Bitcoin Whales Accumulate At Record Numbers! What Do They Know?

**Scott Melker** (0:00)
Bitcoin whales are accumulating at record numbers. 270,000 Bitcoin alone in the last 30 days. This is the highest rate since 2013
What do they know? They must know something that we don't know, right? They have to be trading on insider information. There's no way it's just a bunch of guys buying Bitcoin randomly. Either way, we're gonna unpack that and everything else happening in the market with Bloomberg's own Eric Balchunas. Let's get it.
What is up, everybody? Welcome to the show and to the islands, mon. As you can see, I'm here in the islands. It's not at all fake, it just glitched a little bit, actually. And the plants were moving earlier, they're not now, and the waves are moving, and they're not now. I love AI, it's awesome. Good morning, Eric.

**Eric Balchunas** (1:01)
Good morning, how are you?

**Scott Melker** (1:01)
I think you rolled up your sleeves to get ready for this.

**Eric Balchunas** (1:04)
Yeah, it's warm here. I'm in Philly, and it's a heat wave coming today.

**Scott Melker** (1:09)
I thought it was still winter there, so that's good for you.

**Eric Balchunas** (1:12)
It was like two weeks ago.

**Scott Melker** (1:13)
Yeah, it happens fast. I lived in Philly for eight and a half years, and one day it's just spring, but then it's winter again, and then it's spring again. So let's talk ETFs and Bitcoin because there's been a hell of a lot going on, and because of, I don't know, things like wars and clarity acts and thing, maybe people aren't paying attention. I've been kind of harping on this one, Goldman Bitcoin ETF push signals, Wall Street's Tavia Crypto. So A, I love this title, the headline.
I wouldn't have framed it that way necessarily, but Goldman has proposed a income Bitcoin ETF. So this is obviously a new kind of financial product in line with what BlackRock has proposed, where effectively they're going to sell options against the underlying position in the ETFs where you can earn a yield, and I guess your upside is a bit more capped than just buying Bitcoin. But I mean, Goldman Sachs, man, I haven't heard their name in the conversation before this.

**Eric Balchunas** (2:08)
Yeah, it was a shocker. I have kind of three phases, expected, semi-shock, and full shocker. This was a full shocker. I just figured JP Morgan and Goldman were two firms that were going to mostly set out the ETF thing and Vanguard. So Goldman has been really doing more vanilla products, and I just didn't think they would want their brand, but the world has turned. I think two things happened for Goldman. And I have a note coming out tomorrow on this. Number one, they saw Morgan Stanley jump in. That is one of their peers. It's different than the buy side. This is a sell side. So they saw their peers jump in. Number two, the guy running Goldman's ETF business is named Brian Lake. Brian Lake is very dynamic ETF veteran.
He used to work at JP Morgan, and he's the one who really masterminded JEPI, which is the equity premium income that is now the biggest active ETF in the world, at like 43 billion.
So he kind of invented this sort of covered call movement in a way. And I think he was looking at the landscape and saw that, well, the spot area is pretty crowded and it's tough to complete with BlackRock, but in the covered call area, there's like five products, but they have almost no assets. So here's an opportunity to sort of like take our more conservative clients who might not even be interested in Bitcoin. But I looked at one of the premium income ETFs on Bitcoin, and here's the numbers.
80% yield and an 11% annual return. If you told a regular investor that that's what that gives without saying Bitcoin, they might be like, sign me up yesterday.
Now, you do give up upside, but again, conservative goals might be into it. And as Nate Dracy said, it's like training wheels for Bitcoin. But I think they looked at all this and said, how we can do it our way. And I think that's why they dove in.

**Scott Melker** (4:09)
Yeah, I mean, this comes on the heels of BlackRock announcing a similar product, right, BITA, which probably also had something to do with them jumping into the market. As you said, this spot space is crowded, but now it can be effectively just them and BlackRock and whoever gets there faster maybe can capture the flows into this idea. And of course, as you said, they definitely watched Morgan Stanley, which I think we all know, right? I thought that was the article there. It is not. There it is. The cheapest Bitcoin ETF yet, Morgan Stanley uses working BIP speed to draw a hundred million in first week. So like these flows were good, right? But Morgan Stanley, it's more the signal that Morgan Stanley, as you said, they're on the other side. They're a commercial bank. They're not generally an ETF issuer, but they decided there were still enough, I guess, water to squeeze from the rock of spot ETFs to launch their own.