đšBTC ETFs Exposed: Real Impact You Need to Know! đ„đ
Summary
TLDRIn this video, the host delves into the eight-month impact of Bitcoin ETFs on the cryptocurrency's price, exploring their correlation and influence. With a detailed analysis of ETF flows and price changes, the host reveals a significant decrease in correlation from 67% to 14.2%. They discuss the substantial inflows into ETFs, averaging $103.3 million daily, and how macro events have affected Bitcoin's value. The host also touches on the role of Black Rock and other market players, providing mathematical insights into the ETFs' impact on Bitcoin's price and future predictions.
Takeaways
- đ The speaker is analyzing the impact of Bitcoin ETFs on Bitcoin's price, noting a decrease in correlation from 6-7% initially to 14.2% recently.
- đ The script discusses the flow of money into ETFs and how it correlates with Bitcoin's price movements, highlighting periods of inflow and outflow.
- đč The speaker mentions that macro events, such as Germany selling Bitcoin, have a significant impact on Bitcoin's price, independent of ETF flows.
- đą Detailed statistics are provided, including the total net inflow into ETFs, the average daily inflow, and the worst and best days for inflows and outflows.
- đ The script includes a discussion on the 'eye multiplier' and how it relates to the impact of ETF inflows on Bitcoin's price, suggesting a current multiplier of 15.3.
- đ The speaker acknowledges other significant players in the Bitcoin market, such as Michael Saylor and Black Rock, and their influence on Bitcoin's price.
- đ The script highlights a recent dip in ETF flows and its potential impact on Bitcoin's price, with nearly $600 million flowing out in a single day.
- đ The speaker provides a detailed analysis of the fear and greed index, short-term holder unrealized losses, and potential for heightened volatility in the market.
- đ° News updates are shared, including Japan's decision to lower the tax rate on cryptocurrency gains and a pro-Bitcoin candidate's political victory.
- đĄ The script concludes with a call to action for viewers to understand their investment profiles and blind spots, promoting a free investor profiler tool.
Q & A
What is the main topic of the video script?
-The main topic of the video script is an analysis of the impact of Bitcoin ETFs on the price of Bitcoin, including the correlation between ETF flows and price changes, and the current state of Bitcoin ETFs eight months after their inception.
What was the initial correlation between Bitcoin ETF flows and price changes?
-At the very beginning, the correlation between Bitcoin ETF flows and price changes was quite high, about 6-7%.
How has the correlation between ETF flows and Bitcoin price changed over time?
-The correlation has decreased over time. It was initially around 67%, but as of the last 30 to 50 days, it has fallen to only 14.2%.
What is the significance of the 'eye multiplier' mentioned in the script?
-The 'eye multiplier' is a term used by the speaker to describe a personal model for calculating the impact of ETF flows on Bitcoin's price, which has been influenced by events such as the Tesla Bitcoin purchase.
What is the current average daily net flow into Bitcoin ETFs?
-The current average daily net flow into Bitcoin ETFs is $103.3 million.
How much has the Bitcoin market cap increased since the inception of the ETFs?
-The Bitcoin market cap has increased by $256 billion since the inception of the ETFs.
What is the speaker's opinion on the future of Bitcoin ETFs in terms of holding Bitcoin?
-The speaker believes that Bitcoin ETFs will continue to grow in their holdings and expects them to hold around 1.15% of the total Bitcoin supply in the near future.
What is the 'Bitcoin black hole' mentioned in the script?
-The 'Bitcoin black hole' refers to a significant outflow of funds from Bitcoin ETFs, which in the context of the script, is a concerning development as it could impact the price of Bitcoin.
What is the significance of the 5Gs mentioned in the script?
-The 5Gs refer to significant sell-offs or events that have interrupted the correlation between ETF flows and Bitcoin price, such as large institutional sales.
What is the 'investor profiler' mentioned in the script?
-The 'investor profiler' is a tool launched by the speaker that allows users to discover their investment personality, strengths, weaknesses, and blind spots, inspired by Ray Dalio's emphasis on knowing one's blind spots in investing.
What is the current sentiment of the Bitcoin market according to the script?
-The current sentiment of the Bitcoin market is described as nervous and apprehensive, with the fear and greed index at 27, indicating a cautious market stance.
Outlines
đ Bitcoin ETF Impact Analysis
The speaker begins by expressing excitement for analyzing the impact of Bitcoin ETFs eight months post-launch. They question how correlated the ETF flows are to Bitcoin's price and recall an initial correlation of about 6-7%. The speaker intends to explore current correlations, other factors affecting Bitcoin's price, and the role of ETFs in the market. The analysis includes a look at historical data, including inflows and outflows from ETFs and their relation to Bitcoin's price movements. The speaker also reflects on macro events that have influenced Bitcoin's price, such as sales by significant holders and market manipulations.
đč Detailed ETF Flow and Bitcoin Price Correlation
In this section, the speaker delves into the correlation between ETF flows and Bitcoin's price, noting a decrease in correlation over time. They present data showing that while initially 67% of price movements could be explained by ETF flows, this has dropped to 14.2%. The speaker discusses the significance of this change and its implications for market dynamics. They also touch on the role of long-term holders and institutional investors like Grayscale and BlackRock in shaping the market. The analysis includes a mathematical model to estimate the impact of ETF flows on Bitcoin's price, revealing that the current multiplier effect is 15.3, down from an earlier 21.
đ Concerns Over ETF Outflows and Market Sentiment
The speaker expresses concern over recent outflows from Bitcoin ETFs, particularly a significant outflow of nearly $600 million, and its potential impact on Bitcoin's price. They analyze the cumulative money flow and note a downward trend, which they attribute to factors like summer doldrums and macroeconomic uncertainty. Despite this, the speaker remains optimistic about future market performance, especially with the potential for increased money printing and rate cuts. The speaker also discusses the Bitcoin ETF's current holdings, which represent a significant portion of Bitcoin's supply, and the sentiment among Bitcoin maximalists regarding ETFs' influence on the market.
đ Global Developments and Bitcoin Market Outlook
In the final paragraph, the speaker covers various global developments affecting Bitcoin, including a significant tax policy change in Japan that reduces the tax rate on cryptocurrency gains. They also mention a political development in Massachusetts where a pro-Bitcoin candidate is set to challenge anti-crypto legislation, marking a historic moment for the cryptocurrency community. The speaker concludes with a brief discussion on the state of Bitcoin mining, noting the challenges faced by miners but also highlighting the resilience and efficiency of leading mining companies. The segment ends with a call to action for viewers to engage with the presented information and a summary of key points discussed throughout the video.
Mindmap
Keywords
đĄBitcoin ETF
đĄCorrelation
đĄETF Flows
đĄMarket Manipulation
đĄMacro Factors
đĄMultiplier Effect
đĄLong-term Holders
đĄFear and Greed Index
đĄBitcoin Miners
đĄTax Policy
Highlights
Eight months of Bitcoin ETF analysis reveals their impact on Bitcoin's price.
Initial high correlation between ETF flows and Bitcoin price has decreased over time.
Macro events like Germany selling Bitcoin have a significant impact on price, independent of ETF flows.
ETF flows once explained 67% of Bitcoin price movements, now only 14.2%.
Long-term holders, institutional sales, and government actions have interrupted the ETF-Bitcoin price correlation.
Despite market fluctuations, ETFs have seen a net inflow of $6.73 billion.
The 'eye multiplier' theory suggests ETFs have lifted Bitcoin's price over $144,000.
A 21x multiplier from Tesla's Bitcoin purchase is used to predict market cap increases.
Black Rock's $2.8 billion purchase offset significant outflows, preventing a market downturn.
Bitcoin ETFs hold 4.7% of Bitcoin's supply, a figure that could reach 5% in the near future.
ETF outflows have been significant, with nearly $600 millionæ”ćș in a single day.
Fear and Greed index remains low, suggesting a potential buying opportunity.
Short-term holder unrealized losses are elevated, indicating potential selling pressure.
Bitcoin is still in a bull market, with the current drawdown being typical for such cycles.
Japan's tax policy shift to reduce the maximum tax rate on crypto gains to 20% from 55%.
A pro-Bitcoin candidate, John Deon, is set to challenge anti-crypto sentiments in Massachusetts elections.
Bitcoin mining industry faces challenges, but some miners like Clean Spark are showing resilience.
Transcripts
hey we're going a little bit early because I'm excited and I'm early and I want to get this Â
one out this is a very special analysis we are eight months in to these Bitcoin ETF thingies Â
and the question I ask myself is what impact have they had on the price how correlated are flows to Â
the price at the very beginning they were very correlated to the tune of about 6 7% I wonder Â
what that is now and what else is affecting the Bitcoin price where are we and who do we depend Â
on let's jump into the trends and again this will be a a little bit of deep analysis but Â
it's fun I'll make it fun I promise and thank you to the mod chat let's go not Financial advice and Â
shout out to moto 89 I've been watching you in the comments for ages on YouTube thank you for Â
joining patreon and I remember every name and I watch every name Nick M good see you up there in Â
Canada now this I shared this exactly a month ago on this Bitcoin daily video it's too funny waking Â
up to $58,000 bitcoin for the hundredth time and I understand shout out to Big Ed that's his name Â
apparently um yeah I understand it's frustrating but it's also funny and yesterday we had a wick Â
from hell bitcoin's up 1,600 bucks from the bottom yesterday it fell to like 565 if I'm not Â
mistaken and uh bounc right back up so here we are let's get into the money flow analysis I do this Â
crunches a lot of numbers but I do it once every I think it's every three months or so but I think Â
it's interesting so here we go I chart number one this is the ETF flow and the t+1 price change Â
in percentage terms the numbers are in millions of dollars so the blue lines are all the inflow Â
of the ETF since Inception the red lines are the percentage changes in price and what's Â
really interesting about this is sometimes we had some really interesting dips both outflows Â
out of ETFs and very little impact on price sometimes you had big inflows into ETFs and Â
very little impact on price and then sometimes we had events like Germany selling scared the crap Â
out of Bitcoin holders and we had the monster carry trade reversal that Wicked us right down Â
again there are things that happen on the macro side of the world that do impact bitcoin price and Â
the question is how much do the ETF flows impact it and we'll jump into that another thing that Â
I'm always very interested is the correlation of how much the actual Bitcoin move is driven by the Â
ETFs and here basically it's a scatter chart of every single correlation of every single event Â
and again at the beginning the correlation was much higher so if money went into the Â
ETF price went up but as of the last 30 to 50 days that's Fallen a lot I think it was about Â
67 at the beginning and what's interesting now too is you can see in the bottom left quadrant Â
43 times the actual inflows have been positive and the price of Bitcoin has gone negative and Â
14.2% of the price action can be explained by the ETF flows again it used to be 67% now it's only Â
14.2% something has changed long-term holders sold Germany sold Genesis sold grayscale sold the 5gs Â
as I call them US government moved some around then we had Mount gaau that has all interrupted Â
this correlation but the impact of the ETFs is staggeringly large let's talk about them for a Â
second 8 months in these are the statistics 6.73 4 billion has float in net to these ETFs that's Â
an average of $103.3 million a day the worst day we had was minus 563 million out the biggest day Â
in 1.45 billion and we have 162 days in the bag everybody and that's where we are now what I want Â
to do is try to figure out okay mathematically cuz I been talking about my eye multiplier for Â
years how does that correspond to this so first of all total inflow is 103.3 million time 162 days is
16.73% but anyway let's just call it $14,000 as the price change the impact uh of by the way it's Â
interesting because 42k before the Bitcoin ETFs was my having price Target that's how precise Â
that was didn't take into account the ETFs the ETFs technically as far as I'm concerned and my Â
models are concerned have lifted the price over $144,000 so that's the 0.142 multipli by the 16. Â
734 billion is about 2376 billion impact but let's get into my multiplier this is the interesting Â
part uh you've you know since 2021 I've been talking about my 21x multiplier which I backed Â
into from the Tesla Bitcoin purchase the impact of A1 and a half billion doll spend by the way Â
Michael sailor someone now is issuing stock to buy two billion in Bitcoin I it's a great time Â
to buy and I know he's chomping at the bit right now we'll talk about that in a minute Â
minute too but the ETF multiplier Bitcoin market cap January 11th $884 billion Bitcoin market cap Â
now September 4th 1.14 billion it's probably 1.42 billion at this stage because the price Â
has just gone up and the increase in Market Gap is 256 billion so if you take the market Â
cap increase divided by the ETF inflow you get a multiplier on the market cap of 15.3 Â
H it's not 21 but remember we're just talking about the ETFs let's look at the I multiplier Â
of the price if we assumed 21 the price of Bitcoin should technically be at 664286589
not anybody else who's buying not the Michael Sailors not the tethers not the Mr 100s just Â
these if you plug in the 15.3 multiplier from the ETF money flow of .73 4 billion we get a Â
price based on 15.3 of 59,6 which is basically 900 bucks away from where we are right now so Â
that is the money flow for the ETFs so now we know if Larry Fink comes in and buys a billion dollars Â
or if the money flow is X percentage per month or per week or per year we have a pretty good Â
handle on the impact on bitcoin price but again we've been through the 5gs if those 5gs didn't Â
happen the price would be a lot higher and that is the math and we'll continue to monitor this Â
as we go forward and shout out to ecoin metric 2o they mapped out a your model and basically Â
the conclusion is net positive ETF inflows are good for bitcoin price and since the ETF launch Â
we've observed a positive correlation between the Bitcoin monthly returns and the net flows Â
for the ETFs over the same period roughly the the painting with a very broad brush here for every Â
10,000 Bitcoin captured by the ETFs it boosts the Bitcoin price by about 4% so think 10,000 Â
Bitcoin 4% increase in price but let's talk about something else kind of stunning as well if it was Â
not for Black Rock these puppies would be red the numbers that I calculate every single day for 163 Â
days now gray scale Bitcoin trust and their mini Bitcoin trust have bled $19.56 billion okay if it Â
wasn't for Black Rock buying $2.8 billion we would would be red that means Fidelity uh bitwise Arc Â
Etc were not big enough to absorb the dumpage From grayscale Grace Kell has been a horrible Â
skunk horrible bleedout but thank goodness for our friend the fster thank you Larry Fink because Â
again it would have been garbage terrible disaster if it wasn't for Black Rock buying so much and of Â
course it's not people say when I say black rock buying so much it's the people that black rock Â
represent the high netw worth individuals the Pension funds Etc they're the ones buying this Â
stuff so anyway that's the story and remember as well we've only had one negative month on the Â
ETFs and that was April April sucked 674 Bitcoin out shout out to hle 15 capital and August was Â
slightly positive about a th000 in but still I do expect things to get a little bit better into Â
the rest of the year so that is the money flow anal is so it's not 21 it's 15.3 just for the Â
nine ETFs and that doesn't take into account the money flow from other players so we'll update it Â
and hopefully we don't have another 5gs coming our way that will dump their bags on the market Â
on the price because that does have an impact I want to introduce this to uh we launched this Â
two days ago over 5,000 people have completed it it's a free investor profiler nothing like this Â
has ever been done before in the history history of the world and I was inspired to build this out Â
years and years ago by a guy called Ray doio because he said it's most important thing in Â
investing is know your blind spots so this is the IIA investor profiler took us three and a Â
half years to build this it took me 25 30 years of thinking about it and you can discover your Â
personality who you match up against Legends like Buffett or Lynch or others Kathy Wood and your Â
strengths your weaknesses and your blind spots so again enjoy it it's very very important to Â
know what you're good at and what you're not good at and then Shore up those weaknesses let's get Â
into the Bitcoin black hole before we get into the news and the charts it's a big one today because Â
a lot to cover first of all um forget forget that piece but Bitcoin ETFs are losing steam day 162 I Â
added a big red line here to show you the big dip we had five nasty nasty red Days running Â
into the end of August and early September so far yesterday alarmed me a bit when I saw that nearly Â
600 million was flowing out of the EAS ETFs and I was worried it would have an impact on Â
price and it did Bitcoin dipped but I don't know if it's because of Market maker manipulation to Â
pump to feed the bags but 5,000 Bitcoin hit the market yesterday out of the ETFs and that is the Â
I think the fifth or sixth biggest dump ever since Inception most importantly if you look at these Â
two charts the red line is the cumulative money flow it's going down that is not good we have Â
Cycles when it goes up and down but really it's looks like they're losing steam right now and that Â
part of that might be because of the August the summer doldrums Etc nervousness about the macro Â
but once rates get cut once money printing happens we should be getting into stronger months as we Â
go forward I do believe and the five nasty days nearly $800 million left the system system in just Â
5 days which is kind of scary but anyway those things are volatile and you can see here uh you Â
don't need that one most importantly though the Bitcoin ETF still hold 928 th000 Bitcoin which is Â
4.7% of supply and we should have a little party when they hit a million Bitcoin or not because Â
the Bitcoin Maxis don't like the ETS having so much power and remember I always maintain they'll Â
never be more than 15 million Bitcoin so if they do hit 1 million Bitcoin which I believe they will Â
probably in the next month or so that means the ETS will hold 115th of the supply Bitcoin any Â
playlist will be here let's get into some of the charts as well first chart is fear and greed is Â
still at 27 people are nervous 25 is a nice place to buy I think we if if this was reflecting the Â
attitude last night it would have gone down to like 20 because it was pretty scary and let's Â
talk about the bull market Corrections and where we are in terms of draw Downs on average Bitcoin Â
investors a holding relatively small unrealized losses compared to Prior Cycles which is favorable Â
overall however short-term holder unrealized losses are a little bit elevated indicating they Â
are the primary cohort at risk when people are under water they're more likely to sell because Â
they can't take the pain and you can see profit and loss taking activities remain remarkably light Â
but the critical metrics such as cells side ratio allude to a potential for heightened volatility Â
near term the draw down there you see right now we're at about down 22.8% off the highs we did hit Â
as high as over 30 33% I think with that carry trade reversal and the downward pressure has Â
increased a little bit but again price action has been stagnant investor sentiment is apathetic over Â
the last 6 months however there are some things where everything is changing we've gone through Â
a lot of storms um the accumulation is still there from the ETFs and Retail will probably Â
come back but they don't really have that much money compared to 2020 2021 so we'll see where Â
we go from here but this draw down is typical and this is forgot to mention a bull market correction Â
draw down we are still in the bull market a lot of people think it's over we're in the Â
barrel already it's like no no it's still halfway through now let's get into some bitcoin news shout Â
out to Michael sailor he reminds us we are all on team Bitcoin he posted this today I thought Â
it was very cute and no violation of McDonald's trademarks there at all and Japan this going to Â
be a little tiny little Tailwind Japan will drop the maximum tax rate on bitcoin and crypto gains Â
from 55% to 20% and this is a significant change in Japan's tax policy regarding cryptocurrencies Â
currently Japan's cryptocurrency profits as miscellaneous income with rates up to 55% for Â
high and a worth people I think it's people who earn more than 200,000 Japanese Yen from crypto Â
activities what's that knock off twoos $2,000 is not very much anyway that's a little bit of good Â
news there another good news too um we have some a little the reason we talk politics is because Â
it does impact the Bitcoin price so go John Deon Pro Bitcoin candidate set to challenge the anti- Â
crypto Army in the state of Massachusetts shout out to anybody there in Massachusetts if you're Â
watching me you probably like Bitcoin therefore you probably like from Bitcoin magazine here Â
the pro Bitcoin candidate John Deon he did win as primary so he is now representing one side against Â
the other side in the first ever Bitcoin election this is a historic moment ladies and gentlemen Â
be exciting to see what happens fingers crossed fingers crossed and caner maintains I know Bitcoin Â
miners it's been a blood bath I know I know I know but big cander Fitzgerald I know they're Â
Bitcoin Bulls but they still have a $23 Target on clean spark um and that's a 2.64 x from where Â
it is now so pretty impressive now I don't have all the mining data in yet but they're petering Â
in three of the four three of four of the top miners have already reported their production Â
for the month of August uh expected to go down a fraction for all of them because the hash rate has Â
gone up we hit an all-time high yesterday uh clean spark hit 478 monthly production and uh their hash Â
is up to 22.6 X aash and their efficiency is 22.7 Jews per terahash so they are lean and mean and Â
they've produced 4,600 Bitcoin so far this year and they hold over 75,000 Bitcoin which is big Â
in fact when you break down the amount of huddle that they have the actual value of their Rigs and Â
real estate it's pretty much equal to the market cap so fascinating to look at thank you all for Â
coming thank you Silicon Valley stoic and Sean Donley and T andd Tesla and K8 and the Â
whole team that's here hope you enjoy the show uh that was the money flow show good night everybody
[Music]
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