🚨BTC ETFs Exposed: Real Impact You Need to Know! 💥📊

Summary

In 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

• 📈 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.
• 📊 The script discusses the flow of money into ETFs and how it correlates with Bitcoin's price movements, highlighting periods of inflow and outflow.
• 💹 The speaker mentions that macro events, such as Germany selling Bitcoin, have a significant impact on Bitcoin's price, independent of ETF flows.
• 🔢 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.
• 📉 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.
• 🌐 The speaker acknowledges other significant players in the Bitcoin market, such as Michael Saylor and Black Rock, and their influence on Bitcoin's price.
• 📉 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.
• 📊 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.
• 📰 News updates are shared, including Japan's decision to lower the tax rate on cryptocurrency gains and a pro-Bitcoin candidate's political victory.
• 💡 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

00:00

📈 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.

05:07

💹 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.

10:10

📉 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.

15:11

🌐 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.

Keywords

💡Bitcoin ETF

A Bitcoin ETF, or Exchange-Traded Fund, is a financial product that tracks the price of Bitcoin and allows investors to indirectly invest in Bitcoin without actually holding the cryptocurrency. In the video, the speaker discusses the impact of Bitcoin ETFs on the price of Bitcoin, noting that they have become a significant factor in the market. The speaker analyzes the correlation between ETF flows and Bitcoin price changes, indicating that while initially high, this correlation has decreased over time.

💡Correlation

Correlation in this context refers to the statistical relationship between two variables, in this case, the flow of money into Bitcoin ETFs and the price of Bitcoin. The video discusses how the correlation between ETF flows and Bitcoin price was initially high, suggesting that money flowing into ETFs was a strong predictor of price increases. However, this correlation has since decreased, indicating other factors are now more influential in determining Bitcoin's price.

💡ETF Flows

ETF flows refer to the net amount of money going into or out of an ETF. In the video, the speaker tracks these flows to analyze their impact on Bitcoin's price. Positive flows, indicating more money is entering the ETFs, are generally seen as bullish for Bitcoin's price, while negative flows can be bearish. The speaker notes that despite some large outflows, the overall impact of ETF flows on Bitcoin's price has been significant.

💡Market Manipulation

Market manipulation in the context of the video refers to the potential for large market participants to influence the price of an asset, in this case, Bitcoin. The speaker speculates that market makers might have manipulated the price of Bitcoin following large outflows from ETFs, possibly to create a buying opportunity. This concept is important in understanding the various forces that can affect the price of Bitcoin beyond just supply and demand.

💡Macro Factors

Macro factors are large-scale economic, political, or social factors that can influence financial markets. In the video, the speaker mentions that macro factors, such as economic policies or geopolitical events, can impact the price of Bitcoin. These factors can sometimes overshadow the influence of ETF flows, as they can create broader market trends that affect all assets, including cryptocurrencies.

💡Multiplier Effect

The multiplier effect in the context of the video refers to the idea that the inflow of money into Bitcoin ETFs can have a magnified impact on the price of Bitcoin. The speaker discusses a '21x multiplier' based on historical data, suggesting that for every dollar that flows into ETFs, the price of Bitcoin could increase by 21 times that amount. However, the speaker also notes that this multiplier has changed over time.

💡Long-term Holders

Long-term holders in the Bitcoin market are individuals or entities that hold Bitcoin for extended periods, often with the expectation of long-term appreciation. The video discusses how the actions of long-term holders, such as selling large amounts of Bitcoin, can impact the price. The speaker mentions that sales by entities like Grayscale have influenced the market, reducing the correlation between ETF flows and Bitcoin's price.

💡Fear and Greed Index

The Fear and Greed Index is a measure of investor sentiment that oscillates between fear and greed, reflecting the overall sentiment in the market. In the video, the speaker refers to this index to discuss the current sentiment towards Bitcoin, noting that it is at a level that might indicate a good buying opportunity. This index is used to gauge market sentiment and can influence trading decisions.

💡Bitcoin Miners

Bitcoin miners are individuals or companies that contribute their computing power to validate transactions and add new blocks to the Bitcoin blockchain. The video mentions the challenges faced by miners, such as market downturns and regulatory changes, which can affect the supply of new Bitcoins and the overall health of the network. The speaker also discusses the efficiency and production levels of certain mining companies.

💡Tax Policy

Tax policy refers to the rules and regulations governing taxation. In the video, the speaker highlights a change in Japan's tax policy regarding cryptocurrency gains, which will reduce the maximum tax rate from 55% to 20%. This change is significant as it could encourage more investment in cryptocurrencies like Bitcoin, as lower tax rates can make such investments more attractive.

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 million流出 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  

one out this is a very special analysis we are  eight months in to these Bitcoin ETF thingies  

and the question I ask myself is what impact have  they had on the price how correlated are flows to  

the price at the very beginning they were very  correlated to the tune of about 6 7% I wonder  

what that is now and what else is affecting the  Bitcoin price where are we and who do we depend  

on let's jump into the trends and again this  will be a a little bit of deep analysis but  

it's fun I'll make it fun I promise and thank you  to the mod chat let's go not Financial advice and  

shout out to moto 89 I've been watching you in  the comments for ages on YouTube thank you for  

joining patreon and I remember every name and I  watch every name Nick M good see you up there in  

Canada now this I shared this exactly a month ago  on this Bitcoin daily video it's too funny waking  

up to $58,000 bitcoin for the hundredth time and  I understand shout out to Big Ed that's his name  

apparently um yeah I understand it's frustrating  but it's also funny and yesterday we had a wick  

from hell bitcoin's up 1,600 bucks from the  bottom yesterday it fell to like 565 if I'm not  

mistaken and uh bounc right back up so here we are  let's get into the money flow analysis I do this  

crunches a lot of numbers but I do it once every  I think it's every three months or so but I think  

it's interesting so here we go I chart number  one this is the ETF flow and the t+1 price change  

in percentage terms the numbers are in millions  of dollars so the blue lines are all the inflow  

of the ETF since Inception the red lines are  the percentage changes in price and what's  

really interesting about this is sometimes we  had some really interesting dips both outflows  

out of ETFs and very little impact on price  sometimes you had big inflows into ETFs and  

very little impact on price and then sometimes we  had events like Germany selling scared the crap  

out of Bitcoin holders and we had the monster  carry trade reversal that Wicked us right down  

again there are things that happen on the macro  side of the world that do impact bitcoin price and  

the question is how much do the ETF flows impact  it and we'll jump into that another thing that  

I'm always very interested is the correlation of  how much the actual Bitcoin move is driven by the  

ETFs and here basically it's a scatter chart of  every single correlation of every single event  

and again at the beginning the correlation  was much higher so if money went into the  

ETF price went up but as of the last 30 to 50  days that's Fallen a lot I think it was about  

67 at the beginning and what's interesting now  too is you can see in the bottom left quadrant  

43 times the actual inflows have been positive  and the price of Bitcoin has gone negative and  

14.2% of the price action can be explained by the  ETF flows again it used to be 67% now it's only  

14.2% something has changed long-term holders sold  Germany sold Genesis sold grayscale sold the 5gs  

as I call them US government moved some around  then we had Mount gaau that has all interrupted  

this correlation but the impact of the ETFs is  staggeringly large let's talk about them for a  

second 8 months in these are the statistics 6.73  4 billion has float in net to these ETFs that's  

an average of $103.3 million a day the worst day  we had was minus 563 million out the biggest day  

in 1.45 billion and we have 162 days in the bag  everybody and that's where we are now what I want  

to do is try to figure out okay mathematically  cuz I been talking about my eye multiplier for  

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  

interesting because 42k before the Bitcoin ETFs  was my having price Target that's how precise  

that was didn't take into account the ETFs the  ETFs technically as far as I'm concerned and my  

models are concerned have lifted the price over  $144,000 so that's the 0.142 multipli by the 16.  

734 billion is about 2376 billion impact but let's  get into my multiplier this is the interesting  

part uh you've you know since 2021 I've been  talking about my 21x multiplier which I backed  

into from the Tesla Bitcoin purchase the impact  of A1 and a half billion doll spend by the way  

Michael sailor someone now is issuing stock to  buy two billion in Bitcoin I it's a great time  

to buy and I know he's chomping at the bit  right now we'll talk about that in a minute  

minute too but the ETF multiplier Bitcoin market  cap January 11th $884 billion Bitcoin market cap  

now September 4th 1.14 billion it's probably  1.42 billion at this stage because the price  

has just gone up and the increase in Market  Gap is 256 billion so if you take the market  

cap increase divided by the ETF inflow you  get a multiplier on the market cap of 15.3  

H it's not 21 but remember we're just talking  about the ETFs let's look at the I multiplier  

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  

these if you plug in the 15.3 multiplier from  the ETF money flow of .73 4 billion we get a  

price based on 15.3 of 59,6 which is basically  900 bucks away from where we are right now so  

that is the money flow for the ETFs so now we know  if Larry Fink comes in and buys a billion dollars  

or if the money flow is X percentage per month  or per week or per year we have a pretty good  

handle on the impact on bitcoin price but again  we've been through the 5gs if those 5gs didn't  

happen the price would be a lot higher and that  is the math and we'll continue to monitor this  

as we go forward and shout out to ecoin metric  2o they mapped out a your model and basically  

the conclusion is net positive ETF inflows are  good for bitcoin price and since the ETF launch  

we've observed a positive correlation between  the Bitcoin monthly returns and the net flows  

for the ETFs over the same period roughly the the  painting with a very broad brush here for every  

10,000 Bitcoin captured by the ETFs it boosts  the Bitcoin price by about 4% so think 10,000  

Bitcoin 4% increase in price but let's talk about  something else kind of stunning as well if it was  

not for Black Rock these puppies would be red the  numbers that I calculate every single day for 163  

days now gray scale Bitcoin trust and their mini  Bitcoin trust have bled $19.56 billion okay if it  

wasn't for Black Rock buying $2.8 billion we would  would be red that means Fidelity uh bitwise Arc  

Etc were not big enough to absorb the dumpage  From grayscale Grace Kell has been a horrible  

skunk horrible bleedout but thank goodness for  our friend the fster thank you Larry Fink because  

again it would have been garbage terrible disaster  if it wasn't for Black Rock buying so much and of  

course it's not people say when I say black rock  buying so much it's the people that black rock  

represent the high netw worth individuals the  Pension funds Etc they're the ones buying this  

stuff so anyway that's the story and remember  as well we've only had one negative month on the  

ETFs and that was April April sucked 674 Bitcoin  out shout out to hle 15 capital and August was  

slightly positive about a th000 in but still I  do expect things to get a little bit better into  

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  

nine ETFs and that doesn't take into account the  money flow from other players so we'll update it  

and hopefully we don't have another 5gs coming  our way that will dump their bags on the market  

on the price because that does have an impact  I want to introduce this to uh we launched this  

two days ago over 5,000 people have completed it  it's a free investor profiler nothing like this  

has ever been done before in the history history  of the world and I was inspired to build this out  

years and years ago by a guy called Ray doio  because he said it's most important thing in  

investing is know your blind spots so this is  the IIA investor profiler took us three and a  

half years to build this it took me 25 30 years  of thinking about it and you can discover your  

personality who you match up against Legends like  Buffett or Lynch or others Kathy Wood and your  

strengths your weaknesses and your blind spots  so again enjoy it it's very very important to  

know what you're good at and what you're not good  at and then Shore up those weaknesses let's get  

into the Bitcoin black hole before we get into the  news and the charts it's a big one today because  

a lot to cover first of all um forget forget that  piece but Bitcoin ETFs are losing steam day 162 I  

added a big red line here to show you the big  dip we had five nasty nasty red Days running  

into the end of August and early September so far  yesterday alarmed me a bit when I saw that nearly  

600 million was flowing out of the EAS ETFs  and I was worried it would have an impact on  

price and it did Bitcoin dipped but I don't know  if it's because of Market maker manipulation to  

pump to feed the bags but 5,000 Bitcoin hit the  market yesterday out of the ETFs and that is the  

I think the fifth or sixth biggest dump ever since  Inception most importantly if you look at these  

two charts the red line is the cumulative money  flow it's going down that is not good we have  

Cycles when it goes up and down but really it's  looks like they're losing steam right now and that  

part of that might be because of the August the  summer doldrums Etc nervousness about the macro  

but once rates get cut once money printing happens  we should be getting into stronger months as we  

go forward I do believe and the five nasty days  nearly $800 million left the system system in just  

5 days which is kind of scary but anyway those  things are volatile and you can see here uh you  

don't need that one most importantly though the  Bitcoin ETF still hold 928 th000 Bitcoin which is  

4.7% of supply and we should have a little party  when they hit a million Bitcoin or not because  

the Bitcoin Maxis don't like the ETS having so  much power and remember I always maintain they'll  

never be more than 15 million Bitcoin so if they  do hit 1 million Bitcoin which I believe they will  

probably in the next month or so that means the  ETS will hold 115th of the supply Bitcoin any  

playlist will be here let's get into some of the  charts as well first chart is fear and greed is  

still at 27 people are nervous 25 is a nice place  to buy I think we if if this was reflecting the  

attitude last night it would have gone down to  like 20 because it was pretty scary and let's  

talk about the bull market Corrections and where  we are in terms of draw Downs on average Bitcoin  

investors a holding relatively small unrealized  losses compared to Prior Cycles which is favorable  

overall however short-term holder unrealized  losses are a little bit elevated indicating they  

are the primary cohort at risk when people are  under water they're more likely to sell because  

they can't take the pain and you can see profit  and loss taking activities remain remarkably light  

but the critical metrics such as cells side ratio  allude to a potential for heightened volatility  

near term the draw down there you see right now  we're at about down 22.8% off the highs we did hit  

as high as over 30 33% I think with that carry  trade reversal and the downward pressure has  

increased a little bit but again price action has  been stagnant investor sentiment is apathetic over  

the last 6 months however there are some things  where everything is changing we've gone through  

a lot of storms um the accumulation is still  there from the ETFs and Retail will probably  

come back but they don't really have that much  money compared to 2020 2021 so we'll see where  

we go from here but this draw down is typical and  this is forgot to mention a bull market correction  

draw down we are still in the bull market a  lot of people think it's over we're in the  

barrel already it's like no no it's still halfway  through now let's get into some bitcoin news shout  

out to Michael sailor he reminds us we are all  on team Bitcoin he posted this today I thought  

it was very cute and no violation of McDonald's  trademarks there at all and Japan this going to  

be a little tiny little Tailwind Japan will drop  the maximum tax rate on bitcoin and crypto gains  

from 55% to 20% and this is a significant change  in Japan's tax policy regarding cryptocurrencies  

currently Japan's cryptocurrency profits as  miscellaneous income with rates up to 55% for  

high and a worth people I think it's people who  earn more than 200,000 Japanese Yen from crypto  

activities what's that knock off twoos $2,000 is  not very much anyway that's a little bit of good  

news there another good news too um we have some  a little the reason we talk politics is because  

it does impact the Bitcoin price so go John Deon  Pro Bitcoin candidate set to challenge the anti-  

crypto Army in the state of Massachusetts shout  out to anybody there in Massachusetts if you're  

watching me you probably like Bitcoin therefore  you probably like from Bitcoin magazine here  

the pro Bitcoin candidate John Deon he did win as  primary so he is now representing one side against  

the other side in the first ever Bitcoin election  this is a historic moment ladies and gentlemen  

be exciting to see what happens fingers crossed  fingers crossed and caner maintains I know Bitcoin  

miners it's been a blood bath I know I know I  know but big cander Fitzgerald I know they're  

Bitcoin Bulls but they still have a $23 Target  on clean spark um and that's a 2.64 x from where  

it is now so pretty impressive now I don't have  all the mining data in yet but they're petering  

in three of the four three of four of the top  miners have already reported their production  

for the month of August uh expected to go down a  fraction for all of them because the hash rate has  

gone up we hit an all-time high yesterday uh clean  spark hit 478 monthly production and uh their hash  

is up to 22.6 X aash and their efficiency is 22.7  Jews per terahash so they are lean and mean and  

they've produced 4,600 Bitcoin so far this year  and they hold over 75,000 Bitcoin which is big  

in fact when you break down the amount of huddle  that they have the actual value of their Rigs and  

real estate it's pretty much equal to the market  cap so fascinating to look at thank you all for  

coming thank you Silicon Valley stoic and  Sean Donley and T andd Tesla and K8 and the  

whole team that's here hope you enjoy the show uh  that was the money flow show good night everybody

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