ETF adoption set to keep driving bitcoin price: 10T’s Dan Tapiero

What’s the biggest macro driver of crypto prices in the near term?

Moderator Noelle Acheson posed this question to 10T Holdings founder Dan Tapiero during the first panel discussion at Day 3 of Blockworks’ Digital Asset Summit in London.

Tapiero warned his answer might be “boring,” but he said it was easy: the ETFs.

The Securities Exchange Commission cleared 10 US spot bitcoin funds to start trading on Jan. 11. The funds have so far tallied $11.6 billion of net inflows in their first 10 weeks on the market.

“You’ve onboarded literally tens of trillions of dollars in value sitting in global equity accounts that can now just push a button and own bitcoin,” Tapiero said. “It’s as if Coinbase in effect overnight added 100 million [users] … and I think it’s a very powerful trend; it’s the first inning of it.”

Despite the fund category’s success, bitcoin ETFs endured net outflows on Monday and Tuesday, including a record $326 million of bleeding yesterday, according to BitMEX Research data.

The consecutive days of outflows — occurring for the first time since Jan. 24 and Jan. 25 — comes as bitcoin’s price dipped to around $61,000 on Tuesday, which is more than 15% off BTC’s all-time high of more than $73,000 reached the week prior.

Industry watchers have said that while initial demand for the funds has been from retail investors and registered investment advisers (RIAs), wirehouses and other platforms are set to start clearing these products for clients in the coming weeks and months.

“We haven’t seen anything that’s been so concentrated from the demand side,” Tapiero said. “There’s like a little bridge and the entire US wealth management world is trying to cross this little bridge into the new world.”

SkyBridge Capital founder Anthony Scaramucci, who joined Tapiero on the discussion, noted that his company sent $10 million to BlackRock in late 2022 — capital meant to ultimately become a position in what was later launched as the iShares Bitcoin Trust (IBIT).

The investment came after Scaramucci said he had a conversation with BlackRock CEO Larry Fink, who at the time was bearish on bitcoin as an asset. The executive’s tune has since changed.

“I’m not patting ourselves on the back, I’m just telling you it was the bottom of the market, nobody wanted it and BlackRock was defensive,” Scaramucci said. “It is the largest ETF launch in the history of [ETFs].”

IBIT’s net inflows total about $13 billion since launching on Jan. 11. It was the second-largest spot bitcoin ETF — with about $15.4 billion in assets under management as of market close Tuesday.

The BlackRock fund trails only the Grayscale Bitcoin Trust ETF (GBTC), which manages about $23 billion. GBTC ported over about $28 billion in existing assets when it converted to an ETF in January.

The impact of ETFs on bitcoin could soon bleed over into the segment’s second-largest asset: ether. The SEC is set to rule on proposed ETFs that would hold ETH by May 23.

Tapiero and Scaramucci agreed that while the timeline on those products is unclear, those approvals are coming.

“Maybe by the end of the year, but very unlikely in May,” Scaramucci said. “It has to happen, but [Gensler’s] going to do things to delay it.”

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.