"What Happened to Bitcoin ETF?" Newsletter

Welcome back to your go-to newsletter for everything Bitcoin ETF-related. This week, we've got a lineup that's as shiny as a freshly minted Bitcoin. Let's dive in!

Here's the scoop:

• Bitcoin ETFs Now Control Nearly 4% of All Bitcoin

• Merrill Lynch and Wells Fargo Stepping into the Ring

• Bitcoin ETFs vs. Gold ETFs

• Vanguard's Missed Bet & Leadership Shake-Up

1/ 🔥 Bitcoin ETFs Now Control Nearly 4% of All Bitcoin 🔥

The landscape is shifting with Bitcoin ETFs in the US now holding nearly 4% of all Bitcoin in existence. According to BitMEX Research, the total amount of Bitcoin held by investment funds was 776,464 BTC ($47.7 billion) as of last Friday. Currently, there are 19.64 million BTC ($1.21 trillion) in circulation, and the eventual limit is expected to reach 21 million over the next century or so.

Led by giants like BlackRock's Bitcoin ETF, these funds are not just gathering assets; they're setting up to potentially outpace MicroStrategy in Bitcoin holdings. With significant gains already realized, the Bitcoin ETF arena is where the action is.

The world's largest corporate treasury, MicroStrategy, has acquired 0.98% of the Bitcoin supply, which is equivalent to 193,000 BTC worth $11.88 billion. The company, which was founded by Michael Saylor, a former Bitcoin skeptic turned enthusiast, has made significant gains on its Bitcoin investments, with a 95% increase in value to date. MicroStrategy's stock price has been closely linked to the performance of Bitcoin since its initial purchase in August 2020 when Bitcoin was valued at approximately $11,000. Since then, Bitcoin has seen a 450% increase in value.

The US government is believed to have 215,000 BTC, which is equivalent to $13.23 billion or 1.1% of the total circulating supply of Bitcoin, according to BitcoinTreasuries. They seized these coins during various criminal cases, including those related to Silk Road and the Bitfinex hack in 2016. Around 10% of Bitcoin is on cryptocurrency exchanges, while slightly more is with Bitcoin miners. Satoshi Nakamoto, the creator of Bitcoin, still has between 600,000 to 1.1 million BTC in their addresses, which is about 3% to 5.6% of the total circulating supply.

According to a study by Chainalysis in 2020, approximately 3.7 million BTC may be lost forever, which accounts for almost 19% of the total supply. However, excluding Grayscale's fund, US-listed spot ETFs have received $15.9 billion, which they used to buy 336,076 BTC ($20.62 billion). Due to Bitcoin's rally from under $47,000 to over $61,000, spot ETF shareholders (excluding GBTC) have made significant profits on their investments. In fact, they have made unrealized gains of over $4.7 billion, or 30%.

2/ 🌊 A Tsunami of Institutional Capital Headed Our Way 🌊

Bitwise's CIO Matt Hougan hints at an "even bigger wave" of institutional capital for Bitcoin ETFs, with big players like Merrill Lynch and Wells Fargo starting to offer these ETFs to their wealth clients. With the spotlight on Bitcoin's "IPO moment," expect the market to ride an even higher wave, thanks to this newfound institutional interest.

📈 Big Moves: With Merrill Lynch opening the door, a potential 2 million accounts and $3 trillion in assets could flow into Bitcoin ETFs. Wells Fargo and possibly Morgan Stanley are joining the party too!

Adding to this momentum, Ric Edelman, a prominent figure in financial advising, has projected an even more staggering influx of capital into Bitcoin ETFs. In a recent interview with CNBC, Edelman predicts that by the end of 2025, we could see over $150 billion flow into Bitcoin ETFs. Starting from a current base of $5 billion, this prediction outlines a monumental increase.

Edelman's forecast is based on the vast assets managed by individual and independent advisers, totaling approximately $8 trillion. Surveys indicate that 75% of these advisers are planning to allocate an average of 2.5% of their assets to Bitcoin ETFs. This calculated move is expected to significantly boost the inflow into Bitcoin ETFs, highlighting the growing trust and interest in cryptocurrency as a legitimate and lucrative asset class.

An easy-to-find link to the interview clip is available in the 'Hot Tweet' section👇👇👇

3/ 🌟 Bitcoin ETFs vs. Gold ETFs: The Race is On! 🌟

💥 JUST IN: #Bitcoin ETFs are closing the gap on Gold ETFs with $48 billion for BTC and $93 billion for Gold after just 33 trading days!

In the ultimate showdown of assets, Bitcoin ETFs are not just racing to catch up with Gold ETFs; they're challenging the very foundation of value as we know it. The shift from Gold to Bitcoin ETFs is not a mere market trend; it's a live demonstration of Bitcoin dematerializing gold. This monumental shift hints at Bitcoin not just rivaling but potentially eclipsing Gold's market cap, setting a breathtaking price target for BTC at $780,000.

While Gold has been the go-to store of value for millennia, Bitcoin is quickly proving to be the digital successor. The first gold ETF took its time, over two years, to accumulate $10 billion in assets. In stark contrast, BlackRock’s spot Bitcoin ETF shattered expectations and benchmarks by amassing $10 billion in just seven weeks. This rapid accumulation isn't just a testament to Bitcoin's growing acceptance; it's a clear sign of the changing guard in the realm of secure assets.

4/ 👀 Vanguard's Missed Bet & Leadership Shake-Up 👀

In a surprising twist, Vanguard's CEO Tim Buckley steps down, amidst whispers of his Bitcoin ETF stance. Last month, Vanguard banned all Bitcoin ETFs from their platform. Moral of the story: Don't mess with BTC.

With the change in leadership at Vanguard, the crypto community is speculating about the future of Bitcoin ETFs.

Tim Buckley's decision not to launch Bitcoin ETFs at Vanguard, as opposed to asset managers like BlackRock and Fidelity, and his subsequent departure as CEO after seven years, can be traced back to his strategic and cautious approach to investment product offerings. In an interview a year prior, Buckley provided insights into the investment landscape of 2022, characterized by significant losses in the global stock and bond markets, fueled by inflation and rising interest rates. He praised Vanguard investors for their prudent behavior during these challenging times, which included shying away from speculative assets such as cryptocurrencies, remaining calm during market volatility, capitalizing on tax loss harvesting, and rebalancing their portfolios.

Buckley outlined specific criteria for launching new products at Vanguard, emphasizing the need for the asset class to possess intrinsic value, suitability for long-term portfolio inclusion, practicality for integration into mutual funds or ETFs, and Vanguard's capability to manage it effectively. Cryptocurrencies, in his view, did not meet these requirements, mainly due to their lack of intrinsic value and questionable benefits for long-term portfolio diversification. By comparing cryptocurrencies to gold, Buckley indicated a preference for assets that align more closely with Vanguard's principles of diversification.

Vanguard's and Tim Buckley's cautious refusal to dive into the Bitcoin ETF arena has resulted in a glaring missed opportunity for profit, especially as other Bitcoin ETFs have shown remarkable success. This overly conservative approach, under Buckley's leadership, sidelined Vanguard in a rapidly evolving financial landscape where cryptocurrencies have emerged as lucrative assets. While the company prided itself on prioritizing assets with "intrinsic value" and "long-term benefits," this stance has arguably cost Vanguard and its investors significantly. Buckley's exit as CEO, after a seven-year tenure characterized by an aversion to embracing the potential of Bitcoin ETFs, underscores a period of potential financial growth left untapped. As competitors reap the rewards of their Bitcoin ETF ventures, Vanguard's hesitancy serves as a stark reminder of the cost of ignoring innovative investment avenues in the digital age.

🐦 Hot Tweet

Diving Deeper into the Bitcoin ETF Debate 🔥

In the whirlwind world of Bitcoin ETFs, Anthony Pompliano (a.k.a Pomp) endorses Ric Edelman's bold estimation:

Andreas Antonopoulos discusses the Bitcoin ETF conversation, using a vivid analogy to shed light on the essence of Bitcoin ETFs. He sparks a dialogue on the authenticity of experiencing Bitcoin through ETFs versus direct ownership.

CRYPTO CRUMBS ON THE TRAIL 🍫

Dive into this week's trail of delectable crypto crumbs, your go-to snack pack of the hottest news bites from the blockchain and crypto world. Just like the Milk Man’s toolkit, these snippets are your guide to the crypto landscape, handpicked and ready to fuel your journey.

1. Grayscale's ETF Effect: Grayscale CEO Michael Sonnenshein highlights a surge in Bitcoin's price post-BTC ETF approval in January. According to Sonnenshein, this unleashed pent-up demand, acting as a rocket booster for Bitcoin's rallies. A fascinating insight into how regulatory nods can unleash market dynamics.

2. Ethereum ETFs on Thin Ice: Crypto attorney Jake Chervinsky raises a red flag over Ethereum ETF applications, predicting potential SEC rejections. With the crypto community buzzing over BlackRock's Ethereum ETF interest, Chervinsky's cautionary note could signify turbulent times ahead for Ethereum's ETF dreams.

3. Bitcoin's Wild Ride: PlanB, the quant analyst with a knack for crypto cycles, suggests Bitcoin is entering a phase of its market cycle characterized by explosive price movements and heightened volatility. Strap in for the ride as Bitcoin navigates the bull market's ebbs and flows.

4. Dollar Dips as Bitcoin Soars: The U.S. dollar took a slight dip, setting the stage for an eventful week across global markets. Meanwhile, Bitcoin hit a soaring two-year high above $64,000, fueled by significant ETF inflows, spotlighting cryptocurrencies' growing allure amid traditional financial ebbs.

5. Glassnode's Bullish Bitcoin Take: Crypto analytics titan Glassnode points to a unique Bitcoin bull run, driven by skeptics doubting BTC's strength. This cycle contrasts sharply with 2021's leverage-fueled rally, painting a picture of a more grounded yet potent uptrend for the crypto king.

Stay up to date with these bites of crypto wisdom as you navigate the blockchain terrain. Crypto Crumbs on the Trail is here to keep you informed and ready for the ever-evolving world of cryptocurrencies.

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SmashFi Team

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Disclaimer: This newsletter is for the brainy and the brave. It's for informational purposes only and not a substitute for investment advice. Always do your own research.