Were bitcoin ETFs both the best & worst thing that happened to bitcoin?

00:00 Speaker A

they provided a cushion. It’s a little bit uh stark contrast with what Bernstein, yeah, which is what I wrote about was basically that they’re saying that strategy has been a net buyer, even though you’ve seen some of these sales, they’re still talking about this robust balance sheet. They’ve got 17 months of cash to cover dividends, to cover interest on debt. And what they’re basically saying in this note is that Bitcoin would have been a lot worse off in this spare market if it hadn’t been for strategy backstopping.

00:36 Speaker B

Yeah, that I mean that makes sense.

00:37 Speaker A

And and and that’s that’s basically the the thesis that they’re uh saying. Also even the Bitcoin miners that have been pivoted to AI, it’s been strategy that’s been those the sort of the one that’s been holding the boat afloat, um more than in other drawdowns. But what I will say is that I’ve spoken to strategists, one hedge fund that I spoke to, I spoke to also a whale that had said, it’s not over with Bitcoin. You have not seen the full drawdown yet. I spoke to one whale that said to me, we have not seen capitulation until you have bankruptcies until you really have a big flush out. He said, the whales aren’t coming back in yet. And

01:21 Speaker B

it’s just sort of like this this unpleasant bumping along the bottom.

01:25 Speaker C

I I I read your article yesterday before I knew I’d be talking to you today. And and my thought was they they did themselves what they they did they did what they needed to do, which is to force, you know, sort of push back the inevitable because the way there’s preferreds are structured. Look, you you’re promising to pay a high dividend rate on a preferred share that for, you know, while holding an asset that that, you know, that doesn’t actually yield anything inherently. It’s it’s a non-yielding asset. So what do you do? So you that either works by the price going up or it works by inflows, or you have to sort of sell or or you have to do some sort of financial engineering. In many ways, the ETFs were the best thing to happen to Bitcoin that became the worst thing that happened to Bitcoin because as I I wrote at the time, Bitcoin is for normies now.

02:22 Speaker B

Yes.

02:22 Speaker C

And what happened was all sorts of regular people who never would have bothered to open a crypto-based account could basically go in their brokerage account say, oh, you know, this this thing is a hot asset class. I’ll go buy Ibit or one of the other ETFs and money poured into this. it’s not a sexy play anymore.