GM to all 42,198 of you. Crypto Nutshell #216 feelin’ comfy. ☕ 🥜 

We’re the crypto newsletter that's more thrilling than a group of illusionists pulling off heists during their performances... 🎩🔮

What we’ve cooked up for you today…

• 🤔 We overestimated the ETFs?

• 🌊 Tsunami has begun

• 🐻 Imagine being bearish…

• 💰 And more…

MARKET WATCH ⚖️

Only the top 20 coins measured by market cap feature in this section

WE OVERESTIMATED THE ETFs? 🤔

BREAKING: Bitwise CIO says Bitcoin’s dip driven by ETF over-enthusiasm, not Grayscale outflows

Bitwise Chief Investment Officer, Matt Hougan, believes we overestimated the Bitcoin ETFs.

Hougan explained that the recent sell-off was due to high expectations of “larger net flows”.

But here’s the interesting part.

Whilst the market overestimated the short-term impact, it's underestimating the long-term impact.

This is what healthy ETF growth looks like:

Despite heavy outflows from Grayscale, the ETFs are still net buyers of Bitcoin.

If you include Grayscale, after 8 days of trading the Bitcoin ETFs have seen $982.9 million in net inflows.

Excluding Grayscale, this number jumps all the way up to $4.95 billion…

How can you say the ETFs flopped with numbers like this? 😎

(more on this in the next section)

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Even more impressive?

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Thanks to Masterworks.

Masterworks enables its 820,000+ users to access investments in multi-million dollar artworks by artists like Banksy, Basquiat, and Picasso for just a fraction of the cost of an entire piece.

When Masterworks sells a painting, like the 16 it’s already sold, investors can get a return on their investment.

With 3 recent sales, Masterworks investors realized net annualized returns of 17.8%, 21.5% and 27.3%.

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*Past performance is not indicative of future returns, investing involves risk. See disclosures masterworks.com/cd

TSUNAMI HAS BEGUN 🌊

Meet Rachel Aguirre. She’s the head of Bitcoin ETFs at BlackRock.

Everyone in the crypto space is debating whether the launch of the Bitcoin ETFs were a success or not.

From BlackRock’s perspective?

They were an overwhelming success. 🌊

In an interview, Rachel clarified that on every measure, the launch was successful.

Rachel then laid out that BlackRock is in the Bitcoin game for the long-haul.

Hearing that the world’s largest asset manager is:

1. Seeing a ‘ground-swell of interest’

2. Is committed to Bitcoin for the long haul

That’s huge.

The recent Bitcoin price action has been lackluster. But don’t underestimate the long-term impact of the ETFs.

The passive flows that have been unlocked, continuously buying up Bitcoin, is a tsunami of demand.

To put the demand into perspective, Michael Saylor has bought up 189,150 Bitcoin ($7.55 billion) over 4 years.

Just BlackRock & Fidelity (current 2 largest ETFs) have bought up 82,154 Bitcoin ($3.28 billion) to hold in their ETFs.

In only 2 weeks.

The Bitcoin supply is being eaten up.

This is only going to continue... 🌊

IMAGINE BEING BEARISH… 🐻

Since we’ve been talking about the recent sell-off quite a lot recently, let’s put it into context.

If you’re new to crypto, price corrections like these are common. 📉

Historically, bull market uptrends see price corrections greater than -25% from the local high.

We’ve even seen some corrections exceed -50%.

The chart below visually breaks down Bull Market Correction Drawdowns of previous cycles.

The coloured bars coming down from the top of the chart indicate the relative size of corrections from local highs. (the longer the bars, the larger the correction)

Here’s the largest drawdown’s we’ve seen during previous cycles:

• 🟠 Genesis to 2011: -49.45%

• 🔴 2011 to 2013: -71.15%

• 🔵 2015 to 2017: -36.01%

• 🟢 2018 to 2021: -62.62%

• ⚫️ 2022+: -20.1% (September 2023)

The current correction is only at -18.4% (no where near as large as previous cycles and not even the largest of this cycle)

Bitcoin is absorbing billions in daily sell pressure.

Which suggests that buy-side support is still extremely strong.

Imagine being bearish now… 😎

CRACKING CRYPTO 🥜

Grayscale sends 19,236 BTC to Coinbase, moves 8,000 BTC internally. As the Grayscale Bitcoin outflows continue, the fund today, Jan. 24, sent a further 19,236 BTC valued $754,782,168.

Bitwise releases wallet addresses of spot Bitcoin ETF holdings. A Bitcoin address provided by Bitwise Asset Management linked to the firm’s spot BTC exchange-traded fund contained roughly $465 million worth of crypto.

BlackRock spot ether ETF decision delayed by SEC. The BlackRock delay was largely expected, with the SEC also delaying decisions on Fidelity’s proposed fund on Jan. 18. 

CAN YOU CRACK THIS NUT? ✍️

Select your answer below and you’ll be redirected to the results page. (answer explanation can be found after “Meme Corner”)

MEME CORNER 😂

Because what would the crypto world be without its share of memes?

Trivia Answer: A) 6.25 BTC 🥳

Currently, each block reward is 6.25 BTC

. As such, every 10 minutes, 6.25 BTC enters the circulating supply.

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DISCLAIMER: The content of this newsletter is not financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and do your own research