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🥜 Smart Money
PLUS: Inflow streak hits two
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GM to all you crypto nuts. Crypto Nutshell #417 crashin’ in… 🦖🥜
We're the crypto newsletter that's more adventurous than a quest for a lost city. 🌆🗺️
What we’ve cooked up for you today…
📈 This would be a disaster
🧠 Is smart money still buying?
🤑 Make that two
💰 And more…
MARKET WATCH ⚖️
Prices as at 4:10am ET
Only the top 20 coins measured by market cap feature in this section
THIS WOULD BE A DISASTER 🏦
BREAKING: SEC Chair Gary Gensler is being considered for Treasury Secretary
Here’s an interesting one for you…
According to “sources”, Gary Gensler is likely to be nominated as Treasury Secretary if Kamala Harris wins the presidential election.
This claim was made by a recent article published by the Washington Reporter:
“Multiple senior Senate staffers are telling the Washington Reporter that if Vice President Kamala Harris wins in November, she plans to nominate Gensler as her Treasury Secretary.”
Keep in mind, these sources are anonymous…
Gensler was appointed SEC Chairman in 2021 by Joe Biden and has since earned the reputation crypto’s number one enemy.
Under Gensler, the SEC raised numerous lawsuits against some the leading companies in the industry, including:
Coinbase
Kraken
Uniswap
But, to be fair to Gensler…
The SEC did finally approve the Bitcoin and Ethereum ETFs under his control. (The crypto industry has been waiting on these for 10+ years)
However, due to the anonymous sources, many are skeptical of this article.
Caitlin Long, CEO of Custodia Bank, posted to Twitter stating that the claims made in the article are false.
And interestingly, one of Caitlin’s sources believes Gensler himself is the source for the original article. 🤨
Would Gensler plant this information himself?
ETF analyst Eric Balchunas also weighed in on the situation:
Perhaps this article was planned fear mongering from the republican party…
But if it is true…
It could possibly be the end of crypto in the US…
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IS SMART MONEY STILL BUYING? 🧠
There’s one factor in crypto that is far more important than anything else.
It’s more important than the results of the U.S election in November.
It’s more important than any crypto legislation.
The most important factor in crypto is whether or not smart money is still buying Bitcoin.
And that’s exactly what Matt Hougan broke down in his latest update.
Matt Hougan is the Chief Investment Officer at Bitwise, which currently has the 5th largest Bitcoin ETF.
When it comes to if smart money is still buying, (institutions, sophisticated investors) Matt’s knows better than anybody.
In his analysis, Matt had 3 takeaways:
1. Yes, Institutions Are Still Buying Bitcoin
We know that the launch and first quarter of the Bitcoin ETFs were record breaking.
But with the price of Bitcoin falling over the last 3-months, there was no guarantee this would continue.
Many investors thought the volatility may spook institutions away from buying Bitcoin.
However, this was not the case. At all.
Over the last 3 months, the total number of institutional investors buying the Bitcoin ETFs rose from 965 to 1,100. A jump of 14%.
These institutions also increased their share of the Bitcoin ETFs as well, from holding 18.74% to 21.15%.
Even in the face of huge volatility, smart money is still buying.
“In my view, this is a great sign. If institutions will buy bitcoin when prices are volatile, imagine what could happen in a bull market.”
2. The Speed Of Institutional Adoption Is Historic
Another finding Matt found was that the speed of which institutions are buying the Bitcoin ETFs is unprecedented.
This is very obvious when you compare the first 2-quarters of trading of the 10 fastest growing ETFs in history:
As you can see, Bitcoin is on another level.
3. Most ‘Smart Money’ Are Just Dipping Their Toes
Matt’s final takeaway is mind-boggling.
What do you think the average portfolio allocation towards the Bitcoin ETFs is for institutional buyers?
10%?
5%?
Even just 1%?
Nope. The average portfolio allocation was just 0.47%.
At first this figure may seem disappointing. But it’s actually a good thing:
“I find this number highly encouraging.... Many start with 1% or less of their portfolio, but that number tends to rise to 2.5% or even 5% over time.”
Smart money tends to dip their toes into the water and then build their allocation over time.
Matt believes this number will rise to over 1% within the next 12 months and will then continue to rise from there.
So, in the face of all the volatility, is smart money still buying?
Without a doubt. 🧠
MAKE THAT TWO 🤑
The inflow streak is heating up again…
(Although this time it’s starting a little slow)
Last week, Digital asset funds saw net inflows of $30 million.
This brings year-to-date flows to $22.195 billion.
Bitcoin is once again on top in terms of weekly inflows, seeing $42 million for the week.
Ethereum experienced net inflows of $4.2 million, which seems quite low at first glance.
But here’s the thing…
New providers saw $104 million in inflows whilst Grayscale saw $118 million in outflows.
Solana also experienced significant outflows of $38.9 million.
From a regional perspective, things were quite mixed.
The US, Canada and Brazil saw inflows of $62m, $9.2m and $7.2m respectively.
While Switzerland, Hong Kong and Germany all experienced outflows of $29.7m, $14.3m & $6.1m respectively.
Solana’s HUGE outflow last week was definitely a surprise…
As it stands, year-to-date flows for Solana are only at $31 million now.
CoinShares notes that this is likely due to a sharp decline in trading volumes of memecoins, which Solana heavily relies on.
Although last week we only saw total inflows of $30 million…
At least it’s two inflow weeks in a row.
Will this week be bigger?
CRACKING CRYPTO 🥜
Vitalik Buterin transfers $1.05M in ETH to crypto mixer Railgun. Ethereum co-founder Vitalik Buterin shifts $1.05 million in ETH through privacy-focused Railgun mixer.
Young crypto voter affiliation in US swing states split equally. Young crypto-focused voters in battleground states could “tip the scales for either party” in the 2024 US elections, according to research from Coinbase.
Trump's Election Odds Are Not The Dominant Driver of Bitcoin's Price, Data Show. Many crosscurrents influencing prices, such as U.S. monetary policy expectations and supply overhangs, might be responsible for the weak correlation between election odds and BTC prices.
SEC talks with ETF issuers over concerns of Solana being a security preceded Cboe removing 19b-4s. The SEC’s concerns about Solana’s potential status as a security came before the filings — which never reached the Federal Register — were removed.
WHAT WE’RE READING 📚
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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”)
Who wrote Ethereum's Yellow Paper, which serves as the formal definition of the Ethereum protocol. |
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: C) Gavin Wood 🥳
The Yellow Paper is a formal definition of the Ethereum protocol, originally by Gavin Wood.
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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.
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