What happened on the first day of the Ether ETF

Transcript

GM good morning welcome to the milroad show The Daily crypto show where investment insights are hotter than a jalapeno dipped in lava I'm your host Jay Hamilton and after the first full day of trading the eth ETF did 1 billion in volume that's about 20% of what the Bitcoin ETF did on its first day which is a great start and this week we've got daily episodes to build your investment EAS for eth so you can conly explain to your wife or your husband why eth is one of the largest Holdings in your portfolio here to gu us today is the nicest guy in crypto zenica who first bought eth at

$100 welcome back to the show what's your reaction to the first day of the EF trading I'm uh pleasantly surprised I think I I was expecting it to do well but I think it's come out of the gate better than I and probably a lot of other people expected um um obviously there's a lot of numbers on the screen right now but as you mentioned 1.1 billion in volume is great um the most important thing though to look at is like the total inflows uh which I'm sure we'll get into later but uh generally speaking bullish good stuff obviously price action is not quite uh corresponding to that but I think even last week we were talking about how you know shortterm anything can happen you look at what happened with Bitcoin and it kind of crashed a lot and then took a

few days to recover um the global macro markets are kind of taking a tanking today so prices are down across the board I I'm pretty happy with how the ETF launched and and is going so far and uh I'm pretty optimistic about the next few weeks you mentioned it's most important to look at inflows versus volume and I think a lot of people get this wrong we actually put out a tweet milroad put out a tweet this morning saying that the ef's volume was 1 billion not the inflows and there's a big difference here and I thought I think a lot of people were confused about can you just explain inflows outflows and volume for everyone yeah so volume is basically the

aggregate of all the buys and sells so like someone does 100 million uh of buying of the eth ETFs and someone else does 100 million of selling the net impact is zero right there's no actual impact there someone buys the same amount as someone sells but the volume will show 200 million because there's been 100 million in buys 100 million in sales where uh the total flows is important is because that tells you what the difference is between the buys and the sales so if you have 100 million in buys and only 50 million in sales then the net inflow is plus 50 million um which is good for eth because it's by pressure uh towards eth the reason I mean a lot of people ask why were there outflows on day one um the reason being is that grayscale had has an ethereum

trust and they've had this for I think a few years now um which has basically been a way for people to get eth exposure on the stock stock market before these ETFs existed uh except the problem with it is that they were charging and still are charging 2.5% fees compared to all the ETFs that have like 0.1% 0.15% fees and so basically everyone who held this grayscale trust or a lot of them are going hey I'm going to sell out of this and you imagine buy the other ETFs um reduce my fees and so Grace if you look at this chart they're all inflows except for grayscale which had 484 million in outflow um and everyone else had inflows and so the the positive thing to take away from

this is even though there were half a billion dollars of outflows from grayscales trust people were selling there was enough buy pressure in the other I think eight combined ETFs that there was still a net positive day um and the even more I guess positive thing to think about when you when you're looking at this is that there's a limited amount of money in this grayscale trust that's charging 2.5% fees once people have sold all of it out of there that selling pressure disappears and then it's basically largely going to be net inflows um which is basically what we saw with with Bitcoin and then it's up to like regular Market fluctuations but I think once this whole grayscale overhang disappears uh we have more of an organic picture of

the the ETF flows and volume right now it's a lot of people selling out of one and buying into another the grayscale eth E trust had 485 million roughly in flows outflows yesterday which made the net flow only 100 million in the in day one for total eth ETF because so much but if you were to remove that then the total inflows would have been closer to 600 million correct which is super positive because what you're saying is these outflows from eth E from this grayscale ethereum trust they have an end this is isn't going to

go forever if we were to look back at uh as you said Bitcoin gra scale also had a Bitcoin trust that was very similar like I feel like we could just copy and paste what happened there to what happened here can you give us any idea of what happened with Bitcoin and like what we maybe can expect here yeah so the Bitcoin one was uh similar but slightly different in the sense that uh so there's a dynamic at play where the the trust was trading at a price that was less than the Bitcoin price and so basically um if you were to redeem your your uh let's say grayscale Bitcoin uh two months prior to the ETF launching you wouldn't get your full Bitcoin worth

of um Financial value out of it you'd be taking a like a haircut and so people didn't want to do that and so they waited until that sort of equilibrium balance out which was around the time of launch a little bit after launch whereas with the eth ETF it's basically been at parody there hasn't been that discount um for the last I think few weeks maybe month month and a half and so people are a little hes more hesitant to sell their grayscale Bitcoin the day of launch but then you know after a few days the the the equilibrium started to balance out more and there was more sale pressure because people didn't want to be paying the fees and they were no longer taking a haircut um and so what what we saw happen with Bitcoin was over the course of I think

about a month maybe you know five weeks there were these regular pretty much every day big outflows from the grayscale trust it was like this watching game of you know is all of that going to be eaten up by the other ETFs is it going to be a net inflow is it going to be a net outflow and we we saw all sides of the spectrum there were days where there were massive net outflows because you know the other ETFs weren't getting enough inflows there were some days where it absolutely consumed um all the outflows and there were massive inflow days and I think that um the important thing to take away is that it did end at some point eventually people ran out of this grayscale Bitcoin sell and that sell pressure disappeared and then it was you know mostly buy pressure people adding

to their ETFs people were occasionally selling from an ETF as well and and you know reallocating to another one or just taking some profits or whatever but um it did run out and the same thing will happen with eth I think the eth grayscale outflows are as a percentage higher than the Bitcoin ones were on day one and seems likely on day two and so that overhang will end sooner rather than later uh and the other thing I always like to mention when we're talking about like the inflows and outflows is that generally speaking most people who invest in ETFs are not day Traders they're not investing to flip on a weekly basis they they are building up a long-term portfolio they're going to allocate 1% of their portfolio if they a trafy investor or if you're a crypto

Maxi maybe you go much higher uh but it's usually funds that you're like you I'm going to put in this fund and just hold long term if you want to do day trading quick flipping then you know you have exchanges for that you have you know um your own you know onchain activity for that this no real reason to to trade and flip ETFs because there are fees involved whereas you could just go and buy and sell on a centralized exchange and just one final point on eth before I want to get into how the market has reacted and what is going on with the ethereum price and what you expect maybe over the next few weeks even though I know you don't necessarily have a crystal ball but uh just to further on the point that you made uh here's a tweet from Eric balunis where he's

pointing out that uh the outflows of e was about 480 million one thing that's so annoying just quickly I got a bone to pick on this it is impossible to find exact numbers on these ETFs like trafi is so frustrating I have to go to Twitter I on chain I can just pull it up in so many different sources but with these ETFs it's like everyone's got their own number and unless I have a Bloomberg ternal which I don't then like I can't figure it out myself let me just jump in there because even with the Bloomberg terminals I was reading something about how even more insane it is you'll look at like some of the numbers from the Bloomberg Terminals and it has like um for some of the ETFs the inflows are plus 80 million but the volume is like 50 million like how does that work out

there's OTC trades that aren't even logged there and so like even if you have all this there's still an amount that like discrepancies and so it's total chaos it's just it points out trafi markets are super inefficient and as a result of inefficiency it's it's a it's rigging the game towards people who can find their way around that which you know that like the the biggest players do which is unfair to everybody else the little guys people listening to this show and also on chain fixes that because it makes it much more efficient anyways it's just a we you and I could yell and scream about this for a while um but so eth saw about 5% of its total fund has already gone out in day one so there you go we're about 5% already in

one day so you could if you were that would be 20 days if it went 5% per day tough to predict exactly how long it'll take but I think year point is there's an end to this and it's probably less than a month here and then it's no longer going to have this outflow pressure at this at this level not to say there won't be outflows because people will sell uh especially if the price goes up on that note let's talk about ethereum's price when the ETF launched we were around 3500 for eth and now we're down to 32 3 33 3,300 um sorry sorry sorry 30 3,300 just about 33 what's your reaction how the market has responded up until like the

last couple hours really we saw pretty reasonable bullishness in eth relative to the rest of the market like you'd see Bitcoin dropping and eth wasn't dropping as much whereas historically you know Bitcoin drops Ethan every other token drops more than Bitcoin uh I suspect that has something to do with the ETFs uh you know when you look at charts on a day-to-day basis though there's so many factors out of anyone's control that it's really difficult to predict um you know what caused what is this because of the ETFs is this because Global Equity markets crashed and you know the there's a 1.1 trillion wiped off I think the US Stock Market um in the last 24 hours down 3% or something biggest day biggest lost in in i a year plus probably has

something to do with that and so looking at on a day-to-day basis I try not to read too much into it I think when we come back um this time next week and do the show it'll be really interesting to see what's what's happening then is eth like what what's the inflows looking like the are there outflows is it net positive net negative um how's the market reacted then right now I'm just kind of shrugging my shoulders and going you know what there there's very little sense reading too much into it right now let's just wait and see Hold On Tight before we move on to the next question I want to take a quick second to give a shout out to our awesome sponsor coin Geto API every crypto project needs reliable onchain data and at milk Road We Trust coin gecko API for Dependable

crypto prices for you and it's not just us coin gecko API supplies thousands of crypto projects with Comprehensive data including prices market trends nft data and onchain Dex data best part its integration and developer resources make it easy to set up friends of the Milkman guess what you get a free trial right now visit coingecko.com API and use code milk Road trial today okay on that note what do you expect for the short term next week few weeks uh I know you know you don't you don't have the exact ex the exact numbers nobody knows what will happen but and I think

the more important question is like what are you doing with your Investments and with your portfolio right now are there any moves you're making are you just sitting on your hands what's going on yeah I mean like I said the next week anybody's guess I think in the next few weeks we start to see price slowly tick upwards uh you know we've been chopping for a long time now and we haven't seen like a significant explosive mood move up or down obviously there was a bit of a crash and correction a few weeks ago but it it sort of stopped before it got too bloody and dangerous and I think the longer the the trop goes on the closer we get to you know the odds increase that we're going to see some sort of significant Market shift and Trend start to take shape whether it is up or down

uh I'm sort of betting that it will go up at a certain point in this cycle I don't think the cycle is over and so I I would think within the next few weeks um we start to see some of that perhaps it takes a little longer but there's a lot of bullish Catalyst the E EF is a big one I still am very bullish on it um the election is coming up we've got you know seemingly both candidates now seem to be more Pro crypto than any other election in history uh just general good things coming all around for for crypto so yeah in a week who knows in a month I'm I'm would I'm basically betting that you know prices will probably go up a little bit but but nobody knows that either and in terms of what I'm doing um I'm still

largely sitting on my hands and trying to like reallocate balance my portfolio into the majors uh a big struggle is dealing with like uh I recently moved back to Australia we were living overseas for five years and and um finally made the decision that you know what let's go home and once we came home it was like setting up companies and trusts to sort of make sure that we were like you know thinking things through smartly and you know we want to pay our tax but we want to do it in a intelligent and optimized way that that with crypto especially it can be tricky and so just making sure that everything is like in place properly working with a tax lawyer then start doing you know moves and trades and stuff so I'm I'm pretty happily sitting on my hands right now um but I do have this plan and

vision to work towards you know reallocating more to the majors and um I feel good about that when you talk about your plan uh one thing that I think you've talked about this before is the importance of writing down a plan and I've asked our other guests this week what their price prediction is for eth in this cycle uh so I'm going to ask you that same question but what I the question that I actually like better than that question is what's your sell Target price at what price and maybe this is for you or maybe this is what you would advise somebody else because it's very easy to say oh I think eth is going to go to 10K or 15K or 20K but

that's not the point is what is the all-time high in this market the point is making a plan for when you are going to start to sell and obviously that depends upon when you got in and your cost basis and all those things but we'd love to hear your thoughts around that so you can help our listeners start to formulate their plan because the last thing you want to do is sit through an entire market watch it go up and then watch it go back down and a lot of people make that mistake a lot of people think they need to sell everything all at once they don't understand that you can DCA out the same way you can DCA in give us a full perspective on the way you would approach these next six 12 months yeah I was actually at a poker game A couple days ago and talking to an

old friend who crypto came up and he was telling me how he's recently started you know getting into some soul getting into some eth and and buying and it sort of you know became apparent that he was pretty getting pretty bullish on crypto and all that kind of stuff and I was like that's great so sounds good but I was also sort of uh giving him telling him to exercise some caution because we're already decently well into this bull market it's not like eth is not $600 Sol is not $8 you know yes I do think we have higher to go from here and you can get like a two three potentially 4X on some of these big major tokens but I wouldn't expect a 10x on eth from here or soul from here necessarily this cycle um and so in that conversation I was

sort of saying you know I I think eth hits 10K you know by the end of the decade for sure by the end of 2030 probably sooner uh but you know if in the next 12 months we start seeing eth creep up there probably around the 8K Mark um I'm going to be looking to sort of DCA out and start selling positions similarly like if if Bitcoin hits 120k if if Soul hits $500 these are just like rough ideas in my head where it's like you know that's that's a lot of gains and that that's time to start taking some risk and money off the table I've already done a bunch of selling actually earlier this year um when Bitcoin first hit sort of all-time highs and I think that's like the way people should be thinking about it where it's it's very tempting and easy and to fall in the

Trap of just being a human and getting greedy and thinking oh what if it just does another 2x or 3x or like everyone is talking about e to 10K um so when it hits 8K of course it's going to hit 10K it's like it's so close and that's when you run the risk of holding everything and then it gets to like 9400 and then starts crashing and you you hold all the way down and so just like you said you can DCA out and I highly recommend that to everyone um because you're never going to time the the top you're never going to time the bottom unless you're extraordinarily lucky or you're GCR like most humans are not going to time the top or bottom GCR is a legendary Trader who timed the the Pico top in 2021 um among other things and so be human and

just sort of like you know you don't have to sell your whole portfolio but let's say you set a price Target it's going to change for everyone everyone is different they're in different Financial positions in their life some people are totally happy with a a 2X some people you know they can take more risk and they're trying to get a 5x or whatever it is um but once you you set down a Target you write it down you have it in advance because once you get there your emotions and other things will come into play once you get there say you know I'm going to start taking off you know 10% of my portfolio at 8K if if it goes to 8,500 I'll take another you know 15% off if hits 9k another 20% off and that way you know by the time it hits 10K um

you've taken a lot of profits if it goes up and hits 15K 20K amazing you've still got a lot of money in eth and crypto you haven't sold everything so you're not missing all the upside but then if it crashes and goes all the way back down to like 1,500 or 1,200 or whatever you never know what happens in a crazy bare Market you've at least taken profit secured money off the table um and again now that I'm back in Australia youve you've got your tax paid for you know that's one of the biggest traps it seems to catch a lot of people is you you do all this trading get to the end of the year you haven't taken profits price crash and then um maybe because of that you when you were trading within crypto you had all these taxable events and now

you have to pay tax on money you don't even have so uh be sensible take profits DCA out and and set your price targets because it will change for everyone uh the the most important thing I found on this front is that set your own price targets if you're listening to some if you're listening to us on this podcast if you're listening to someone on Twitter and you see a tweet and that's their price Target you're not going to have the right amount of conviction in it you have to like decide for yourself and you can listen to other people take hey this person said this I I like what they say this person said that I'm going to you know merge these two sort of theories together and in my head I think you know I'm able with you know this number write it down and then live by

your own rules don't worry about what everyone else is doing because you never know you know someone else might have a $10 million trust fund behind them or someone else might have uh $100,000 of debt so one person's selling away to like in your mind too early the other guy's holding way too long so you have to come up to your own mind because everyone's in a different situation do you have a all-time high price target for ethereum in this cycle this cycle I think like 11 12K is my uh this is the the the the non-conservative cycle this is where I think like if things go really really well I would expect us to hit around there uh but like I said personally around 8K I'll be looking to

start exiting um a lot of my positions especially uh if I still have like significant altcoin bags uh probably that's where again who knows what's going to happen to allcoins this cycle but that that's when I think altcoins become even more risky um than like Bitcoin and eth which uh usually they'll they'll drop in a bare Market but not as much as like they're not going to go down 99% like a lot of other things might but they yeah they clearly have further to fall and that's I think that's the other question and maybe a question that we can talk about on a future show because we got to wrap up today but is what is the I'd like to see more people talking about what do you think is the the the range the bottom of the next Bear right so

okay in this bear we ranged really mostly between like two to 3,000 for like quite a while right like eth was in that range you know sure we dipped below 2,000 but like two to 3,000 was like the like di below 1,000 for a bit I guess we dipped below 1,000 we were in like the one to one to two throughout the bear and then we were in the we've been in the two to three for a while now so like what is what's our next low right is one thing I don't know if you thought at all about that I I thought about it the other day um basically it was like do we ever see three-digit eth again sub 1K and and there's a chance but I think it it's becoming less likely by the day I would say maybe around, 1500 is is like

the assuming we hit like 8K 10K this cycle um and that's a big drop like going from 8K to 1500 that's you know 80 plus percent so be prepared for stuff like that to happen because we've seen it time and time again in crypto uh you know maybe it doesn't drop that much maybe it goes to like 2200 after being at AK that's still a massive job maybe it goes even lower it's like you never know what's going to happen maybe you know another Co event hits maybe AI super virus releases into the environment or AI Bots come you just don't know in the world um and so don't be in a case in a situation where you had like life-changing money on the table you could buy a house you could pay off your debt you could retire you could you know whatever it would change

your life and you roundt trip it all because you were trying to get eth from 8 500 to 10K thinking you know that's another 20% but you end up losing 80% in the process wise words from zenica Zen thanks so much for joining us again today thanks for having me as always thanks everybody for listening in have a wicked awesome day thank you for listening to milk Road radio the easiest path to get smarter about crypto if you like this episode share it and hit subscribe or follow so you don't miss out on the next one there's also a link in the description to our free 5minute daily news letter where we simplify crypto for you while making you laugh and if you're willing to step up your

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