BTC ETFs Bled $4B in Worst Month Ever, Strategy's Plan Forward and an Institutional Super Cycle for ETH?

**Jennifer Sanasie** (0:00)
On today's Public Keys from the New York Stock Exchange, Bitcoin ETF saw nearly $1.8 billion in outflows last week. Is the Ethereum Foundation headed for a funding crunch? And if so, who steps in? We break down a short against MicroStrategy that's already up more than 40%. Plus, Moody's is embedding credit ratings into tokenized assets, a major step for institutional crypto. All that ahead. I'm Jen Sanasie here with Dave Lavelle. Let's get into it.
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Dave, you are co-hosting with me. It is my favorite show every time you are here.

**Dave Lavelle** (0:48)
It's great to be here. Happy Monday. Let's do it.

**Jennifer Sanasie** (0:51)
Let's do it. Okay, let's start with that $1.8 billion I mentioned at the top.

**Dave Lavelle** (0:55)
I know, mass panic, right?

**Jennifer Sanasie** (0:56)
Mass panic. Last time we had a number that was over a billion dollars, you said we shouldn't actually be panicking. We should be looking at things holistically. Is that still where you sit today?

**Dave Lavelle** (1:05)
Here's the deal. We always think about ETFs as these buy and hold vehicles, but they truly are institutional capital markets vehicles that allow for high quality getting in and getting out for very fast movement of getting access to any asset class in an ETF has exposure to. So, SMB 500, gold, other commodities, currencies, other broad baskets, obviously, the industry sector weights. And Bitcoin is the same. Bitcoin has eclipsed 100 billion in AUM, the total complex. So seeing a billion or two come in and out of the complex is really not that big of a deal.
But if you actually take a step back and kind of try and parse apart institutional use of Bitcoin ETFs and retail use of ETFs, what we've seen is that those kind of lower fee profile products, so maybe Morgan Stanley's product or Grayscale's low fee products, both on the Bitcoin side, BTC and the Ethereum side, ETH, have seen net inflows for this year. What does that tell you? It means that the ETFs are really high quality capital markets tools to kind of get in and out of the exposure while the buy and hold investor are still allocating. I'll remind the viewers and you that these buy and hold allocation products haven't really been totally added to the advisor platforms yet.
And so, you know, I think there's a lot more to come and we're still in the early phases of it. So no panic, everybody, everything's fine.

**Jennifer Sanasie** (2:29)
So the headlines that probably will actually probably have a little bit of a sensational headline on this video. The headlines that ETFs are bleeding are just that sensational. We got to look at the full picture to see that when it comes to crypto ETFs, it's still a positive story.

**Dave Lavelle** (2:44)
Yeah, when you have 80, 90, 100 billion in an asset class and you have a billion coming in or a billion going out, it's really just kind of the ebbs and flows of what we're seeing in the institutional side of things.

**Jennifer Sanasie** (2:52)
The price of Bitcoin this morning, last time I checked, was just under $60,000.
We also had some news come out from MicroStrategy, a new capital plan. Curious how you're looking at Bitcoin as we head into the week and what was your reaction to that MicroStrategy news?

**Dave Lavelle** (3:07)
The MicroStrategy news for me was actually somewhat of a clarifying point because I know there was kind of an overreaction, a little bit of panic. I think it was a couple of weeks ago when MicroStrategy sold, I think, 32 Bitcoin or something like that. Nobody really paid attention to them buying 1,500 Bitcoin the next week. So I think hopefully this is a little bit of clarification to the marketplace that if in fact Strategy sells some Bitcoin in the future that's actually part of their plan and won't shock the market as much as, you know, I think the marketplace thought it did a couple of weeks ago.

**Jennifer Sanasie** (3:38)
That was a complete overreaction. I mean, 32 Bitcoin compared to how much Bitcoin MicroStrategy is holding on its balance sheet. I was kind of shocked that people were panicking the way they were.

**Dave Lavelle** (3:48)
I think people were trying to look for a story and part of my thinking was there was a lot going on at that point in time in market. Obviously, you know, SpaceX was pricing and I think there was kind of taking a little bit of wind, excuse me, taking a little bit of air out of the balloon and maybe a reallocation or a redistribution of individuals' capital to maybe go into SpaceX or other kind of AI related strategies too.