Why Strategy Sold Bitcoin, VanEck’s BNB Bet and a $1.7B ETF Exodus

**Jennifer Sanasie** (0:00)
On today's Public Keys at the New York Stock Exchange, Digital Assets Battle, and Unusual Divergence from Equity Markets, the US gets its first BNB ETF, while Bitcoin ETFs bleed $1.7 billion, and was there an overreaction to Strategies Bitcoin sale? I'm Jen Sanasie here with Bloomberg Intelligence Senior Research Analyst, James Seyffart. Let's get into it.
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**James Seyffart** (0:50)
I mean, obviously, I'm just watching what's going on with prices. I mean, we had the exploit or bug found in Zcash. Prices are down pretty bad. We went below 60K for Bitcoin.
But honestly, the number one thing I'm watching this week isn't really crypto related, but it might be impacting crypto prices. That's the SpaceX IPO that's supposed to come this Friday. So that's probably the number one thing I'll be paying attention to. I don't do 100% crypto, so I'll have to be on top of that.

**Jennifer Sanasie** (1:13)
Well, SpaceX IPO, I think everyone is watching that whether you're in crypto or not. But curious how you're looking at it. You think it's going to take capital, take attention away from some of the crypto ETFs, and then crypto even more broadly.

**James Seyffart** (1:26)
Yeah, I mean, there's no denying that anything related to AI or space is taking away interest from crypto. And there's not really an easy way to look like this is how much dollars went that would have gone to potentially Bitcoin or crypto and have gone to AI or space. But right now AI, anything AI, anything space, very hot. And that overlap right now, data centers and space, it's all anyone is talking about in finance.

**Jennifer Sanasie** (1:50)
Yeah, I mean, we talk about not really knowing where capital is gonna flow. I heard me in my intro talk about the fourth consecutive week, where we saw over a billion dollars in outflows in ETFs. We're gonna talk about ETFs a little bit later, but we gotta unpack that $1.7 billion number. We had your colleague Eric on the show last year. He said everyone's kind of overreacting. I'm not last year, last week he said everyone's overreacting to the outflows we're seeing in the Bitcoin ETFs. But what's your perspective?

**James Seyffart** (2:16)
I think that this is mostly an overreaction. I mean, if you look at it, right, from the bottom in spring of 2025 through October, we saw tens of billions of dollars go into the Bitcoin ETFs. A lot of money went into Ethereum ETFs.
It was very strong, right? Then from a 1010, that auto deleveraging event, whatever you want to call it, through the end of February, we bottomed out for ETFs. We had about nine billions that went out. We almost got back to the flat line if you look at cumulative flows in early May of this year. We were very close and then things just turned for the worse. As of Friday, we're actually below that low on the cumulative flows that we hit at the end of February.
I didn't watch the Eric episode, but I'm sure he said something on the lines of ETFs in this category. It's going to grow a couple steps forward and take steps back. It's a good thing. This is how ETFs work. They give you one-to-one exposure and people are going to trade them and people are going to buy them long term. At the end of the day, for the most part, people have stayed put. Yes, like I said, eight, nine billion has come out of these things. We're still at 53, 54 billion that have come into these things since they launched. It's a lot of money.

**Jennifer Sanasie** (3:19)
Derek said something similar. You brought up Zcash. That was a big narrative at the end of last week and heading into this week, there was a bug that was reportedly found, disclosed a counter-fitting bug in the privacy technology.
I want to get your take on how you're looking at that and maybe the broader privacy narrative when you zoom out and you look at the work you're doing.

**James Seyffart** (3:42)
Yes. Right now, there aren't really any privacy coins in ETFs in the US, right? There have been some filed. They haven't launched. We are seeing new things launch every day, though. But from my perspective, I'm just watching to see how much that bug actually matters. Obviously, there's two sides of this right now. And over the long term, the market will decide how impactful that bug is. And if they patched it in time before, there was a bunch of stuff that was exploiting it.