Bitcoin ETFs Are Bleeding, But These 3 Altcoins Are Still Pulling In Cash w/ James Seyffart

**James Seyffart** (0:00)
There's a decent chance that we actually cracked 2 trillion in inflows this year to give you an idea of how big this market is, not just the 16 trillion number. And that's brand new flows, not including asset appreciation or anything. So where is it coming from everywhere?

**John Gillan** (0:11)
Bitcoin ETPs have seen record-breaking outflows, but new crypto ETPs are launching all the time. When will the capital come back, and why are more and more investors choosing ETF products for their crypto investments? Hello and welcome to The Milk Road Show, the podcast that knows that the tide comes in and the tide goes out, but holding Bitcoin will make you see sick. I'm your host, John Gillan. Today is Wednesday, July 1st. We will be releasing this on July 2nd, and today we are joined by James Seyffart. James is a Senior Research Analyst at Bloomberg Intelligence, specializing in ETFs, mutual funds, hedge funds, with a special focus on cryptocurrencies and digital asset products. James is everyone's favorite crypto ETF analyst, and he's going to give us an update on that universe today. If that sounds good to you, make sure you like and subscribe, share this episode with somebody who's going to enjoy it. Today's episode is brought to you by BitGet, Stocks 2 with real liquidity and real dividends. Without further ado, welcome back to The Milk Road Show. James, how are you, sir?

**James Seyffart** (1:05)
I'm good. Thanks for having me back. Happy to be here.

**John Gillan** (1:08)
Are you enjoying the soccer?

**James Seyffart** (1:13)
Yeah, I would say World Cup is probably my favorite sporting event, period. Stop. March Madness is up there, but that's every year, so this takes a little bit of President Olympics too.

**John Gillan** (1:25)
It's a special time for sports in New York, for sure. James, I wanted to start this conversation with a look at the Bitcoin, ETPs, ETFs.
People call them both things, but they're technically exchange-traded products, so I call them ETPs. Anyway, we've seen about $9 billion of net outflows from the peak of these products, and I'm curious your thoughts on this pullback here. Is this just short-term sellers taking some profits or getting out of the market? Is it consolidation? Is it longer-term hands? Like paper handing their bags? What have you seen on these outflows here, and what's your outlook on this for the markets here?

**James Seyffart** (1:59)
Yeah. I mean, it's actually worse than that. We're over 11 from the peak now. So the peak back in October. Yeah. I mean, there's no profits to be had, to be honest, unless you bought these things like when they launched for the most part.
That's being a little aggressive more than it needs to be. But like what we saw here is obviously, they peaked in 10.1 along with everything else. Then we had the de-leveraging event and ADLs and all that stuff.
It kind of bottomed in the end of February. Then we had a nice little uptrend for flows and performance even up until early May. So they peaked at about $63 billion in net inflows since launch, which is tremendous, like the best launch of all time. Then we got down to like 53, 54, went back up to 60 So we almost like reclaimed the all-time high, and now we're below that February level. We're at like just over 51 billion of net inflows. So yeah, I mean, some of it is like the basis trade has completely unwound, and it unwound like many months ago. And it's just, I think if you look at the futures open interest, it's that's going down as well. So it could be some a little bit of the basis trade, but it's mostly people are literally just selling, and this is the worst that the ETFs have seen since they launched. Nothing else is close.

**John Gillan** (3:06)
So that pattern of trading you just described follows pretty closely the path that Bitcoin has taken. So it seems to me like a lot of the flows are tracking pretty closely with the spot price. Do you think that a lot of spot volume has shifted to these ETF products? And do you like, what are your thoughts on that? Why is it tracking so closely as opposed to moving like more independently?

**James Seyffart** (3:27)
So I would say two things. One, no matter what you're doing on a long asset, whether it's an index or a single asset, like for the most part ETFs in general, they tend to see more flows when it's going up and how flows when it's going down, that there is somewhat of a positive relationship.