How ETFs are reshaping the crypto markets

2024 has proved to be a breakout year For the cryptocurrency sector in January We saw the launch of Bitcoin spot ETFs In the United States and 6 months later We're on the cusp of ethereum spot ETFs Hitting the markets coin Telegraph Caught up with a number of individuals Directly involved in the launch of these Investment products to find out where We're at 6 months later that rebirth was Wild and I was like holy moly I thought They would be explosively popular I Don't think anyone anticipated quite how Much demand they were be [Music] The first couple days I think were on on My prediction they had a nice Splash a Lot of times when a new product comes Out especially after one that's been Hyped up there's a big first Splash Day First Splash week this was on par with What I thought it's funny because right Before the launch we had published a Research note from my Galaxy research Team Alex Thor and all of them they had Basically calculated what the Expectation would be for flows and I Believe their estimates for that first Year was about $4 billion and we're Basically already surpassed that within The last month we're at 15 billion uh we Still got half a year left at this point Then it died down a little and then in About 3 weeks after it started to go up

It had this like rebirth I called the Second wind that's weird usually you Have the splash you come down and then Maybe like down the road something Happens and you get life but it only Took like a couple weeks to get that Rebirth that rebirth was wild they they Were taking in like a billion net over Gbtc outflows so that's when the assets Got to 60 billion in no time and I was Like holy moly so fast forward to where We are now they've taken in $15 billion Net that's the magic number because it's X gbtc 15 billion net is the top end of My prediction for the first year so in Half a year they are at the top of my Range so unless there's a massive sell Off and people take their money out Which I don't think will happen sell off Happens a little some people will take Their money out but not everybody we're Probably going to see way more than 15 Billion by the end of the year I could See that this is not actually just about The US market it's about the fact that Once you remove this major risk of like What is the US regulator going to do About Bitcoin it changes what the like Risk return profile of the asset is and So it unblocked a lot of people's Thinking around this and started making This this asset and making Bitcoin feel More compatible with um existing Infrastructure and I think that's been

Really really positive capital inflows Into Bitcoin spot ETFs in the United States strongly suggest that retail Investors have a tremendous appetite for Exposure to this asset class but before The SEC approved these investment Products investment advisors could not Offer their clients any products Directly tied to physically held Bitcoin This has fundamentally changed and now Investors who otherwise wouldn't invest In Bitcoin have a means to dip their Toes into an asset that boasts unrivaled Price appreci Bitcoin to me seems like gold is a Teenager second amount of money ethereum Is more like a tech stock if this is a Portfolio yes people have all this space Here with like lowcost index funds for Vanguard stocks bonds but they have a Little slice for hot sauce they want to Have fun they don't want to miss the Boat on stuff they want to Pure future Fomo to me crypto is going to fit great In here cuz it is it is volatile but the Good news is you can stomach your Volatility if it's a small portion of Portfolios so to me ETF and Bitcoin Share a lot in that disruptive uh Disintermediation spirit but the ETFs Clearly are going to do a lot of work Simply because they are liquid cheap Convenient um you know if you put a um I Remember when the Beatles went on iTunes

You know uh their record cells went up Well they it's not like they made new Records They just got put on iTunes so I Think there's a similar case here I Actually think that question is posed in The wrong structure because it's not About who buys it it's why I think There's two things people really Undervalue one is inheritance planning It's really hard to inherit physical Crypto it is extremely painful we are Not set up for it and if you get hit by A bus that's not going to go well if you Have children or dependents that it's Very difficult to recover if not Impossible if you haven't already Planned for this um and it's difficult From a like tax reporting and compliance Perspective and it also can't be held in Most at least in the US most types of Retirement accounts Securities can and So it both addresses different pools of Money and different problems and by the Way I am never going to be the Platinum Plates in your backyard person I would Rather have an ETF than that because I Think for me from a long-term Perspective an ETF is actually going to Be more secure and easier to transfer Over time um especially if I want to Hold a position for 30 years I think the Stuff I keep in hot wallets is what I Use to have fun and play with Applications and if it gets hacked it

Doesn't it's not going to do anything Right whether you have the older Generation the baby boomer so to speak And others participate in this space They probably don't want to go through The hasso of a wallet and so I think the ETFs the Bitcoin ETFs specifically have Created a fairly similar experience to Owning spot Bitcoin you know you're You're participating in in in the uh in The gains there and really sort of that That Network effect of that broader Participation of Bitcoin and and Certainly you have your group that never Wants to sell your Maxis and that Basically puts a floor in bitco ETFs Have been trading for 6 months and a Newcomer is soon to join the market Ethereum spot ETFs have been given Provisional clearance and a number of Asset managers are expected to launch Their products in weeks not months There's also a political element to Consider as the United States Presidential elections Edge closer There's not a lot we could say just Because we're in registration with Invesco for an ethereum ETF ourselves But the one thing I mean it really does Seem apparent that there's been a shift On this I mean one day um I don't think Anybody was really talking about an Etherum ETF and you just see suddenly in The news that everybody's getting their

19 b4s approved that's really exciting And it's hard not to notice that that's All coinciding with some of the shifts That's happening in Congress so you had The vote on Sab 121 overturning the Accounting rule even though that was Veto for Biden you had nine Democrats Come along and vote for that which was Amazing and then I think even more so With F21 the following week having 71 Democrats join Republicans to vote for That which basically creates a a a Market infrastructure around Cryptocurrencies um was just a huge show Of support and so all that coinciding All I could say what a great coincidence But one that you know we're certainly Happy about we're going to work through That process with the SEC with our Partners at Invesco as it relates to Ethereum ETF and uh you know if and when The SEC does approve the the Prospectuses you know we'll be ready to Trade ethereum ETFs are now a question Of when and not if what remains to be Seen is how these products will perform In relation to the record-breaking Performance of Bitcoin spot ETFs so in My opinion that hot sauce bucket if You're a normal person and I know this Because I live in the 6040 World Bitcoin is like enough crypto hot Sauce you're like you know I'm good These things move together anyway I

Don't understand the ethereum network It's a little more complicated Bitcoin Is quote digital gold I got it ethereum Is like harder to explain in short now Matt Matt seagull from vanc just made The case on her panel that It can be pitched like a stock it Actually produces so there's cash flow And you might and it's like an app store And and there's I think they'll get There so I but I just see it being a Sidekick I think as an industry um we Are now taking the most successful Launch in ETFs ever and using that as The Benchmark for success I think the Idea that that is the standard is not Realistic I think it will be a Successful ETF launch I think it do Significantly better than the average ETF I think it will probably do in the Top desile of ETF launches ever I think People need to like seriously moderate What they think normal for an ETF launch Is as part of this discussion but I do Think they will be very successful I Don't think they'll be as successful as Bitcoin ethereum I think is going to be A little bit different you've seen with Some of the issuers take out any Language about staking and so staking is A big part of this the the ethereum Ecosystem and to be giving up that yield I think for the investors that have the Wherewithal they might consider do I

Want an ethereum ETF do I really want to Participate in the stakings you just Might say I want access I don't really Care maybe about the staking Parts I Don't really fully understand that yet But let me try this and like I said with The Bitcoin ETF maybe it's an invitation To understand more about the ethereum Ecosystem in that case [Music] [Music] N


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