Bitcoin's Path Back to $100K: Joe Sticco on Record ETF Inflows, Index Diversification

Nicole Pedolides (0:01)

Welcome back to The Watchlist. I'm Nicole Pedolides. Time to take a closer look at Bitcoin and Ethereum. Much more on the crypto report. In the past six months, even though I've been moving higher, but over one year, I still have negative numbers. So joining me right now, Joe Sticco, co-founder of Cryptex Finance here with me.

Let's just start. I know you're working on indexes and diversification. There's a lot, not just Bitcoin, but when it comes to Bitcoin, people wanna know, right? When's 100,000? So we had Michael Saylor recently here on the network who said 100,000 in the next 12 months. Where do you think Bitcoin's headed?

Joe Sticco (0:36)

I think Bitcoin winds up a little bit higher than 100K over the next 6 to 12 months. And the reason for that is just because looking at where we are from an institutional standpoint, institutional adoption is just getting started. We had Regulation CTX and Regulation CAM outside of the CFTC over the past couple of weeks. We also have the SEC ruling on their digital assets rule today. Comments are due.

So from an infrastructure and institutional perspective, we're seeing things we've never seen before. So once that bid gets behind the markets, Nicole, I think it's going to take it into the next level of stratosphere.

Nicole Pedolides (1:15)

Yeah, and some of those rules have come through, as you were talking about, right? From the SEC and the CFTC, and we're going to get the Clarity Act. But do these rules actually help with adoption? You said 6 to 12 months, more adoption. Have we seen accelerated adoption? I mean, how do you compare adoption now to the last 6 to 12 months, years? Is it being adopted more quickly?

Joe Sticco (1:37)

I think so, and I think if you look at September ETF inflows into Bitcoin and Ethereum, we saw something like 2.6 billion, 2.65 billion flow in for those months, which is up there with record inflows. Now granted, October did pull back a little bit, but that's just indicative of a little bit of a froth in the market. So we've seen some outflows over the past couple of weeks, but September was a hugely strong month, and I think that this is the beginning of this new trend.

Nicole Pedolides (2:04)

So at this point now, you think it's important to diversify within crypto. How do you do that?

Joe Sticco (2:11)

So indexing has been something that's been on Wall Street for decades.

You have the S&P 500, you have the NASDAQ, but there's still no significant benchmark for digital assets yet. So at Cryptex, we're building the Cryptex Digital Market Cap Index, which is a fully diversified 36 constituent sector stratified index. I know that sounds like a lot of big words, but it's just trying to build the definitive benchmark for the space, that it can track a broad basket of digital assets. And that's what we're working on, and that's what we tried to bring to the marketplace.

Nicole Pedolides (2:42)

Look, it's like the Dow 30, but it's the Crypto 36 Absolutely. I mean, I can handle that.

I like to see what really will be in the, you know, this might be weighted, or, you know, what are the biggest players within that? All right, I'll go with Bitcoin and Ethereum. What else is in there?

Joe Sticco (2:58)

So you have Bitcoin, Ethereum, Solana, XRP, things like Hyperliquid, Cardano, and then, you know, you have some longer tail assets in there that make up the balance of that basket. So, you know, from a basket approach, it is something that we've seen. We've seen fully diversified baskets on Wall Street for years, but in the crypto space, you have a lot of single, you have a lot of index funds or funds claiming to be index funds that are just single spot ETFs dressed up as index funds. That's not what we need. We need diversified, broad-based index funds, and I think that that's something that you see in the space over the next several quarters.

Nicole Pedolides (3:32)

So, something like Hyperliquid, I happen to have it up because I remember reading something about it maybe a month ago, and it actually was hitting a high of about $14.76, but since then, it's pulled back and now it's $9. So, it really has had a 25% sell-off this month, 32% sell-off in one month. I mean, this is not for the faint of heart. Is this now a buying opportunity on this kind of name, if it's down 30% in a month?

Joe Sticco (3:56)

I think it's all the more reason to be diversified, right? So, names are gonna move like that. It is crypto, and crypto is a heavily risk-sensitive asset, which is a tough play if you're just buying individual names. So, when you look at broad-based baskets, or you look at combining a few names together, it does definitely remove some of that risk by holding a broader basket. And yeah, I think overall, hyperliquid is doing an incredible job. Shout out to Jeff and that team. What they're building is remarkable. And I think in the next several months, we're gonna see a nice continuing uptrend in the digital asset space.