For the past half year or so, the anticipated launch of Spot Bitcoin ETFs in the US has been the major driver of sentiment for the crypto markets. on January 11th of this year. they were indeed approved and began trading. A couple months ago, we released this video explaining why we thought a lot of the hype around the ETF approval was overblown.

You can check it out by clicking the link in the description below to get a sense of just how much hype there was going into the launch. Let's look at a few clips of Crypto Bulls predicting massive gains once the ETFs are approved. So the real rally is when we go to 1 million and that is when The Spot ETFs are approved and we have tens of billions, maybe hundreds of billions of dollars INF flowing to Bitcoin in a very short time frame. I'm talking about weeks and or days to weeks.

so that is the real rally. Well, I Think you can't really underestimate the significance of the spot ETFs Uh, it's not unreal reasonable to suggest that this may be the biggest development on Wall Street in 30 years. So I think in January the approval of The Spot ETFs is going to be a major Catalyst that's going to definitely drive a demand shock. So I I Do think this is a big moment and I Do think that, uh, the flows um, are going to help us demonstrate that there's real scarcity value here.

The exact opposite happened as of the time of recording this video on January 23rd. Rough 2 weeks after the Bitcoin ETF launch, the price of Bitcoin has declined by about 15% We can also look at the inflows into the Bitcoin ETFs. In the first 12 days. in total, nine new spot Bitcoin ETFs were approved.

The most successful one so far has been the Black Rock Ey shares ETF which has garnered inflows worth approximately 40,000 Bitcoins followed by Fidelity which garnered inflows worth about 34,000 Bitcoins All the other ETFs have received much smaller inflows during the same period. The B Bitcoin futures ETF saw outflows equivalent to about 5,000 Bitcoins The Grayscale Bitcoin Trust, which transitioned from a closed-ended fund to an open-ended ETF saw outflows of about 67,000 Bitcoins If we add all these together, we get inflows equivalent to about 37,000 Bitcoins which is worth about $1.4 billion. At today's prices, There are currently 19.6 million Bitcoins in circulation, so this represents 0.2% of outstanding Bitcoin About half a million Bitcoins change hands globally each day, so in the first 12 days, the net inflows into the ETFs represented about 6% of global trading volume. In this video, we'll look at why the Bitcoin ETFs failed to generate the massive inflows that many Crypt Bulls expected and what this means for the crypto industry.

going forward for the past few years, it's been relatively easy to buy Bitcoin You just have to make an account on a crypto exchange like Coinbase or any number of stock brokerages such as Robin Hood that support crypto trading. Thus, for retail investors, the fact that a Bitcoin ETF is approved should make little, if any difference. The Crux of the ETF Bull case revolves around institutional investors and financial advisers. Supposedly, there is a huge amount of pent up demand from wealth managers who wanted to put their clients money into Bitcoin, but for regulatory reasons, they weren't allowed to buy Bitcoin directly.

Thus, the approval of a spot Bitcoin ETF should open the floodgates to a huge amount of buying from these institutional investors. In our previous video, we pointed out the poultry inflows of Bitcoin ETFs in other countries such as Canada and the Netherlands. There's no I reason to believe that Us financial advisers would be more inclined to buy Bitcoin than their Canadian or Dutch counterparts. Another thing to consider is that since 2014, institutional investors have already had a way to buy Bitcoin with the grayscale Bitcoin Trust.

It was a publicly traded, closed-ended fund that invested exclusively in Bitcoin. Up until early 2021, Gbtc traded out substantial premium to the value of the Bitcoins it held. This is because there is indeed demand for Bitcoin exposure from people who are unwilling or unable to buy Bitcoin directly. This created an Arbitrage opportunity whereby accredited investors could deposit Bitcoin into the trust, get Gbtc shares in return, and sell those shares for a premium.

This caused Gbtc assets to Surge to a peak of 650,000 Bitcoins more than 3% of the global outstanding Supply Throughout 2021, more and more stock brokerages started supporting crypto trading, so there was less need for people to buy shares of Gbtc based on how Gbtc was structured. Once Bitcoin entered the trust, it was impossible for it to be withdrawn. On top of that, Gbt TC charged an exorbitant 2% Pere management fee. At this point, Gptc started trading at a discount and it looked like the Bitcoin would just be trapped inside forever to be slowly eaten Away by the management fees.

However, when the Bitcoin spot ETFs were approved on January 11th, Gbtc was also approved to be converted into an open-ended ETF. Thus, for the first time ever, withdrawals were now possible. In the first 12 days, Gbtc has already suffered 67,000 bitcoins worth of outflows roughly 11% of what it started started out with. They still own 553,000 Bitcoins, which is worth about $22 billion at current prices.

To put that number into context, let's look at the three largest Bitcoin ETFs in Canada Bitcoin ETFs were approved in Canada all the way back in 2021, so they've had ample time to Garner assets. There are more than three Bitcoin ETFs in Canada, but the smaller ones are too small to matter. As of January 22nd, 20124, the three largest ETFs have 2.3 billion Canadian dollars of AUM which is equivalent to about 1 .7 billion US in terms of population and GDP. The US is about 10 times larger than Canada, so it should stand to reason that eventually, the US ETFs in aggregate will eventually Garner about 10 times the assets as the Canadian ETFs.

So we should expect the US ETFs to eventually grow to about $17 billion of AUM Which is less than the current AUM in Gptc. Thus, any buying pressure from the ETFs could be partially if not completely offset by outflows from Gbgc Remember The Only Reason G Gbtc got so big is because of its structure as a closed-ended fund and the Arbitrage opportunity during the crypto Mania of 2020. The peak value of Gbtc should not be viewed as indicative for the organic demand we can expect for spot Bitcoin ETFs Today, of course, the Bitcoin Shs trying to Hype up the ETFs will'll never talk about this. This leads to the question: were the Bitcoin shills really so dumb to believe their own propaganda or were they intentionally trying to mislead the public? Shortly before the ETFs were approved, the famous Crypt bro Anthony Pomano gave a pretty telling answer to CNBC.

But all of this really formalizes the greater full aspect of why Bitcoin should go up right. It's just there's more, there are more people who are going to get in there and Buy and they have a new easy way to do it. Meanwhile, it it's easier to own Bitcoin directly than it was to own a barrel of oil or a gold bar or a Futures Contract When those things were introduced, it didn't change the overall price curve. This kind of Greater fool.

Theory One thing I always say to people is what is the most valuable commodity in the world. In my opinion, it's computing power. Bitcoin is the strongest computer network in the world. And so when you're buying Bitcoin, you're buying an asset that is backed by the strongest commodity in the world.

So when you start to think of it from that perspective, yes, it is internet native. Yes, it is for this kind of digital generation. but those people don't look at oil or gold or anything else as the most valuable commodity, they look at computing power. And that's why Bitcoin is so attractive to them.

Pompano's response was completely nonsensical. He appears to be referring to the miners which validate the Bitcoin blockchain. First of all, these mining rigs contain application specific integrated circuits. They are specifically made to buy Bitcoin and can't really be used for anything else.

But more importantly, owning a Bitcoin gives you zero ownership over these mining rigs. So to say they underpin the value of Bitcoin is absurd. Bitcoin is perhaps the single greatest example of a greater fool investment. It generates no cash flows and pays no dividends.

Thus, the only way for the Crypt Bros to make money is for someone to buy their Bitcoins from them at a higher price. That's why they're always going on CNBC and Bloomberg television giving absurdly bullish commentary in the the hopes that the audience will be Goble enough to believe them. Another thing that the Crypt Bulls are talking about is that the approval of the ETF shows that the traditional financial industry is now accepting of Bitcoin. This is supposedly very bullish for Bitcoin.

Perhaps the most extreme example of this comes from the mutual fund Company Franklin Templeton which manages over $1.5 trillion of client assets. They were also one of the nine issuers who launched a spot Bitcoin ETF this year as a marketing gimmick. they changed their Twitter picture to add laser eyes to Ben Franklin. They also started tweeting out cringeworthy crypto jokes and memes when I first saw this.

I assumed their Twitter account must have been hacked, but it turns out these are real tweets posted by Franklin Templeton a company which has 1.5 trillion dollar of AUM and used to be well respected. So what's going on? Let's see what the company's CEO Jenny Johnson has to say. You know it. Launching this ETF you can see obviously the demand that's out there.

uh for Bitcoin and I think there's a lot of reasons why that is. uh I think that one from a blockchain standpoint, the ability to pay Bitcoin is going to be a key component of that. Uh, and the technology is going to open up a lot of really interesting types of investment opportunities. We actually uh launched a tokenized Uh money market Fund where the first Uh mutual fund to or for first traditional asset manager to actually launch a 40 act fund on a public blockchain on the Stellar blockchain.

So apparently Bitcoin is going to be a key component of the ability to pay from a blockchain standpoint. Indeed, Franklin Templeton has already launched a Money Market Mutual Fund on a public blockchain. Last year, they launched the Franklin Onchain US Government Money Market Fund a mutual fund that invests in short duration government bonds. Instead of investing in this fund through a traditional stock broker, you instead have to download their app.

The investment interests in the fund are recorded using the polygon blockchain. According to Franklin Templeton, this blockchain integrated system has operational benefits including increased security, faster transaction processing, and reduced cost benefiting the fund shareholders. Because they use the polygon blockchain to keep track of ownership interests in the fund. Franklin Tumbleton is required to pay certain transaction fees using the Madic cryptocurrency.

Franklin pays for these fees itself, so the funds investors are not required to purchase any Madic tokens. Of course, Franklin passes these costs onto investors with an expense ratio of 89% This is extremely high for a Money Market mutual fund. For comparison, the I share 0 to 3 months treasury bond ETF is substantially identical in terms of its investment objectives. It has an expense ratio of just 13% Anyone with a stock brokerage account that supports Us ETFs can buy and sell this ETF instantaneously with negligible transaction costs by creating the Benji app in the blockchain enabled mutual fund.

All Franklin has succeeded in doing is increasing the management fee by seven times to deliver a product that all of its investors already have access to. In the unlikely event that these tokenized mutual fund products ever catch on. it has absolutely nothing to do with Bitcoin and would have zero direct impact on the price of Bitcoin. So everything that Jenny Johnson was saying about Bitcoin being a key component of the ability to pay from a blockchain perspective is complete BS With no factual basis, the price action around the spot ETFs confirms what many of us already knew: Bitcoin is an asset with no fundamental value and the greatest fool would be the one left holding the bag.

All right guys, that wraps it up for this video. what do you think about Bitcoin ETFs Let us know in the comment section below. As always, thank you so much for watching and we'll see you in the next one. Wall Street Millennial Signing out.