this is kind of, this is fun of a ridiculous level, at least for the next couple of years. But the point in the Ethereum ETF is that's really that that was that someone was just getting at the notion that in a trust structure, you could vote at all is kind of difficult. And the whole notion of staking might is something the SEC is probably going to fight.

They won't be able to win, I don't think. I think there's virtually no chance that they could block an Ethereum ETF without staking. The question is, would people want it? Because unlike a Bitcoin ETF, the Ethereum ETF would then have dramatically lower performance than owning spot or hiring a professional asset manager

or someone to do it for you. I do talk about ETFs. I just want to give a shout out to Ryan, Matt, both from Bitwise joining us on stage. Bitwise has been very active in educating us all and just giving us updates on the ETF industry in general. And we've got Juan in the audience. I'm trying to convince him to come up as well. So we'll have three people from Bitwise on stage. It'll be incredible. So Matt, Ryan, just to have an update, you've got net flows. I think it's like 40 million or something today. GBTC outflows are down.

I think it's under 200 million now. And we've got the, obviously, great scale. There's still great volume across the board. And now great scale has got higher volumes than, sorry, BlackRock's got higher volume than grayscale. So I'd love a general update, Matt, and how that compares to your expectation. Yeah, sure. Absolutely. And I love this conversation around custody. You know, I would note on that fact, Coinbase Custody is an independently capitalized entity under New York State sort of trust charter status. And there are multiple custodians in the space, including standalone digital custodians like Anchorage that qualify as qualified custodians. So I think it's a well-established space that continues to grow. And there are lots of options. And you saw that from Valkyrie. And I think you'll see more of that. There are lots of things I worry about, but this actually isn't near the top of the list. From a Flows perspective, it's been remarkable to me.

You know, usually, and I come from an ETF background, usually when you have an ETF launch, you get two or three days of excitement and then things completely die off and it goes quiet for a while. And then it starts to grow many months or actually quarters, sometimes even years down the road. And the reason for that is once you get out of that initial burst of excitement, you have to do the hard yards of getting approval to sell the ETF at Morgan Stanley, at UBS, at Wells Fargo, and other national account platforms. And you have to do the hard yards of educating financial advisors who don't make split second retail style trading decisions, but evaluate things and then have conversations with clients. So you have this shape of high, low and then a steady rise, you know, almost like the pathway of technologies to adoption. And what we've had instead here is a burst of excitement

and then a really high plateau of continued inflows. And it's almost without precedent in the ETF industry. Now, I don't know how long that can continue, but it does suggest to me that there is real sustained demand and we're seeing a healthy rotation from GBTC to BlackRock and other leaders, including Bitwise from a volume perspective. And it makes me really excited about where this could go long-term.

I will say at Bitwise, just to add one more anecdote, and then my colleagues can add on, we increasingly see our core audience, which is financial professionals allocating in the space. In the first few days, we weren't sure exactly who was buying our product. Now we have a better feel because our sales team is in the field talking to advisors and they're telling us they're allocating and then we're seeing that in flows. So this exceeds my expectations.

I think we're on a sustained, strong path. And I think it's going to provide sort of slow and steady support for the market makes me really optimistic, you know, even even about prices in the coming months. Right. Yeah, I agree with Matt on a lot of that. I mean, it's really blown. It's blown me away how successful the launch these these ETFs have had. I mean, it's really blown me away how successful of a launch these ETFs have had. I mean, historically speaking, when you do look across ETF launches, collectively, these

have been some of the most successful that we've ever seen. And obviously, there's been a little bit of a, call it a rain cloud over the launch with the GBTC outflows. But really, I think that's a net positive for investors, people that have been locked up in the Grayscale fund or the FTX estate who needed to sell. Those are all overhangs to the industry that have been there for years. And so we're flushing that out of the system, which is a net net positive. And I think you do have to zoom out and think about what will these ETFs look like a year from now or two years from now. And I often join our sales

team who's going around and talking to advisors and these wire houses. They move slowly. I think that's one thing that a lot of people don't understand is just how slowly these institutions really move. They have due diligence teams and compliance teams that spend months and months and months reviewing different products, getting educated on crypto, learning about Bitcoin. Then they have to create educational materials

to educate their advisors so that they know what they're doing when it comes to Bitcoin. And then those advisors have to comprehend the information, learn about it, and they have to explain to their clients. There's such a knock-on effect that takes so long before they're finally ready to allocate. But what's really exciting is for those advisors and those money managers who have already gone through that journey that we've been working with for

one or two or three years, they're making big allocations to Bitcoin. We met with an advisor recently who allocates 10% of his client's assets to Bitcoin. So a lot of people talk about, oh, 1%, 2%, which is great. I think that's going to be the average. It's anywhere from 2% to 5% allocation to Bitcoin for a lot of these model portfolios. But there are money managers out there who are allocating 10% of client portfolios to Bitcoin. And as the base grows of advisors that are allocating to Bitcoin, that number could settle closer to 5%, perhaps. And that's just going to have a huge impact on the size of these ETFs that undoubtedly should drive demand for Bitcoin. Bitcoin as a commodity, its price is driven by supply and demand. And so to me,

the setup and the fundamentals are really great, especially that we've knocked out some of this overhang that we've had from past cycles and from not having this kind of regulatory clarity that we now have after the approval of these Bitcoin ETFs. So it's really exciting.

And I think we're in for a really interesting continuance of the CTF race and I'm really excited about where these things might go. Yeah, I like what Matt said, that this is very uncommon for an ETF to maintain that momentum. So it's already exceeded expectations in that sense. How would you interpret that, Ryan? Is that sentiment shifting just because the overhangs are no longer there? Or have, because based on Juan's report, a lot of people in TradFi, a lot of these fund managers didn't expect an ETF to be approved. And then when we spoke to others on stage,

and Dave was one of them, they were talking about how the process takes a long time. So how can we interpret that sustained momentum, which is apparently beating expectations? Yeah, I think it's a game of catch up. So there's momentum from those who are excited about a spot Bitcoin ETF and maybe weren't able to allocate because the platforms they worked through didn't have the products approved or their due diligence teams, compliance teams haven't gone through the process of approving it that I just talked about. And then now there's the advisors that are playing catch up.

I mean, you referenced the report that we put out in partnership with Medify that Juan worked on at the end of last year, the beginning of this year, where majority of advisors we surveyed did not expect to stop Bitcoin ETF to happen in 2024. These surveys were taken in the end of 2023. So November, December, when you had Valchunas and James Safar putting the odds at an ETF approval at 90%, yet majority of financial advisors were not expecting approval until 2025 or later. So it's that game of catch up that really has to happen. And I think that's what ultimately continues to build momentum into the future is that you have more and more of these money managers who manage trillions of dollars of wealth in America. You have them getting caught up on what Bitcoin is and now they can access it. What's the best way to access it? For a lot of these money managers, these ETFs are the best way to access Bitcoin because it removes the nuances of custody. It allows them to have really tight trading when it comes to trading volumes and when it comes to the spreads. And they're very low cost relative to maybe using another platform,

right? We're talking 20, 30, 40 basis points on AUM over an entire year. That's less expensive than gold ETFs, for example. And we know how many financial advisors love gold ETFs. And so it's just once they get caught up, now there's been so much excitement about it. Undoubtedly, they know about it. We saw some quotes from some large money managers last week. Cetera in particular, it's a large network of financial advisors. I think they have somewhere around 10,000 financial advisors. One of their due diligence team members was quoted saying that they're trying to get their arms around the space and try to look at all these different products and figure out what to do. And then once they

approve products on their platform, again, you have to go through this whole educational process. And so I just think this catch-up factor is going to play a big role in a lot of... I was going to ask it, and then I'll go to Juan afterwards. I want to compare what he's seeing now relative to the report that we were talking about prior to the ETF's launch.

But Ryan, last question I have for you is, how big of an impact do you think Coinbase and Binance cases will have on that sentiment and that interest do you think that that these fund managers care uh i think the coinbase one i think on the broader market sentiment i think they'll have a big deal i think coinbase will be an even larger deal than binance because binance has kind of been in this this um gray area for years now for a lot of people in this space where maybe something fishy was going on, maybe it wasn't. Now they've had this giant $4 billion settlement where CZ has stepped down.

I think for a lot of the Binance, call it FUD or Hangover is washed out. I think the Coinbase one will be a little bit more of a big deal. I don't know, honestly. There's not too many financial advisors. If they're not really aware of what Bitcoin is today or aren't paying that much close attention to Bitcoin, they're not even aware in a lot of circumstances that Coinbase is even in a lawsuit with the SEC and aren't paying attention to those results. And I think ultimately, that could be a positive ruling for Coinbase, which would be great for the space. And a lot of advocates of the space will be shouting from the rooftops about that ruling. But even if it's a settlement,

Coinbase is a huge company. They're very well capitalized. Banks pay settlements all the time and just continue to operate as is. And it doesn't really shy money managers and investors away from using these banks. And so I think ultimately, this will just be a bump in the road for Coinbase and will emerge with more regulatory clarity and perhaps a regulatory boost. And so net-net, I think it will be positive. And I don't think the Binance news is too much to worry about going forward. I want to talk to you about the question about your report and what you're seeing now. And afterwards, I want to go to Rob and Dave and anyone else just just on the market and mickle maybe you can jump in on this one

just on why the market is ignoring this good news like no one's talking about it like we are now and the market is not responding or as we hope it to respond now in the comments as well i'm actually curious how many people really be honest how much do you care about what we're talking about now when it comes to the etf numbers because if you don't care i'd be i'd be very surprised but i'd like to know as well and how big of an impact does it have on your decision on how to play the market? But Juan, before getting into the market, your thoughts on what Ryan and Matt have mentioned so far, and then give us an update on the report from a few weeks ago now that we talked about almost every day and how that could base what you're seeing now on the ground. Yeah, yeah, yeah. Adding on to what Matt and Ryan said, on the report, the statistic was that only

39% of advisors were expecting an ETF approval this year. So the majority not expecting, but there was a decent chunk there that were. And I think the nuance in understanding why we've continued to see flows that I think is worth mentioning is that there's different type of money managers and advisors. There's the ones that are totally independent. And then there's the ones like the LPLs of the world where they are part of a bigger network. And to get on that platform, that takes longer due diligence. And it takes the months that I had mentioned before to get approval on those platforms on the Morgan Stanley's of the world.

But there's independent RIs that are, you know, their own shop. And some of these manage, you know, 100 million, 200, up to 500 million, but they can make decisions more quickly and more on the fly. And so some of these advisors were part of that 39% cohort that were waiting for the ETF,

but that had started those due diligence talks and compliance processes ahead of an expectation of the approval. So now that the ETFs have been approved, they've been able to move quicker. So I think those are the flows that we're seeing from those early movers that have been able to adopt them quicker. But as Matt said, and as Ryan were saying, this is going to be a longer term game. And the bigger flows over time are going to be from the large platforms as they get approvals down the line. And would you agree that the sustained volumes that we're seeing, as Matt was talking about earlier, exceeded expectations?

And that's pretty rare to see the ETF performance as the Bitcoin ETF sell? Oh, absolutely. I mean, the ETFs now, the Bitcoin ETFs now rank in the top ETFs by volume and AUM since all the launches in 2023. And historically, they're up there as well. They've been a resounding success in terms of how much they've gathered. So two weeks in and not counting GPTC, these ETFs have gathered more than 7 billion in assets. That's incredible. Congratulations. And when you said top ETFs, top what? Top 10, top 20? Do you have a number? Yeah. I mean, I think, I believe IBIT, which has gathered the most assets, is in the top three of all launches. And then Fidelity, us, and ARK are within the top 15. Oh, wow. And if you look at all ETFs together,

excluding GBTC, how do numbers compare to other ETF launches? Not sure if you have those. Maybe Matt has a stat on how they've compared historically. I don't have it in front of me. I know they've done – it's really impressive historically on how they've done compared to others. I mean, if you exclude GBTC, they've blown away every other ETF launch ever. Oh, wow. exclude gbtc they've blown away every other etf launch ever oh wow i think i think the largest uh that i know of of native flows were the queues which is the one that tracks the nasdaq which

launched i think in 1999 it pulled in about five billion dollars in its first year on the market and excluding gbtc as of yesterday we were over seven on the new Bitcoin ETFs. So and that's after 14 days, right? They have another 200, whatever, 30 days to go. So, yeah, I mean, if you exclude GBTC, it's just off the charts. And I think there's a case for excluding GBTC because, you know, those shares have had to find new owners. That hasn't all been people rotating out of GBTC into these ETFs to lower costs. Some of it has been the FTX estate. Some of it has been hedge funds who played the premium ARB trade.

And so we really have found $7.1 billion of new buying of Bitcoin amongst these ETFs. It's measured that way by far and away the most successful ETF launch of all time in any country, full stop. And Dave, I've got that question for you, but first maybe Matt, Ryan, Juan, that last question is market's reaction. I don't know how to predict or even understand what the market does, but your thoughts on the market's performance based on the numbers you're talking about, because based on what you're saying, the ETFs exceeded expectations. The numbers, be it any other ETF, if you take out GBP, the market's obviously there's the post-ETF launch dump, makes sense, but then otherwise it's been sideways since. Yeah, I'll take a stab.

You know, we've been working off all the buildup. So the market ramped 56% from the time Balchunas and Bloomberg said it was a 90% chance of approval in January to launch day. So that was a lot of buildup. And we also had big buildup that you can see in things like the annualized basis on Bitcoin futures on Binance, which went to record levels ahead of the launch. You can see it in the put call ratios on Darabit. You can see it in other factors. And if you look at sort of that pre-positioning, I'd say we've worked off 80 or 90% of it. We're not all the way back to pre sort of ETF excitement levels on those things, but we've worked off the vast majority of it. So, you know, that leaves me optimistic. Yeah, I think it's reasonable to say that sort of a strong ETF

launch was priced in. And that's why prices are about where we were before the launch. But we have already worked off the majority of that pre-positioning. And as we finish that task and then move on to the new normal, which is this new persistent buying demand on Bitcoin, I think you're going to see that start to translate into positive prices. So if these flows sustain for a few more days or a few more weeks, I'm pretty optimistic about what that will mean from a price perspective. Dave? Yeah, yeah, Matt basically said a lot of what I was going to say. So let's just put a couple things. The first thing is, is, you know, when you see that rally, so the rally from 25 to 48, you know, we basically, you know, we talked about this on the show a few weeks ago, you know, technicians like to use Fibonacci numbers. I basically, we talked about this on the show a few weeks ago, technicians like to use Fibonacci numbers. I mean, honestly, I don't know if there's magic there, but it's very interesting

how it worked this time. The lower retracement was 42. The more normal retracement would have been somewhere between 38, I think 38.6 was the number. It doesn't really matter. Scott, you probably know this better than me because you follow this stuff. Absent the ETF, you would have, sorry, you know, absent the new flows, you would have expected the second one to be where we are hanging out. Instead, we're hanging out at the first one. And I don't think that's an accident. I think volatility in general has been dampened. In addition to the futures basis, and I actually think that the CME futures basis is more important than Binance futures. Binance perpetuals, you know, funding rates have been pretty low.

Yeah, I mean, you get some stuff. But the CMEs, it was a big deal. And we've lost a lot of open interest. And more importantly, the variance in that spread moved from over 100 to it's averaging between 15 and 20 during the day. And so what it means is there's a lot less speculation in the system and people are being more guarded in what's going on. So effectively, what you might have expected in Bitcoin because of its, you know, everyone says, oh, it's an anti-vol asset, expect this. I think this permanently decreases some of the volatility.

Does it get rid of it entirely? Of course not. Because at some point, we're going to reach equilibrium on the ETFs. And there will be, just like in any other market, something comes out, some news story, and people who bought it will panic and sell it. I mean, it will happen. Probably not from these levels and probably not right now. But lower volatility is extremely interesting. It doesn't mean you can't get gaps up. It doesn't mean you can't get falls, but it does mean that the daily squiggles are now different. It also means that people trying to do momentum ignition selling and that it's a slow, steady ramp is something that many of us have been talking about. It starts to get priced in. But is it priced in in the in the case of, you know, look, you know, without all due respect to Rand, if you ever looked at any of his thumbnails on crypto banter, I mean, no, it's not 100x in a day. Right. You know, this is, this is a different world,

you know, a different level of expectation from the investors. Juan? Yeah, those are great points from Dave. And I was just going to add that we put out, aside from the advisor report, we put out a quarterly report. The latest one was on Q4, and we put it out about a week or so ago. In that report, one of the charts we show is the historical volatility of Bitcoin. And if you look at it, it's been declining. Of course, Bitcoin is still very volatile, but it's been declining over time. And it's been our conjecture that as these ETFs come to market, for the reasons Dan was speaking about, that volatility will continue to be dampened. Of course, there'll be spikes here and there. But I think we've seen that

trend line of volatility for Bitcoin slowly decline over time. And I think it will continue to do so maybe at an even faster clip now that these ETFs are in the market, have so much trading volume, and continue to be big buyers and stabilizers of price more so than before, because there's more institutional players in the market now that are longer term oriented, as opposed to the retail driven market that was Bitcoin largely prior to these ETFs coming to market. I'll ask a question that everyone loves to hear. That question goes to the audience as well in the bottom right corner. And Mikko, I'll go to you first.

Other than the volume is kind of decreasing gradually, what do you expect to see? Obviously, you can comment on anything that was said so far, Mikko, but what do you expect to see in the market over the next month? Yeah, the thing I was really watching from the start is just the comparison to the first gold spot ETFs. And you can see the same exact thing there, right? There was an instant price action where gold just started ripping upward. But when you zoom out from the point in which they were approved, you can see the institutional flows coming in, the advisors advising people to get into the ETFs, the accessibility to make it easier to buy. And that made a long-term impact on gold. So in my book, it's playing out exactly how it did with the Gold Spot ETF.

I think the idea that this was instantly just going to skyrocket up when a lot of the advisors actually had to work with compliance teams, work with their customers to get them into the asset, that was unrealistic. So I think zooming out over the long term, this is going to have a huge impact on the market. And we're kind of seeing the same thing as what happened with the golden spot ETF. So in my book, everything's par for the course. And then next question, speculating over the next six or 12 months. I know you don't like speculating, but it's a good way to end the week. Yeah, I'll jump on. In my eyes, everything looks pretty good. I mean, for me, the biggest thing right now dominating most things is the macroeconomic environment. I'm probably in the minority here, but I do see inflation coming down towards the back half of the year. I see the Federal Reserve taking a win on the fact that, hey, jobs are still really good. The economy is booming. I don't think they want to blow that up. I think we're going to move towards the back half of this year, maybe early next year with the rate cuts. And I think all of that is going to be really good for just giving more certainty to the market and making big money feel more comfortable,

taking riskier bets. I think this crypto asset class is a risk on market for most big institutions. And I think for most big institutions to really feel comfortable investing in aggressive way, they're going to want to see lower interest rates. All of that seems to be playing out pretty well. And I think it's going to be good for the cryptocurrency market, as long as we keep getting the big court wins, and we keep seeing progress in the fundamental market. Rob? Yeah, I think just for the next 6-12 months, I would put it in the bucket as we have the coming up here, right? And in the past four years, we've had 6% of all Bitcoin supply come into the market. And now in the over the next four years, it's going

to be 3% of the total supply of Bitcoin, meaning we're going to get probably, you know, we're going to get 450 Bitcoin a day issued at $40,000. That's $18 million of like new inflow. I think that overall, as the ETFs are, you know, finding their are finding their legs and they're going to get better distribution within the market in general through individuals contributing and financial advisors helping allocate to this, just as the supply is being cut off, next six to 12 months, I'd say, is directionally very bullish for Bitcoin. Between now and the halving, we always have a halving, in that general area. So immediate short term, we may see maybe a slight tick downwards. But I think the long trend over the next year, we're seeing up into the right for Bitcoin. And can you play devil's advocate and give us a bearish narrative that we should keep in mind? Yeah, I guess like the major ones that are left out there, I'm thinking for me is the US marshals are selling $100 million of Bitcoin. That's kind of small, especially in

the scope now we're seeing with these daily inflows for the ETFs. The Mt. Gox claims have been still kicked around as just kind of people who've had Bitcoin for a very long time that are finally waiting to get access to those coins. And a lot of people sold their claims to Mt. Gox, right? So someone would buy it for 20, 30 cents on the dollar.

They're going to be able to, I think, make pretty strong recoveries. And that may just be like a downward selling pressure. There's also a case that just a bearish case would just be that, you know, everyone who wanted to get into the ETFs got into the ETFs. And now you're not going to have massive large inflows. It's not going to hit well in the general market. If we're in an election year, if basically homes are kind of getting hit and they're not feeling as flush with cash, they may not be putting extra money into something like buying Bitcoin, which is still a highly volatile asset. I think most consumers just in the United States in general would rather avoid the volatility. And, you know, that's just kind of been Bitcoin's general story.

So it could go the other way. I'm generally more directional believing that it's going to be good. Juan? I'm generally more directional believing that it's going to be good. Juan? Yeah, I think in terms of other things that could sway the market to the downside, there's still geopolitical events that are playing out in the Middle East that are precarious. So we have to keep an eye out for that. And we know that even though geopolitical can be over the medium and longer term a good thing for Bitcoin, when there's big geopolitical events that happen, all correlations go to one. And that could affect crypto as well. But I'm with most everyone that has spoken here in that I think the outlook is very constructive with the halving happening,

with these institutions onboarding and more onboarding as the year goes on, and also some of the crypto native developments that are happening in the ecosystem that are starting to take off. So I'm very constructive over the coming year. Last question I have for you, Juan. I'm a big fan of your reports. I always like to pick your brain. Any specific narratives that you're interested in right now when it comes to crypto outside of Bitcoin? Outside of Bitcoin?

Yeah, I think what is evolving in the D-PIN, which is a decentralized physical infrastructure, is really interesting. I think that we're starting to see that expand. It's gaining so much traction. We should do a whole space on this. I'll tell Ryan and Scott. In the audience, let us know if you'd like us to do a Deepin space, get a few experts in that. Because this one, other than gaming,

I think Deepin is something that intrigues a lot of us, and myself included. But go ahead, Juan. Sorry to interrupt. Yeah, no, not at all. I think, yeah, I think the, you know, the decentralized ecosystem moving into physical infrastructure, that's deep and that's really interesting.

And I think we should talk about it more. I also think that the tokenization of real world assets, that I think is the next narrative about institutional adoption. Institutions are onboarding Bitcoin now with ETFs, but many of those institutions are also looking at their portfolio of real assets, private equity, real estate, all of these very illiquid large assets that traditionally only high net worth individuals could access. And by putting them on the blockchain,

you democratize it to anyone. You put it on a rail that can trade 24-7, 365, and that has instant liquidity and can fractionalize the cost of accessing that asset class. So I think opening up those asset classes into the blockchain via tokenization is something that these big institutions have been piloting and that now that has been a couple of years of pilots and that the blockchains are scaling to levels where they can handle the volume. I think we're going to see that take off as well. And I think that's a really positive trend for adoption. I want to do this more often.

I'm going to wrap this space now, but I want to do this more often. Just getting all the speakers to put their D-Gen hat on and kind of wrap the space, at least at the end of the week, with a bit of D-Gen alpha. Rob, any final quick D-Gen words before we end the space? My D-Gen words are, you know, buy Bitcoin, stay humble, stack sacks. How boring can you be? Who says my D-Gen hat is buy Bitcoin?

You're not allowed to say that. You have to give us something other than Bitcoin. You're not allowed to say that. You have to give us something other than Bitcoin. You have to give us Solana. At least give us some ETH narrative or L2s. Something interesting that I'm sure intrigues you. Doesn't mean you deployed capital there. I personally only ever focus on Bitcoin. So I'd be focusing on people that are building layer twos on Bitcoin right now. There's a lot of emerging stuff in the ecosystem. I think there's going to be, there's a lot of investments being made on being able to do more advanced programmability on layer two Bitcoin. So I would say that the ecosystem, I think, is very underweight indexing on other applications and uses for Bitcoin as

those use cases emerge. So I think that's where kind of the far out risk curve horizon is, not that I've put anything in there myself. Is that me? Yeah, I think that it's impossible to have anything close to a degen hat without looking at the Jupiter launch yesterday. And while there is lots to talk about in terms of price action, insiders dumping, yada, yada, it can't be, you can't ignore the fact that Solana, after all the issues that it's had with uptime, handled the volume remarkably well. And so, you know, is, am I willing to declare victory for Solana that they showed that a fast blockchain can work and that we're past all the FTX level nonsense? No. But was it an incredibly good sign?

Yes. And are there a lot of people out there who are excited by it? Yes. Carlo? Yeah. Something to put on the radar is I'm curious to see if we do see a Bitcoin. Obviously, we have the Bitcoin ETF. If we see the ETH ETF, what will this do to centralized exchanges that make the bulk of

their fees off of trading on these two major assets, ETH and Bitcoin, if they become more of a custodian for ETFs as opposed to the primary trading platform for these assets? I understand, obviously, the ETFs are not trading to consumers directly, the ETH and Bitcoin, but will the consumer care if they can get lower fees on ETFs? How's that going to bite into Coinbase's revenues going forward in the next, let's say, 12, 15 months? Perfect question for you, Ryan. And then I know you put your hand up on the DGEN discussion. So maybe answer Carlos' question then. Maybe give us an update on your thoughts on the likelihood of getting ETF this year. And of course, the DGEN recap. And Danish, I'll see you in the audience. If you've got a couple of minutes,

give us a macro overview recap for the week would be good as a final quick word for the space, Ryan. Sounds good. Yeah, when it comes to the trading volume of centralized exchanges, I think I agree that the ETFs are just a lower cost option. A lot of people talk about the ETFs in a negative light, saying that they're bad for the ecosystem, especially a lot of maxis. But the reality is, is for people that are going to access Bitcoin on centralized exchanges already, it's a way lower cost option compared to centralized exchanges. One example of that is if you look and you trade on Coinbase,

you're getting charged around 2% fee on the trade that you make. And a lot of retail traders, maybe you're trading a thousand or less than a thousand dollars. And the fees don't really scale until you start to get up above that level for Coinbase or unless you're an institutional trader. And so absolutely, would it hurt Coinbase's revenue on one side? Yes. Would it be better for the trader, for the retail investor to allocate

ETFs instead of trading on centralized exchanges? Also, yes. And so I think that's an interesting dynamic that'll play out. Obviously, with Coinbase, for example, they're the custodian for nine of these ETFs, maybe going to be eight after Valkyrie switches over to BitGo, which was talked about earlier. But that custodial revenue will help offset some of that trading volume revenue. And so I think net-net, though, if we are entering a bull market, which to pivot to the, to the, uh, you didn't happen in a minute. I think that we, we are in a bull market. New users generally come in to the ecosystem using centralized exchanges. That's why you see Coinbase have such a crazy spike in 2021. Uh, and in the first part of 2022 and they're in their monthly transacting users numbers and

verified users numbers and their stock trading volume and, and then in their revenue. And so I think centralized exchanges, uh, particularly Coinbase particularly Coinbase and maybe Kraken and those in the U.S. will do just fine. And I'm bullish on those businesses. I think Wall Street completely misunderstands those business models going forward. And that's a really interesting opportunity in and of itself when we talk about what areas are we interested in. Real quick to

touch on the Ethereum ETFs. I'm kind of on the 50-50 side of things. Like Derek Gensler's had some very specific comments around how spot Bitcoin ETFs, in his view, were a very siloed decision and how Ethereum ETFs or other spot crypto ETFs are a completely different beast. And I do believe that that's how they're going to approach these things. There was a ruling with Grayscale versus the SEC last year that really put the SEC up against the wall in what they could do in approving these spot Bitcoin ETFs. The U.S. courts ruled against their rejection of ETFs

based on the grounds they had rejected them previously. Now, they likely, I would assume, would not reject Ethereum on the same basis. If you look at the market structure of Ethereum from a futures perspective and a volume and open interest perspective, it looks a lot like Bitcoin did earlier in Bitcoin's lifecycle. Of course, Ethereum is a few years younger than Bitcoin, so that makes sense. But I also think that we could see some rejections the first time around, similar to what happened with Bitcoin ETFs. Those were rejected a handful of times before they were ultimately approved. And going into an election year, we could really see the delaying continue to happen.

I think the first decision has to be made in May. I would guess that those are going to get rejected, but that's just kind of my personal speculation on that. And I do think eventually we'll have them. But to have them so soon after Bitcoin ETF to me is relatively low probability. And Danish, I appreciate you jumping in last minute. You do the finance spaces every morning, Monday to Friday about 8am. We do it together. So maybe give us a recap on the week and maybe any other thoughts on what you've heard so far. So this week, by the way, sorry if my audio is bad, I'm in a car. But I was going to say this week is the week of jobs. This week is the narrative violation week. Jobs are stronger than anyone expected.

It's not the government, private payrolls, completely shocked the markets today, if people are watching it. Today's data literally essentially solidifies that there will be no rate cuts, definitely in March, but probably for the first half of the year. My prediction will remain that we will have no rate cuts this year. Inflation is still the bigger problem. Forget recession. Forget black swan events.

Inflation is the bigger problem right now. Just to give you guys context for people that don't know the job numbers in today. Non-farm payrolls today came in at 353,000. The forecast was 185,000. And by the way, private payrolls led the way with 317,000 as compared to a forecast of 170. This is not a drill. This is real. And what this means is that, and by the way, I'm sorry, I did not mention this, but it's also important. Wages rose higher than expected at 0.6% versus 0.3% month over month. Guys, as wages goes up, CPI follows, inflation is coming, and it's going to continue to come. And we are back again for people that have been worried that inflation is going to re accelerate this for this kind of follows that thesis. So I'm not convinced

there's going to be a giant bull market. Because the bull market is based completely on the premise that there's going to be rate cuts and no rate cuts are coming. I mean, it's a great way to end it. Appreciate it. Danish for anyone in the audience, let us know in the right bottom right corner what your thoughts are on the markets I'm going to go through the

getting a lot of compliments there Danish I think getting you whenever you can give us a quick recap for the week every Friday would be good because I think the audience really appreciates it

so let us know in the comments if you want Danish to come in give us a macro recap now if you want us to do the D-Gen section every few days getting all our speakers, especially our Bitcoin,

our Bitcoin OGs is going to give us some D-Gen, D-Gen alpha. But otherwise, I appreciate you all joining. I think it was a great space. Enjoy your weekend, everyone.

And we'll see you again on Monday. Thanks a lot, everyone. Thanks, Danish.