Yesterday in the White House representatives from JPMorgan, Bank of America, Wells Fargo are sitting across from reps from Coinbase, Circle and Tether.
The fact of the matter is that both banks and crypto companies want to get the CLARITY Act passed but banks are hung up on majorly on stabelcoins.
The fight?
Whether stablecoin issuers should be allowed to offer yield to holders.
Banks say absolutely not as they fear that their customers would pull deposits out of the traditional banking system.
Crypto companies say banning yield kills innovation and competition.
The White House has set an end-of-February deadline to find compromise language. but whether they hit it or not, the trajectory is clear.
No one in that room is bothered by Bitcoin and in fact, everyone in that room is supporting Bitcoin based products because they’re so popular in the market.
Five years ago, Jamie Dimon called Bitcoin a fraud and now his bank is negotiating the rules of the crypto economy with the people building it.
Banks believe that this could be the end of their businesses as they know it because they kept the yield for all of these years and now crypto companies have a way to give it back to the people.
Also banks could just… you know… come up with better products themselves.
What a novel idea.
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Who’s REALLY Selling Bitcoin? (It’s Not Who You Think)
Bitwise CIO Matt Hougan went on CNBC this week and dropped something that should change how you think about this entire bear market.
Bitcoin is down 45%+ from its October peak and spot crypto fund AUM (Assets Under Management) has dropped to $130 billion.
Roughly 40% of Bitcoin ETF holders would need a 50% recovery just to break even. Sounds terrible, right?
Well let’s not forget what Charlie Munger, Warren Buffett’s trading partner said in moments like this.
“If you’re not will to react with equanimity to a market price decline of 50%, you’re not fit to be a common shareholder, and you deserve the mediocre result you are going to get.”
He also called Bitcoin “rat poison squared” so it’s like having a family member who’s a jerk to you about the things that you like but would also be the first to bail you out of trouble and not say a single world to your parents.
You take the good with the bad.
Anyway here’s what the data actually shows.
Net outflows from Bitcoin ETFs?
About $7 billion total on $130 billion in assets which is roughly 5%.
So the massive decline in AUM isn’t from people selling. It’s from the price dropping.
Those are two very different things.
So who IS selling?
It seems to be the long-term original crypto holders.
The OGs who built positions over 15 years and are trimming and taking profits they’ve waited over a decade to realize.
And who’s buying? Financial advisor channels.
The wealth managers at Morgan Stanley, Merrill Lynch, Wells Fargo, and UBS... all four of which now allow Bitcoin ETF exposure... are quietly accumulating on behalf of their clients.
Hougan described it perfectly: “Two different markets inside the same product.”
Fast money trading the next month is exiting and long-term allocators investing over 4-5 years are entering.
It’s a necessary evolution of the Bitcoin space and your Google’s, Facebooks and Amazon’s of the world went through the exact same thing.
Wealth transferring from early adopters cashing out to institutional money building positions. And when Morgan Stanley launches its own branded Bitcoin ETF, which it’s already filed to do then that transfer accelerates.
This is what the path to seven figures looks like. Not a straight line up. A rotation from one generation of holders to the next. Each one bigger than the last.
What The Bears Are Missing
Step back and look at what happened in a single week.
The three biggest banks in America sat at the White House negotiating crypto rules with the three biggest crypto companies. The data shows that Bitcoin’s 45% decline isn’t institutional flight... it’s a generational wealth transfer from early holders to advisor-driven capital.
This is what the bears can’t see.
They look at the price chart and see a crash.
I look at the infrastructure being built underneath and see the foundation for something much bigger.
The bear market will end. They always do.
But the institutions, the infrastructure, and the adoption happening right now? Those don’t reverse.
Stay sharp. Stay patient. And stay on the right side of the transfer.
Anthony
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