Bitcoin ETF flows as a signal on red days

Transcript

One of my calls is we're going to see over a hundred new crypto-based products come to market in 2026. The other call is if not in 2026, in 2027, we're going to see a lot of products liquidate. Like there, I just don't think there's enough demand for all of these things. What's up everybody? It's LGD here and welcome to the Milk Road Show, the daily crypto show where the candles are red, Twitter is screaming, and the ETSs are quietly telling maybe a calmer story. We'll find out. Today is January 20th. On days when the market breaks uh and emotions are running hot, price action usually kind of maybe tells us the least part of the story. The real signal maybe shows up in how the capital is behaving behind the scenes. And today we're going to dig into what ETF flows reveal during these drawdowns. How to read these crash days

and maybe zoom out and read a little bit more without getting fooled by all the other stuff that's going on. to help us decode this. We've got James Seaffort, the senior ETF analyst at Bloomberg Intelligence back on the show to tell us all about it. And before we begin our episode, make sure to like and subscribe. We don't say it enough on the show. Like and subscribe below. Smash that like button. Subscribe to the show. James, welcome back to the show, man. >> Thanks for having me, LG. >> Okay. No, no. The only thing I want to know, and I ask people like you this often on days of the red, and since I've been hosting the show, there have been a lot of red panic days. I don't know if it's me or it's not, but maybe. You wake up, you've got your massive Bloomberg

terminal access, everything. What is the first chart you look at when you know there's going to be hell to pay on a day like today? >> I you said it's not price, but I kind of I that's where I go and I look at the futures prices because that's the first thing that you can see what everyone's doing. And often times, >> yeah, I mean, it it's it's one of those things where like and particularly Bitcoin, it's like uh it it's the most liquid thing, particularly over weekends when markets aren't open. And you know, the US wasn't open yesterday on Monday, which I feel like I I've talked to a couple people internationally who reached out to me yesterday and I'm like, I'm off, dude. Like like this is this is my vacation day, but I'll still help you out and answer your questions.

But yeah, I have like a whole screen where it's just blinking red and green where I'm looking at commodities prices and equity indices and yields and uh crypto prices. Um, so I look at that that that that's mostly where I pay attention and you can kind of get an idea. And obviously for for the ETFs, I like to look at flows and spreads and as long as spreads aren't blowing out, things look fine. And that's what things look like right now. Um, unfortunately flows is a little more of a delay. So we won't see how people actually react until midnight, 1:00 a.m. Eastern time in the US here. So tomorrow I'll get a good idea of trying to get gather what's going on. But honestly, even looking at flows in ETFs on a one-day basis, not the best way to look at things. like you

kind of have to look at a more holistic cuz weird things can happen with the way that people are you can you might be creating shares that you're actually planning to sell short and things along those lines. So there's a whole bunch of like nuances that you have to dive into. Um but yeah, those are all the things that that I tend to pay attention. The other thing is basis yield which you can talk about a little bit too. Um that's a little more real time to kind of get it's almost um kind of figure out what's going on in market makers world. >> So so so tell me this then. How do ETFs usually react to something like that? because we've had a few days like this uh in the last year. Uh we've had a tariff story before, although I don't know. This is kind of like a tariff a

little bit more escalated than that story. What What What are you expecting to see tonight at 1:00 a.m. when you get this kind of ETF flow update? >> Honestly, probably buying because that's what we see has been happening that people buy the dips in these types of situations. Um ETFs investors specifically tend to be very well behaved. Um there are subsets of the of the ETF industry, right? There are like super leverage products that are like 3x S&P, 3XQ's, 2x single stock, and those things will go crazy. They'll see inflows and outflows. A lot of times they like in a typical uh ETF like a just a broad-based exposure to equities or cryptos, the better it does, the more inflow it does over a longer time frame.

But when you have huge down days, you can actually see some outflows obviously. But ironically, on like those leverage and volatile products, the you'll actually see the inverse. So like on a really bad day, money pours in cuz people are like just trying to call the bottom on these leverage products. It's it's kind of it's very interesting the way that works. So um but really I mean if you go back to when I was first coming on your show and the ETFs were about to come out or just did come out and people were worried about them disturbing the market and they're they're going to be weak hands, they basically haven't sold at all. I have I look at charts of the cumulative flows and see what's going on and obviously there is some outflows with the poor performance but if you told me that

Bitcoin was down 40% and I talked to somebody on this podcast and I told you guys I doubt they're going to see more than 5% of their flows come out people would have been like yeah that's insane that's not going to happen. Um but the boomers who are buying these ETFs are diamond hands. So maybe people you're telling me that basically when ETFs started to be get approved and start to come out for crypto um that maybe the more emotional side of the market like Twitter uh underestimated didn't fully understand who these ETFs were going to be for. They weren't going to be for them emotional traders degen traders. It was going to be for people that are holding they're coming in to hold this for 10 years and they're they're looking for any dip they can get. Uh especially really really dramatic ones that don't

actually reflect the conditions of the macro, right? Because macro conditions are generally favorable at this point. So this is, you know, perhaps a blip for them. Uh, so you're telling me that ETFs are are are in a way in these times one of the more stable places to look in crypto. >> 100%. Yeah. So I I know you guys have Bitwise on a bunch and I echo a lot of the things they say. Um, uh, basically what the way that people the the biggest users of ETFs broadly are advisers for the most part, asset allocators. They're they're investing money on behalf of their end clients. uh whether that's wirehouses or brokerage or uh registered independent investment advisors, you name it, they're allocating and they have a goal to allocate a certain percentage to this space theoretically,

right? So if they have a goal set of, you know, I want 5% allocation to the space, I'm going to use an index fund. Um they're going to have that set goal and if the market price dumps on them, if they still believe in it, they're probably going to be buying. So they're like almost ballast on both sides. The other part of it is if they have a 5% allocation and the market rips on them, they might sell at the quarter end or semiannual yen when they when they rebalance and go back into and and sell some of these products. Um, so I think they're going to over the long term they're going to be balanced in the portfolio um or in in the actual pricing mechanism of these things, but again ETFs are just a part of the market. And yeah, I I I think overall these things,

they tend to be uh long-term allocations um rather than short-term trading. Obviously, short-term trading is part of what ETFs are, but for the most part, that's what's going on. And and the thing I was saying about Bitwise is they I was going to say this, but like I see it too. Like when I talk to people in the advisor world, the trady world, and they're looking at this space and they're thinking about allocating, whether it going from 0% allocation to half a percent to 1% to 3, five, whatever percent you're talking about, that's going on left and right. I see all these warehouses that didn't allow anyone to buy these ETFs, turning it on so their advisers can buy them. Morgan Stanley didn't allow any of their adviserss to buy any exposure to crypto ETPS until October of this year, and now they filed for a Bitcoin, Salana, and

Ethereum ETF. like all those things like the fundamental underpinning of like the potential demand coming from like my world very strong and then I go on crypto Twitter and it's like you you'd think we're in a a 2018 style bare market where it's down uh 70 plus%. Um so there's like a dichotomy of like the two worlds that I look at of like how people are viewing this and I think it more has to do with obviously a lot of people probably in NFTTS and really long ch longterm uh longtail altcoins and stuff and those obviously haven't done well but the broader ecosystem I think is it looks pretty strong still. I'm going to pause there for a second. If you're listening to this and thinking, "Okay, but what is the move I should actually be making?" Then going Pro is for you. Every week, our research team

drops a full deep dive on the biggest themes everyone else misses. Plus, you get access to our full Milkroad Pro portfolio that has real-time buy and sell signals and access to our Discord where our analysts will answer any question you have. If you want to level up, honestly, that's where you got to do it. Hit the link below. Twitter's a tabloid, man. People just live on drama. People need engagement. So they're they're going to find stories. ETF is like the least sexy thing for them, right? And DATs and all that. That's not very interesting. Unless there's a major problem, then that's fun. But otherwise, it's like now we got to figure focus on some other rug or something else going on. But Jason, I mean, >> yeah, go ahead >> real quick. I want to say like I just said before like I won't really know

exactly what's happening with the flows until tomorrow. Like to for people who are on chain and the stuff you're talking about, they're like I don't even want to look. They might have shut it off by now. They might have shut off the episode because they don't care. James, but I want to know about you, man. Do you on days like today where you know, especially you've been at Bloomberg for over a decade, you've been looking at ETSs for a really long time. You're you're deep, you're you're an expert, you're a master of this this stuff. When there are years like this and despite the macro looking so good, do you personally is there does doubt at all ever creep in despite what the the mat metrics that you look at are telling you, does that ever happen?

>> Obviously, it does today. today. Not really. But like there are times where it's like, "Oh wow, maybe this is it. Maybe it's not." You know, whatever. Uh maybe I was wrong to think this could grow. But I mean, at the end of the day, like >> the space has grown tremendously from when I started covering it. Like I've been covering this professionally since 2017. >> Um so like a lot of it started with a little bit of like the actual markets, but a lot of it was like the those grayscale products that turned into the ETFs we now have. Um so I've been covering those those vehicles for a very long time and I've uncovered the underlying market for a very long time. And I always thought uh it had a lot of growth potential. So I still I I do want to look at some charts and some metrics

in a second, but I want to ask you, okay, you've been covering this space since 2017. From a professional standpoint as well from Bloomberg, how does this current like tariff, you know, slop, whatever's going on, this total mess. How does this compare to other dark crypto days, right? Considering that it's like everyone's panicking and we're down to, I don't know, 90K Bitcoin, right? It's incredible. you zoom out. But how does this where does this rank or how does it compare to the other bad days of like the FTX or Mount Gos that kind of stuff? It doesn't >> it's not even comparable to me like it's not even like I mean we're we're you know you say down to 90k it's like price has not seen since last week is in my head like um I I really don't think it as far as like crypto specific stuff

goes I don't think it's that big of a deal. Obviously, I'm not saying from a macro perspective and what's happening in the broader landscape, it's not a big deal, but like and even just looking at what's happening with prices and basis and all these different things, it's it's I mean, obviously it's not great, but it's it's also not nearly as bad as I could have like if you had told me this was what was happening to markets yesterday, I would have been like, "Oh, that's not that bad." Exactly. >> Um, another question for you. you you obviously look at uh ETFs, this type of stuff across all of finance, so many other areas. How is crypto fairing, not just this week, but I guess in the new year, how how are how can you compare that to the other ones? Like is crypto still looking good compared to

everything else? Is there something else maybe blossoming as a as a potential place to pay attention to? >> Oh, yeah. I mean, so the the biggest new areas are like these derivative type products, these levered products. Um, anything focused on income and yield is doing exceptionally well. Particularly using derivatives as the underlying, we don't need to get into them, but things called autoc callables and buffers is still very strong. Anything using options to generate income on the underlying assets, which there are some that are doing it on these underlying crypto assets, too. Um, and actively managed funds. So, in in the ETF world, um, you have a lot of legacy active managers um, who are like really starting to lean into the ETF space. Um, so but I still to this day, I mean, if you if you ask me what are the most

successful launches of all time, I would tell you the Bitcoin ETFs were number one. I have a chart up there showing how successful IBIT was. And the Ethereum ETFs are probably number two if you expand it out like a year or so as far as flows, assets, dollar volume, all the above. Part of that probably has to do with the fact that it was like most of these other things when their time has come they just get an ETF and these things had to wait years like literally a decade in for in the case of Bitcoin from when the Walls first filed. So there was a lot of built-up pent-up demand and people were very interested in this space from 2017 onward for the most part uh and there was just no way to get in a regulated rapper. Um so once regulated rappers came out it was like a

breaking of a dam and that was our view on what was going to happen and it turned out to be right. Let's dive. Let's I It's good news for us. Let's dive into some of the charts that you sent me to look at today. Uh so we've got a lot of different things and these are coming. This is this is from your point of view. This is this is what you're opening up in the morning. So what are we looking at here? >> Yeah. So this is just from my 2026 outlook. Um you can see these are the ETFs that are existence right now or as of the end of the year really. So it's a little bit stale, but I basically I'm saying like we have tons of money in these products alone in the US alone.

And then if you go internationally, there's tons of money. So there's there's almost $200 billion internationally in in crypto specific ETFs. In the US alone, there's 130 products. I have a table showing the products that are going to come to market. That's not even updated. I have 124 tickers on there. I think the number is close to like 138 different um ETFs have been filed. >> How many 124 ETFs have been filed? How many are out right now? >> That have been launched. How many? >> So there's 130 now and there's another 124 coming. There's another 140 coming that were filed right now. And that's that's we could we're probably going to get over 200 next year. Like it we're going to crack another 100 new ones. The pro the question is like how much demand are these things going to get and what are

they what's coming to market. Obviously Bitcoin is dominating as you can see in this chart. Like the assets are almost all there. Ethereum a little bit. I'm very bullish on the basket and index demand. I think that advisers, those people I was talking about, the long-term allocators, they're going to like the basket or index approach to this space, right? They don't know necessarily. They don't want to pick just Bitcoin or just Ethereum or what have you. Um, so I think they're going to like the idea of like just buying one ticker and getting exposure to the the beta of crypto. Um, I think there might be people out there that will be more interested in things like, okay, I have Bitcoin, I have ETH, give me an index product of everything else because I'm not that's too far in the weeds. Um but obviously I mean I don't mean to

disparage Salana or H bar or XRP or whatever but I think that's the way things are going to go. So people are going to come up with actively managed baskets of like different weights and positions and things like that. So yeah the do I you said doge I would say there's been very little demand for that. Um, I would say HAR and chain link and salon and XRP have all done exceptionally well, particularly if you adjust for like the market cap of the tokens, but the demand for for Doge has been non-existent for the most part. >> Do you foresee I mean, so there's 140 more coming. Are they are we going to look at the same ratio here? Is it going to be largely Bitcoin and Ethereum dominant?

>> I think so. I the only thing so my my take is so right now their third basket index products I think by the end of 2026 they could be competing with Ethereum's size for assets depending on obvious if the price of Ethereum rips like obviously that because the way you change assets is twofold right the the organic way is taking in new money that's new flows the market subsidy is if the asset goes up obviously that can go cut both ways if it gets cut in half your assets are going to go down so um yeah I I think there's going to be a lot of demand for these basket type products because like I said if you're an adviser are used to buying the S&P 500, used to buying the aggregate bond index for your clients or or what have you, >> right?

>> Um they don't want to just be picking all these alt single coin assets, ETFs, um to do it. So, I think that's the way people are going to go. Obviously, plenty of people out there, Bitcoin maxis, ETH Maxis, what have you, and they're buying allocation. But from the the asset allocator perspective, the advisor perspective, which are the biggest users of ETFs, I think they'll have a lot of demand for the basket product, even if it's just a 1% allocation in a client portfolio. >> So, these are the filings. Yeah. So, there's 21 more active filings for Bitcoin. Again, this is as of the end of this is as of like just before Christmas essentially.

>> Yeah. Okay. >> Yeah. So, like, and there's been a bunch of new filings. Like, this doesn't include the Morgan Stanley filings. So, that's like three more that you can throw in there. There's been a bunch of other a couple other ones. Um, but yeah, this is 124 active filings out there for exposure. And I think these long tale of assets like it remains to be seen. One, if all of these are going to launch, I think the vast majority of them will, but who knows what the assets. So what's can you explain to me? So okay, so this is something I'm trying to understand and we have Bitwise on all the time, right? And they they run some of these ETFs. So you have 130 ETFs with how much? $200 billion across them basically.

>> So So the numbers down there it's like it's like 160 70 today. Um depending on where the price of the underlying assets are but >> Sure. Yeah. But something like this. So, so if you So, who are the companies launching more ETFs and are they hoping to bring some of that 150 160 over or do they have clients who they do not want to go and buy a different company's ETFs? They want to buy their own ETFs. Like, how do how does that work? Like if you're if there's 21 new Bitcoin ETFs coming, are they coming? But I'm saying are they trying to compete with the current ETFs or do they have a different class of clients who want exposure? Very one, very good question. Two, there's

multiple answers. One, it is distribution is king. So in Morgan Stanley's case, they have they control over a trillion. I don't I don't know exactly what it is for for their end clients, those that advisor area, right? Um so they're like, if we're going to put this in client accounts, we can do this ourselves. Why would we pay somebody else to hold the hold the assets, right? It's a niche new industry. We can do it. The second thing is all 21 of those only a handful are just like holding spot Bitcoin, right? A lot of them are like covered call or like buffer so you're protected on the downside but your upside's capped or doing all these various different things. Some of them are like >> Bitcoin and maybe they hold a little position in gold or Bitcoin and treasuries and based on what's going on

in the market, they're going to go overweight or underweight. So they're they're not just like pure spot. So, one, they're offering a different product and maybe like, okay, they've made a lot of money in Bitcoin, now they want a product that's a little more safe or maybe they want yield on their Bitcoin. So, you have new people coming in to try and steal from the old assets, but a lot of it is just like we think this space is going to grow and we want to have products here to offer to our end clients or potent not their necessary clients, but like with our partners who have clients that would invest in these things. And part of it is like not everyone they're not launching these things because they think they're going to be huge blockbusters just like IBIT was or or or Bitcoin ETFs in general like there's you

can have a $und00 million an asset ETF and it's very successful. It can be profitable for you to run that product. It's a trading vehicle. So people who want to trade things or if one of these altcoins, you know, does exceptionally well 2 to 3 years from now. If you have a product that's been around for a year or two, it has a good history, it has strong volume, it has good good enough assets, all of a sudden you're in a good position to take the lead uh in offering exposure to that on the trad. So that's why you see so many of these different tokens potentially coming to market. >> Got it. Okay. Okay. Thanks for explaining that. I think that helps a lot. Uh let's see what else do you have here. So this is what are we looking at?

This is looks like a major growth last year. >> This is cumulative flows into Bitcoin ETFs since their launch. So the point is like when you see these pullbacks like every time like you can look up it goes up and like in April if you look at April 16th we bottomed at $35 billion and and and but like they took in 40 and everyone's like talking about these outflows and it's like it's just it's just a little pullback. Like if you're going to look at this market what you want to see is you want to what you tend to see I should say is two three steps forward one two steps back. Um and then you keep that's the way things are going to move, right? that's that's showing growth and it's like sustainable growth.

Like if you're just seeing this chart line that's straightened up and to the right like >> that's not showing sustainable growth, I would argue. Um so although that's kind of what this is, but there's a lot of pullbacks along the way. So I was just showing this because now we're a little bit above that 56 billion in inflows. They've had a good week or so. The first week of the year um wasn't great for Bitcoin or crypto ETFs in general, but the last week has been pretty fantastic, honestly. Um so yeah. Is the is the emotion of the flow as basic as having pullbacks around these larger, you know, kind of macroevent blips, right?

Because, you know, April 16th, right, we're near the bottom there of the tariff, liberation day, all that stuff. We'll probably see, you know, there's a clear other spike here probably around October 10th or shortly after it or there's one big dip there and then it kind of leads to larger. >> All these things topped on October 10th like all >> James, why are the why did these people selling though? cuz we just told this whole story about how these people are the people that are coming in in this like they're boomers. They're going to hold for a long time. So, who's removing money? Are they are people taking out that money to go leverage long the whole class cuz it's it's dipping. Like what what where what is that money doing to leave so suddenly?

>> Yeah. So, you got to realize that the ETFs are used by a whole host of people, right? Like it's not just the boomers and advisers. There are people using this as trading vehicles. They're using these for the basis trade in many cases. So, if basis collapses, money's going to pour out. If you look at that chart from um February of 2025 down to April, if you look at the basis trade, it collapsed as well. And that money kind of didn't come back and the basis never really came back. So the b the flows that came in after April, none of it had to do with like basis trading really. Maybe some of it did, but like for the most part, the demand that we saw earlier in that uh it never really came back. So it it depends on who you're talking to and how they're being used. I

mean, the price did fall, you know, 126 to to 83 or 80, whatever it was at the bottom. Absolutely. >> And like for for only 6 billion to come out out of 62 is pretty like Yeah. People reframing. Yeah. >> Yeah. People understand what they're getting invested in, right? Like people aren't buying these things and like thinking it's a long-term safe safe asset. Like it's going to not have volatility. Like they go in hopefully they know that this asset has been prone to 70 plus% draw downs >> multiple times in its life. And then if you want to get to like 20 30% draw downs, I mean that's like standard every year pretty much for the most part. So like people they probably know what they're getting into. So I I think this shows like there's been good education

and people understand what they're investing in. So when you see volatility like this and this is the same thing but for Ethereum flows and it's like kind of a very similar chart. >> Why is ETH getting hammered? >> I don't know. >> We're under the golden question. We've talked about it hundreds of times on the show. It's it's a redu I mean a lot of these are are we we discuss them often but I I was wondering if you had a point of view there especially you know you have pretty positive inflows of flow ETFs right so there's a good demand there and even the pullback since from October >> 8th here until the end of December it's still only like a 20% pullback right so so what's what's up >> yeah I don't know I mean I that's one of those things where like you you see all

the new upgrades and a lot of things have improved dramatically with ETH from a fundamental perspective and it's just like people don't care. Part of it maybe is Salana is the Salana competition. Salana is doing very well, but so is ETH. I don't know. I I'm not a individual asset re like I'm not going to pretend to know exactly what's going on. Um, so I'm just looking at the flows and the performance and and things along those lines. And from from my point of view, this ETH has been hit a lot harder than Bitcoin too on the ETF side. Part of that might have to do with the fact that like staking is coming into these products and there's a little competition there. I don't really know. But the these these ETH ETFs, I mean, obviously still it's it went up over 15.

We've gone under 13. We're 12 and a half roughly right now. It's that that's not that big of a deal, but that is still that's a much bigger deal on a relative basis compared to what happened to the Bitcoin products. >> Yeah. So, this is just showing exactly how successful IBIT has bet was. So, I I mentioned the most successful launch of all time. If you look at Bitcoin ETFs as a category, they're take number one. But if you have to pick one, it's IBIT. So this is the fastest to a hundred billion dollars in assets. Granted, IBIT like came didn't exactly hit it. It was like 99 >> sure >> point something whatever. But if you look at when it took other the most successful products um this is just on a whole another level >> dramatically faster than anything else.

What are these other products James? Just >> so VU is just the S&P 500 product from from Vanguard. IA is a is a launch from Eyesshares which like uh it invests in international markets develop international markets. IMG is a high yield not sorry not high yield emerging markets equity ETF. So it's just like all basic products that are some of the most some of the fastest products we've ever launched to get to 100 billion. Part of the problem is like we were doing this like fastest to a billion. There was a whole bunch of things we compare it to. Fastest 10, fastest to you know whatever and then we get to a point where like it's there's not that many products that that get there in any reasonable time frame. A lot of them is like have launched 30 years ago and they're not even at this level. So it's

like in its own completely own category. >> That's crazy, man. Yeah, I think when you zoom out, this is this is a really cool chart to look at of just how much like it's not even comparable how much faster IBIT got to almost 100 billion compared to anything else in a in a tenth of the speed, you know, a fifth of the speed. It's wild. >> Obviously, a lot of it is flows. Also, a lot of it was performance. So, like like I said, there's two ways to grow aumum. It's it's organic flows. money keep buying the asset and buying the ETF and it's the underlying asset going up.

>> Part of the reason why when I said I looked at ETFs before and you asked me what I'm looking at on a regular basis, >> the ETFs like they don't have dislocations. There's not a lot of unless things get really really really bad. They don't have things that completely dislocate and break and things along those lines because they're just tracking the underlying, right? So like no matter what happens, if they get out of whack with the underlying, there's a market maker out there that can bring it back in line. So ETFs like when we look for something breaking, that's when things get really interesting if it happens. But it's it's so rare for it to happen that it like it's definitely not happening today or at least it hasn't yet. So, but we're early.

>> And you and you had one last chart here which and we've beaten this one to death as well on the show. People are tireing hearing about how gold is outperforming Bitcoin on a crazy level, but I think you know weeks like this you got a good narrative going on for gold and silver and all that. But uh tell us a little bit more about this chart. Yeah. So this is the AUM of gold ETFs and Bitcoin ETFs since their launch. So gold ETFs launched in 2004, they were extremely successful at the time, but you can see back in 2024, late 24, right after Trump got elected, Bitcoin ETFs almost surpassed gold ETFs in aum.

>> Um, I should probably reverse the colors here because I I have the Bitcoin as a yellow and the gold as blue. I'm going to I'm going to do that now that I'm looking at this. But you can see based on gold performance and tons of flows that have come into precious metals ETFs, um they were pretty close. Uh and now they're not even remotely close. So Bitcoin ETFs are under 150 billion and gold ETFs are nearing it on 300 billion. So uh yeah, they went from with being within a couple million to not even be being like half the size. So >> Bitcoin was right there. But hey, listen, man. Let's look at the chart before. Look what this Bitcoin has these violent moves. So you never know. No, you can catch right up.

>> If you go back to that chart, like look how aggressive that growth is, right? It's they they look very those lines look very similar from the Yeah. >> Look at this pull back, you know, look at this up to 60 and then down to 45 and then look what look what it's doing on your on this on this thing, right? Yeah. The same thing, right? Up to >> I mean, the fact that it got so close, you know, within a year, a year or two of launching, uh, compared to something that's been around since 2004. As you guys are listening to the show, you know that there's something hanging over the entire economy, and that's AI. And the problem with AI content is that almost no one explains what the news actually means for investors. Our new AI newsletter fixes that. Twice a week, we

break down the moves, the winners, the risks, and where the puck might be going. If you invest in tech at all, the link is in the description below. Check it out. James, I want to wrap this up. Um it was probably a wild day for you, wild day for us. Uh as usual, as it has been on on in this industry for for a little while. Um what should >> or when this guy is president? >> Yeah. When this guy's president totally. Uh what should we look forward to? Cuz last week was not not uneventful, right? Clarity act draft caused a whole a whole thing going on. And now but this week we've already forgotten that it was even going to happen last week. What what what are you looking forward to from your desk? What are the most important things coming up uh in the next couple

months? I mean, anyone sitting here and doesn't say clarity or what happens with clarity in this space is I don't know insane or lying to themselves. So, it has to be that. I mean, granted, if it doesn't I you see people out there, right? Like bad bill, no bill is better than bad bill um kind of thing. That depends. Like if we get to a point where there's no bill and then you have like right now things are okay because we have the the SEC run by someone who the the industry respects and likes Trump is in charge. All those things tend to be like everything that happened under Biden's SEC and Gendler has kind of been pushed aside. But there's no actual rules or laws that say like the way things are happening right now is the way they have to happen going forward.

So like until something is codified, right? like you kind of need something to keep this sort of relationship that this industry has with government. Obviously things could be better because there is a lot of rulem things along those lines but there's nothing saying it can't go back to have like a lot closer to the way it was. So I think it's extremely important. Uh and then the thing I'm watching obviously is all these products coming to market. I mean one of my calls is we're going to see over a 100 new crypto-based products come to market in 2026. The other call is if not in 2026, in 2027, we're going to see a lot of products liquidate. Like there, I just don't think there's enough demand for all of these things. Like I said, you can get to $100 million in assets and be profitable for a lot of

these ETFs depending on what you're charging. But like you you I don't know if if the market is going to be able to handle that many products and and for you to be profitable if you can just get like $10 million in assets in some altcoin that I've borderline never heard of. >> Okay. Well, when you think that that's going to happen, please come back on the show and tell us that part before it happens. >> So, so, so what ends up happening is like these things launch, we call it the spaghetti cannon, and all the issuers are just throwing spaghetti at the wall and seeing what sticks, right? Same thing happens with the um single stock ETFs, right? Like just because some they launch it and they let it sit there and hopefully like one of these stocks that's very volatile, something very good or very bad happens and it gets a

lot of volume and interest and assets and they can charge fees on those. I think the same is going to happen with crypto. They're going to launch a ton of these different products. There's going to be some issues launching active index funds. They're going to be launching single products on individual tokens. They're going to launch in yield. You name it, they're going to launch everything at the wall and whatever sticks and can garner assets and can be at least break even, they'll probably keep it open. Um, but things that are just losing the money for a year straight, they're probably going to start liquidating. So, these things launch, give it 12 plus months most likely at least, and we'll probably see a lot of these things liquidate. >> Okay. Well, I mean, most of this podcast has been like positive that things will be back on track soon and then you just

kind of painted this threw this like Hail Mary to the end. You're like, "Hey, later on though, just so you know, uh, a lot of these are going to get crushed. Thanks for thanks for sobering us up at the end." >> Let me let me say something real quick. So, B, like you in my space, it's like people think you get an ETF and all of a sudden it's like the promised land and tons of money is going to come in. like fish are just going to start jumping in your boat for your asset and they're going to get the same amount of flows and assets the Bitcoin or Ethereum ETFs have which is going to do XYZ to price and if you look at all these things technically XRP and Salana on a percentage basis for flows like basic versus their market cap these ETFs have

done as well if not better than ETH and Bitcoin uh as they started out um it's just that the dollar numbers aren't as big and it's still people just need to get that like you can be successful without being as successful as people were like spoiled by how successful those products were uh and you still have people blaming them for the you know the sell-offs in these different markets despite the fact that we know looking at onchain data that it was the whales and OG holders that were selling above 100K that has been the bulk of the selling that's happened over the last year or two. Um so you can look at all these things and and understand exactly what's going on. But yeah, basically ETFs are just a piece of the pie. Um they reflect market sentiment as much as anything. um flows are going to move

with price for the most part, but uh obviously not as aggressively and yeah, they're just a piece of the pie. They're reflective of the market and they're going to track the underlying price. That's their job. >> And that's and that's why we have you on, man, and tell us tell us that story. James, thanks so much, man. I'm sure we'll see you again uh in a couple months and kind of tell us hopefully we're we're I don't know. I don't think we'll be short of any drama between now and then. Uh so we'll have more more interesting things to talk about. >> Thanks for having me. This was fun. Want insights on what's moving crypto markets and how we're trading each event? Subscribe to our channel and join the Milk Road daily and pro newsletters and start investing like the top 1%. This show is for educational purposes only.

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