# Institutional Crypto Shifts and the Trillion-Dollar IPO Wave

**Podcast:** The Milk Road Show
**Published:** 2026-06-03

## Transcript

Bitcoin bear markets are not just measured in how far they've gone down.
They're also measured in the length of time.
And we're still pretty sure if you consider the bear market to have begun around that October 10th, start the sell off.
What's up, everybody?
It's LG Doucette here and welcome to the Milk Road Show, the daily crypto show that didn't think we'd get a sequel to Crypto Winter so quick and so soon, but understands that when you live your life a financial quarter at a time.
all you really got at the end of the day is family today is june 3rd 2026.
guys it's been less than 48 hours since i recorded with jamie coots and crypto has taken a major tumble or rather bitcoin has yesterday we woke up to 69 000 and we were later greeted by an even more dire price of almost 65 000.
all this on the heels of michael saylor selling to prop up his dividend which has perhaps started the inevitable cascade we all feared following a months-long rally but today we're actually going to look at the real data of what is going on with bitcoin and all our other dear coins we will talk about etfs hyperliquid and spacex with james seaford senior research analyst at bloomberg today's episode is brought to you by cape the privacy first mobile carrier nexo earn interest borrow and trade crypto and calci where your takes finally pay out James, welcome back, man.
Thanks for having me.
Happy to be here, LG.
Okay, so you get like a front row view of all this kind of stuff, right?
You get to see front and center when there's money moving in and out of these ETFs.
And what I want to know from you is, did you know this was going to happen like last week?
We were going to take another tumble.
Like what has the data been telling you in the last couple of days?
Yeah, no, I had no idea that this was going to happen.
So I wish I could say that I did, but I obviously didn't.
And yeah, I mean, Bitcoin specifically, it started its losing streak or outflow streak, I should say, a couple of weeks ago.
We're on 12 trading days in a row of outflows.
So totaling nearly 4 billion for the US spot Bitcoin ETFs, which is pretty aggressive.
We haven't seen anything quite that bad.
And if this continues, it's going to be a record for outflows.
So you're telling me that we are seeing record outflows from the ETFs right now for Bitcoin or Bitcoin and like ETH, Solana and everything else.
Really, it's just Bitcoin over the last, like I said, I think it's a 12-day streak.
I don't even know if I would call it a record.
I guess like over a 12-day period, it's probably a record.
I haven't done the exact numbers, but we're at 4 billion.
over those 12 days for the most part.
And you go out another week or so and you get to another almost billion, near 5 billion.
So it's not a good look.
But again, we saw 9 billion come out from October through the end of February.
So I mean, these ETFs, I've said this with you guys before.
The way they grow is like, usually it's a few steps forward and then a couple steps back, a few steps forward, a couple steps back.
Right now, we've been in an hour where you've basically just gone sideways from October.
Whatever happened with the auto-deleveraging, October 10th, all of that.
But as you can see, we've kind of been sideways since that October number.
We're obviously down.
We're not quite at the lows where we were at the end of February.
But yeah, it's not looking good.
We were getting close to reaching a new all-time high towards the beginning of May.
And now as we get back.
into June, we're now near the lows of where we were at the end of February.
So yeah, not the greatest low.
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And this, what we're looking at right now, is this specifically Bitcoin?
This is just the Bitcoin ETFs.
Yeah, this is just Bitcoin ETFs.
Okay.
Yeah.
I just want to be clear with that.
Okay.
And is that, is there, you know, I kind of, I said in the intro that maybe this is people realizing that sailor will finally have to sell or something like that.
Is that, if you had to attribute a cause to that, is it the fear of that?
Or is it just, this is the cycle of the market?
What do you think is kind of causing this receding?
So I think you're crazy to say that that didn't have any impact here.
But also if he had sold a little bit when Bitcoin was in a massive uptrend, I don't think it would have even been a blip, right?
All the positive news we could potentially hear about clarity don't matter.
So Bitcoin, it's a very technical asset.
You have people who are technical traders here on here all the time.
We got up near that 200 week moving average, 83, whatever that number is, and we just come going down.
Bitcoin bear markets are not just measured in how far they've gone down.
They're also measured in the length of time.
And we're still pretty sure if you, consider the bear market to have begun around that October 10th start the sell-off.
So it just takes time.
We've been going sideways.
And so I think there's a whole host of reasons why.
This is, it's never really one thing I know.
Like I work at Bloomberg, right?
So we're a media company and I always have reporters like, why is the number down?
Like what is going on?
And it's like very, it's not very nice.
It's not, they don't want to hear like there's more sellers than buyers.
There's, it's often like a cacophony of reasons why something is happening.
And, and Bitcoin is a very momentum driven asset.
And right now momentum for the last few weeks has been downward.
So naturally we're going to see outflows for the Bitcoin ETFs.
But I will say, like, if you look at these flows, we're still at 55 billion in net inflows roughly since these things launched like the bitcoin etf holders and the crypto etf holders in aggregate for the most part they've been diamond hands here like it's it's really like the this call is coming from inside the house from the seller's point of view obviously there is some selling on these etfs but for a lot of it is really you're like no the etfs are just a piece of the pie they're not determining what's going on with price what what do you think okay you're you're right and and maybe i fit into that journalist category of be like why is price up or down please please james tell me um but that is what we want to talk about on the show especially you know uh when things look like this when we have these major moves or pretty sick what feels like a pretty significant move do you based on your experience at least with the bitcoin etfs which are you know um just over three years old here at least in your chart is there a bottom to the selling.
You know what I mean?
Because even what you said is very, that's very important, right?
It's like, listen, there's still 54 billion plus of inflows.
Like that's still a lot of money that's still parked in ETFs for Bitcoin.
So coming down from the top is not huge, but do you think we could go way lower here?
Do you think a lot more Bitcoin is going to flee?
I would be inclined to say no.
I mean, I don't think we're going to see the end of flows, but I don't think we're going to see the flows get cut in half is my gut instinct.
Obviously, I can't know the future.
But what I would say is for the most part, a lot of the fluctuation in inflows and outflows...
A lot of it tended to come from the basis trade.
I don't know if these outflows in particular are from the basis trade, but those tend to be hedge funds that are, it's almost like the funding side of perps.
It's looking at the basis yield.
What they're doing is they're shorting the futures market.
And when these ETFs launched, it was hard to basically get that basis.
The basis, the difference in the price of the future that's going to roll every single month.
and the underlying spot market.
When we're in a roaring bull market, those yields, that basis yields can be north of 10%, and it's virtually risk-free.
So what they'll do is they'll lever up and enter into those trades, and to get the spot side of that trade, right?
Because you have no basis risk, because the Bitcoin ETFs are holding spot, and they're going to settle at whatever the price is of the future at the end of the month.
There's almost a risk-free yield from doing that.
That yield has completely compressed, largely because like...
one the market is in a roaring bull market so you can look at funding rates on perps it's kind of giving you the same idea and so when that goes down to near zero a lot of money comes out so if you look at in like the middle of april funding or the basis yield actually went up so we saw a lot of money come in the other side of it is when you look at the holders of these etfs one those hedge funds that tend to be hotter faster money but like the people that are buying these products from our point of view are likely right sizing it in their portfolio right they're not putting it in like a lot of the listeners here probably who are like hardcore crypto bitcoin believers that have it 50 of their portfolio Most of the people buying the ETF, it's like part of their retirement account or it's just like a two or 5% slug in their investment brokerage account.
They're not putting this in massive portions.
So that's part of the reason why they're able to stay in longer, we think, because people are right sizing it and they understand it, right?
Bitcoin goes through 50 to 70% drawdowns every four years, a lot of times 50% plus intra period.
So like, I think people who came in understood what they're getting themselves into.
But obviously right now, the last couple of weeks really does not look good.
Right.
Okay.
So you're telling me that it's like the people, the people, well, are those people going into the ETFs?
What are the people taking out of the ETFs though?
Who would that be?
Is that still kind of like, is that, is that the same kind of people?
Cause if it's people just stacking for their retirements and that's not really something where they would, they would just actively take things out so quickly, right?
To the two.
Yeah.
So the people taking out.
are almost certainly, like I said, anyone who was doing the basis trade, in April, it became slightly more attractive.
When the money that came in and that spike on that chart you were looking at likely had to do with basis.
Obviously, I'm talking about long-term holders here, advisors and people putting in their client portfolios, they tend to be longer-term holders.
They're not going to hold it, but there's day traders in here.
ETFs are for everyone.
Anyone can use them, right?
So the bulk of it is going to be in people that are more long-term oriented, but there's plenty of trading that's happening, these things all day long, every day, options trading, levered trading, you name it.
So you can't really know exactly who's buying and selling, but we do have the 13F reports, which I do look at.
And the biggest sellers, the Bitcoin ETFs, granted this was through March.
So we don't have the data for the second quarter yet.
We won't have it until I think August, but we We know the data of what institutions held these things and bought and sold through the end of March.
And the biggest sellers were hedge funds.
Advisors did sell a little bit, but for the most part, the biggest sellers for the Bitcoin ETFs were the hedge funds, which is the opposite for Ethereum.
For Ethereum, it was advisors that sold a lot.
Oh, okay.
Interesting.
Do you think the Clarity Act has an impact here?
100%.
I mean, on Bitcoin itself?
Probably not.
It's probably the least impacted.
I think Bitcoin is kind of set in what it is, you know, digital store value.
It's kind of very simple.
When you start getting to DeFi protocols, Ethereum, Solana, all these other things, I think clarity is going to have a major impact.
But if you're just looking for catalysts, like to get us out of like the momentum crushing of a bear market right now, clarity could be something that happens.
I know it's supposed to go up for a vote at the end of the month after.
Juneteenth.
So that could be like a potential positive catalyst if it actually goes through.
Obviously won't be good if it doesn't go through.
But yeah, I think of most people, especially traders, when they think of crypto legislation, I don't know how many of them are thinking like, oh, this is going to be more impactful long term to things like Hyperliquid and Solana and Ethereum versus like crypto.
Bitcoin, good thing to crypto, buy Bitcoin.
So it could be just like a strong catalyst short term for Bitcoin itself.
But overall for the crypto market, anyone saying it's not going to be impactful, I think is just lying to themselves.
Got it.
Maybe we can flip.
I don't know if there's anything else you want to cover on the majors.
I think that's always, you know, you kind of told us a little bit of the basis trade.
I want to flip to something that's doing really well, and we covered it a lot on the show, which is Hyperliquid, which also had a lot of ETFs launch in the last couple of weeks.
You're the overseer of that.
We have Bitwise on the show regularly, and they launch their ETF, which has done well.
And I believe you said that Grayscale is also going live today.
How much do ETFs contribute to something like Hyperliquid, which has exploded?
and been one of the very few green shoots of this year and of honestly, of the last like two months.
Yeah.
I mean, if you look at the green shoots, there's a term that I've seen people throwing around for the four people.
It's Hyperliquid, Zcash, Near, and V.
I'm blanking on the Venice.
Yeah.
But as far as this is going, we don't have a Zcash ETF yet.
We have a BNB ETF that just launched.
And like you mentioned, Hype is the most successful launch of any.
thing that's happened in the near term, right?
So we had 21 shares launch the first product, T-Hype, T-H-Y-P.
bitwise launched a little bit after bhyp i think they're now the largest uh grayscale is coming in with a whole bunch of seed capital they launched today but t-hype and b-hype from bitwise and 21 shares have taken in over 141 million uh just in it's not they're not even really a month old yet so granted compared to the billions that we saw into the bitcoin etfs it doesn't sound that crazy but when you right size it for the market cap of hyper liquid it's actually impactful uh and i think the narrative like one of the problems with eth and some of these other coins the narrative isn't that simple hyper liquid it's still a little complex but you know the the burning mechanism the fact that fees are going back to decrease supply almost like a share buyback program for people in trad fi who understand this i think it's an easy narrative to explain to people who are advisors uh and traditional type investors So I'm very interested to see what happens with these 13F reports that I'll get in August to see who owns those three things, but it'll be very early.
Like we just got in at the end of March, we just got the numbers that change from the end of 2025 for Solana, for example.
And yeah, I mean, I'm expecting the hype numbers to be.
It's good when these things launch, you often see like a spike in volume and then sometimes it pitters off, like it pitter patters away.
And the volume has been strong across both of the products so far.
And I expect Grayscale's product to likely do well as well.
So yeah, this is the best launch I would say in crypto since the Solana and XRP ETFs launch.
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Wow.
Let's just look.
We don't have a chart actually for those, but I think if we can even look at this one, which is for Solana, which is currently sitting, I think, around $1.6 billion.
So to give you context there.
And Hyperliquid's market cap is not.
So that, but their fully diluted value is actually, I think has like briefly surpassed Solana or is kind of sitting there roughly.
And again, they have a lot, they have a huge token supply that they bought back that they don't know, that hasn't been announced what they're going to do with it, right?
So taking off the market, but we don't know what that is yet.
But let's look at even, I think even just look at the timeline, right?
So these Solana ETFs launched, whoa, whoa, whoa, I clicked all the wrong thing, took me to your Bloomberg site.
uh so even like let's look at this timeline right like uh you're saying how much how much are we at for hype etfs 150 million the hype etfs were unique because we had rex osprey which we don't need to get into the weeds they had a way that they were able to launch these products before the official 33x spot products went out so they used like it came in subsidiary they were actually holding spot uh solana alongside like other Solana ETFs that were available in Europe.
So they had like a way of getting stake Solana exposure before the SEC fully approved them because they went through this back doorway, almost similar to how Bitcoin and Ethereum futures ETFs launched long before the spot products.
And then we saw these things launch in October.
Obviously, you can see that ramp up after that first thing I'm pointing out.
And right now, if I told you that this was the flows we're going to look like when this thing is like 60% down since its launch, 70% off the highs, I would never have believed it.
I mean, this thing has taken in over 1.6 billion so far since the first one launched.
And we've taken in 350 million year to date in this like absolutely brutal bear market for ETH price.
I mean, for Solana price.
So yeah, again, this is just showing that like goes back to what I was saying with the Bitcoin ETFs.
These holders, there is no basis trading here.
The basis has been virtually zero.
It's non-existent.
It was never existent because these things launched after the bear market started, as far as I'm concerned.
And we can look at the futures open interest and gauge how much might be happening.
But this is just long-term people putting this into their portfolio at likely right-sized allocations.
They're going in at 1%, 2%, 3% allocation to something like this.
And the other thing I would say is...
Back to those 13F reports, we know what institutions did.
Technically, institutions sold from the end of 2025 into Q1, into March 31st.
But obviously, there was enough retail and other people who don't have to file 13Fs that came in to offset and then sum the sales from institutions.
These numbers, I have a question actually about these numbers.
Even something like this, we're looking at Solana, 1.63 billion.
How is that number, how is that monetary number calculated?
Because as the price of Solana changes, how does that work?
Yeah.
So this is only the dollars going in or out to the products.
So we can check to see basically every single day I look at the net flows and I add it up to each other over time, right?
So these parts are just the net money going in and out.
We're not looking at the price performance because that will alter things.
You can look at AUM over time and that'll go up and down with price because the only way to change AUM is either money going in and out or the value of the underlying going up or down.
This is just pure is money going in or out.
uh and as you can see for the most part more so than any other crypto section right now money has only gone in right okay okay got it so for something like that like solana that's like money isn't even really coming out it's it's the the growth has stagnated a little bit but it hasn't hasn't been removed drastically uh at least not yet or who knows what will happen there um right so even something like hyper liquid is it you know you're kind of noting that it has really outperformed especially from an etf standpoint in like a really brutal bear market um environment especially last couple weeks it's like as you know bitcoin tumbled from 83k down to mid 60s now uh you still have something like hyper liquid outperforming is there any historical precedent for that in crypto or anywhere else where there are etfs for a product that launch and or a company or whatever and even if financial conditions or the conditions of that market are bad that those etfs outperform like that yeah i mean there's always there's i cover the etf industry right as you mentioned and there's always a pocket doing exceptionally well even if it's inverse products in a bear market right uh and a lot of these issuers know what they're doing when they launch these things they're trying to time it you have to file typically 75 days before i mean i can't even tell you how many ai and space related etfs have been filed in the last like five months it is It is unrelenting.
We are seeing tons of launches.
Some of these launches have come out and they already have billions of dollars.
So yeah, I would say the issuers are smart and they kind of go with the spaghetti cannon approach.
So you have a lot of issuers willing to launch a lot of products.
It costs a lot of money to file and launch these things, but if you just get one or two hits, it often pays for other filings and they can build on each other.
So we're in a year of record, likely record flows.
potentially and likely record volume, definitely record filings and record launches.
So like where ETF world is just popping off and there's always bright spots.
And right now, obviously, we mentioned in crypto, the two that I'm mostly focused on is Hype and Zcash, because I think they could get ETFs in the relatively near future.
Well, Hype obviously has one.
Zcash has been filed by a few people.
We just got BNB.
We have another BNB ETF coming out, but that's obviously not doing as well.
But yeah, there's always something bright to cover.
What is the spaghetti cannon approach?
Yeah.
So you just like, so for example, there's tons of like single stock ETFs.
So you just file and launch 50 of them.
And if one of them gets to a couple of billion dollars, it covers the costs of launching all those other ones.
And even if some of the other ones, it's almost like a venture capital, private equity type approach to launching product and investing.
Because like when they are investing in these new startups.
vast majority of them go to zero.
Some of them are okay.
And then like a small percentage of them actually take off and become unicorns, right?
And that's where most of the return comes from.
And over the last few years, that's kind of how ETF issuers have addressed this.
They're much more willing to launch.
And then if there's no success to liquidate, so they're just throwing shit at the wall and seeing what sticks with investors.
And honestly, it's pure capitalism because if there is no interest from investors or brokerages or what have you.
you're going to be losing money.
So like, this is just a way to see like what the market wants and the market will decide ultimately what has value.
So when you say, well, you're describing what you said, you just throw all these ETFs and hopefully some of them get a few billion dollars.
How can you maybe explain how ETFs work to us?
Just for the novice approach is just like when somebody, when they're ETFs launching for a company.
are they involved in that ETF?
Is that what you mean?
Is that like when you're a company and you're like, I would like to see many ETFs launchers, you know?
So even in the case of Hyperliquid, like, okay, so they're not involved.
So Hyperliquid is not, they're not involved with like Bitwise and 21 shares or anybody of those guys doing all this stuff, right?
Well, so.
There's probably foundations and things.
And like I know for a fact, Grayscale, there's some large holders that are helping seed the Grayscale product.
We don't know exact details, but there's usually like some sort of agreement that's made for them to stay in.
But like there's plenty of examples of particularly the crypto side with these firms, VanEck, Bitwise, others who are like.
giving a portion of their fees to help like developers or do things.
I think Bitwise says they're holding hype on their balance sheet actually.
Like, so there's conversations that are happening with developers, but like when we're talking about broader ETF industry, like there's no, they're not every issuer is talking to a company if they're launching a single stock levered version of their ETF or there's, there's ETFs that are inverse versions of other active ETFs, like Cathie Wood's arc, like Tuttle who launched that probably wasn't having a regular conversation with Cathie Wood saying, I'm launching a product.
It's going to short everything you do.
But like there might be some sort of conversation that's going back and forth, but for the most part, these are derivatives based and issuers are just, like I said, they're throwing spaghetti at the wall.
They don't have to talk to anyone theoretically as long as they have the proper things set up.
So do the issuers launch multiple ETFs themselves?
Oh, yeah.
Oh, you mean like, what do you say?
Because you said the spaghetti cannon approach and you said you would go and throw a bunch of ETFs.
I was like, so one company would throw, like would Bitwise throw multiple ETFs for the same product?
So in this case, it would be like Bitwise launching 50 altcoin ETFs like in a couple of weeks, right?
They're being a lot more diligent.
Most of these crypto companies that are launching, they're being a lot more diligent about what they can and can't do.
And part of it is being forced on them by the SEC because like the SEC is going one by one and making sure all the...
The SEC follows the disclosure frameworks.
You need to disclose all the risks.
You need to tell people what could go wrong.
You need to tell people what would have to go right and all these things.
So these prospectus documents are long as hell and they're explaining everything.
There's unique things for every coin, right?
Like Hyperliquid is different than Bitcoin and Ethereum and Solana.
So the SEC isn't allowing these things to launch unless they sign off and all that language.
When you're doing that for a stock, for the most part, all that's already done.
So you can just file tons of them.
We just had one brand new issuer launch, I think 40 ETFs last week, to give you an example.
So there's some theme ETFs, there's some leveraged single stock ETFs, AI, space, you name it.
So a lot of these issuers, like I said, they're just throwing spaghetti at the wall.
And it costs a lot of money.
It's hundreds of thousands of dollars to file and launch these things and hundreds of thousands of dollars to keep them open every single year.
So what makes an attractive ETF?
Let's say I'm going to go, I'm like, I want to launch.
20 ETFs for SpaceX, which we're going to talk about in a second.
In your experience, how do I make that ETF attractive versus what others do?
You know what I mean?
Are there specific features or languages or names or acronyms or something?
What is the trick there to have a successful ETF?
Yeah.
We look at it.
The two real simple ways are being very cheap.
type exposure people like if you're if you're the cheapest you're gonna probably garner interest as long as you don't screw everything else up and shiny We call it shiny object.
If something is performing really well and there's tons of interest, that attracts way more interest and flows that are going to come in.
So cheaper shiny is the real simple way, but also it has to do with brand and marketing.
Like every ETF issuer, particularly on the crypto side, they're not all doing the same thing.
Like BlackRock, for example, they've only launched Bitcoin and Ethereum, haven't filed for anything else in the crypto space.
They're very diligent.
They're like, we are the grown up in the room.
We are focused on these two protocols.
There are other ways to do it that are like more crypto native.
uh you know you have bitwise that i would consider there vanek kind of straddles that line a little bit you have coin shares that are very specific going into these things so i don't want to rattle off all these different issuers but like marketing and brand matters too but the real two big things are like you're hoping you strike it hot right like if you're launching a single stock etf or a coin you're hoping that that coin is going to take off and you're going to be one of the only options in the etf world for you to benefit from um but but another one is just capitalizing what the media is talking about you mentioned spacex i i last i counted there was 23 filings for spacex related etfs whether it's like levered covered call all these different things come with a couple of them were 3x levered which the sec isn't going to allow so i would say there's 21 etfs that realistically could launch solely around the ipo of spacex which hasn't even happened so these guys filed these products three months ago there's filings for open ai anthropic like it's a cutthroat industry we call it the jungle for a reason um but yeah they're throwing spaghetti at the ball so anything to capture some of that inflow Right?
Like that's basically like, you're like, this is going to be the biggest IPO ever.
And we just, we'll do anything.
We'll spend millions of dollars just to try and capture some of that.
Right?
Yes.
And it'll be worth it for them to get, you know.
yeah however much they're targeting and etfs also tend to follow the lindy effect too right so if you get out and you are like even if you're losing a little bit of money but you have enough assets that you're not losing much and you can stick around and like that shiny object moments like you can start earning more money and then all of a sudden it starts being profitable longer term so like there's like a balance between knowing when to cut your losers and also knowing like this is a good idea that will eventually have its time in the sun and you want to stick around for it it's it's i mean it's pure capitalism is the way i think about it it's fascinating to cover and i'm happy i'm not in there because it can be very very cutthroat got it okay i mean i guess you're happy not you're not in there but this is also what you cover every day so you're like the ufc commentator of the you're really you're like the the rogan or the you know whoever the daniel cormier of uh of the etfs No, exactly.
I'm not the one that's dependent on some fund I'm launching garnering millions of dollars so I can have a paycheck next month.
Of course.
You can't give probably financial projections, but the SpaceX IPO and the subsequent IPOs of the other two major companies that are expected to launch at a trillion plus, which are OpenEye and Anthropic.
We cover this across all our shows.
What is your kind of, what's your take there, James?
Like this is an unprecedented event of having these three companies launch at a cumulative like pre-market of over like $4 trillion, which is insane.
Like that's not, you know, a trillion dollar company didn't even exist like five years ago.
And now you have this.
What do you think is going to happen?
Are they going to be able to sustain that?
Is there going to be a lot of ETF inflows?
What does that look like?
Yeah, I mean.
One, my first comment would be like, we already discussed this as I can't see the future.
So let's start with that.
And I would also say on the stuff we were just talking about, the benefit of all that cutthroatness that happens in this industry is the end investor and the end user.
But as far as SpaceX, OpenAI, Anthropic go, like from my point of view, what I cover, I cover ETFs and index funds and investing.
Like for the most part, we were just talking about all spot products, right?
Spot ETF products.
They're holding one single asset.
I think one of the biggest categories of crypto ETFs is going to be basket products, actively managed products that theoretically, if you had one, you'd be in Zcash and Hype right now and shorting Bitcoin.
But there will be products out there that do that.
But for SpaceX, what's fascinating is all the major indices, the S&P 500, the NASDAQ 100, the FTSE Russell, the FTSE 1000.
um they're changing their rules so they can add these things faster than they otherwise would so the s&p 500 used to have like a 12-month rule um nasdaq i think it was six months it might have been longer there's there's usually these longer time periods but now nasdaq is set to add SpaceX in just 15 days, the Russell just five days after IPO, the S&P 500, the bellwether of them all, as stout a history as you can have, is moving from 12 months to potentially adding within six months.
So all of them are bending their rules for SpaceX, OpenAI, Anthropic.
And this is so controversial in my world.
I can't tell you how many people are debating this and arguing over it.
And I'll just give you the two sides that I would say, and we can get into them however deeply you want.
One of them is like, you're changing decades old rules for these major companies.
Like this is not the way to do things.
Like you're breaking rules to bend, to like get these exposures in.
They're like SpaceX is trading at a 90 plus multiple to sales, which is a crazy people saying it's overvalued.
They don't want it in an index.
It should wait, have to wait longer and all these things.
So that's the one side.
The other side is like, these rules were set up at a time when companies came public at like, 100 million dollars 50 million dollars in market cap right like they're new companies they haven't necessarily completely been proven they want to make sure they settle on the market we're talking about three companies that could likely come to market at over one trillion dollars.
It's not even billions of dollars.
We're talking trillions.
These are going to be some of the largest companies in the world.
So that's the other side.
It's like, maybe the rules should have to change a little bit because if you want the broad market, you can't just not include three of the largest companies in the world at this point.
So there's a give and take there.
I could argue both sides.
The one thing I would say is that aside from Nasdaq, the other major industries, they do something called float adjusted weighting.
So it's not just what's the value of the total company, they look at the value of total tradable shares.
And so these things are going to come out like SpaceX, they're targeting $1.8 trillion valuation, but they're only going to sell $75 billion worth of shares.
So it's a small portion of it.
So like, it's not like it's going to come in and it's going to go into the, these indices at the weighting of one point, whatever trillion, they're going to go in at however many shares they sold.
And like, that'll change and increase over time, potentially as more shares are unlocked.
But yeah, that's, what's going on.
That's what I'm paying attention to.
And like, if you just look at the ETFs and the assets tracking these indices, we're talking about for SpaceX alone, 20 ish billion dollars of that 75 billion that will have to be bought by passive ETFs within six months.
And it could be more.
My God.
You're listening to the Milk Road Show, which means you've got takes.
Strong ones, I bet.
But where do those takes actually go?
Do you tweet them into the void, argue them in the group chat, or do you try to express them by buying a stock?
The thing is, stocks move on like 50 other things at once.
And that's where Calci comes in.
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James, I feel like we're going to have to have you back on our AI show to kind of like inspect this after the SpaceX IPO happens, which is at the end of this month and kind of like...
Break this down for us and kind of tell us what you're seeing.
And even how do these get approved?
Do these ETFs, are they going to get approved in time for the IPO?
Is that how that works?
So the index funds, they track an index.
So they do whatever the index does and they do it.
And they try to trade and do everything as humanly possible to keep in line with the index, right?
So the index, what it does is these, whether it's FTSE Russell, NASDAQ, or the S&P, they go through what are called consultation periods.
And public people and people involved in the company, these indices can comment on whether or not they want to make these changes.
NASDAQ already approved these changes a few weeks ago.
So that's a done deal.
FTSE Russell just got approved, I think last week or the week before.
And the S&P...
Dow Jones, they will announce their decision, I think by June 8th.
So within the next three or four days, whatever, whatever's today's date, five days.
So we'll know by then.
And our expectation is the S&P is going to approve these changes for a lot of those reasons I talked about.
Like it's, it's, it's kind of, it's very different from requiring what they call the seasoning period for, for companies, these large.
So our expectation, it will be approved.
So for two of them, it's a done deal for one of them.
We have a 75 to 80% odds that it's going to be a done deal as well.
James, my last question for you.
And this is a this is very much a hopium question that we have around these parts these days in crypto.
But there is a there is this idea of the rotation back to crypto that people discuss away from AI.
And maybe once these IPOs kind of move through and once there's clarity on clarity one way or another, and, you know, even even as things kind of settle, is that is that a fabled hopium myth or is that something that you think could happen?
I mean, the big concern is like we talked about these multi-trillion dollar IPO's coming.
The big like, if you're just like general consensus concern is which makes me feel like it's not going to happen is like it would just be way too fitting for these three companies to IPO and come to market and for the market to collapse after that because it's so much money that's coming to market and getting unwound.
Uh, and people are going to want to buy it and the people in there are going to be selling.
And it's just a lot of liquidity to absorb.
So I would say one, that would be a concern because no matter what you do in crypto, these things are viewed as a, as a risk asset, right?
Like a lot of us like to talk about Bitcoin as a potential store of value, our hedge against currency debasement.
And no matter what you or I say, uh, or whatever argument I make, um, the market views it as a risk asset.
So that's one thing you have to worry about.
But obviously, um, There are some examples in the crypto world, specifically, like you mentioned, Venice, that's very tied into AI, same with NIR, that are actually holding up pretty well.
But they're obviously the ones that are very different from what's happening from the rest of the market.
I would also say the crypto market, I was at ConsenSys, the crypto conference down in Miami, and things are becoming way more institutionalized.
You have a lot of the big banks there.
You have a lot more people that are more discerning around what they're investing.
And a lot of these tokens and crypto more broadly, there needs to be a a very simple, elegant way to explain how you're earning revenue and what's profitable and not just like we're launching this thing and it's going to be successful because people are going to use it.
There needs to be some mechanism.
Hype is a perfect example with that, with the way that they're burning or at least storing buying back hyperliquid or hype tokens.
So I think there's like this overarching trend of like the industry itself is changing from this retail driven cypherpunk retail mania.
to more institutionalized viewing of investing.
And it's both new entrants coming in and older people who have been in this space changing the way that they're viewing these different assets.
Definitely an evolution and a maturation as well.
James, appreciate your time, man.
Always appreciate the insight and the data.
So thank you for that.
And hopefully we're going to see you again soon, maybe on the other show to talk historic IPOs as they happen.
Yeah, I'd love to come back.
We're in a bear market.
And like I said, bear market, it's in price and time.
And we're only, you know, we're not even six months in, I don't think.
So, or no, we're just about seven months in.
So give it some time.
We're keeping the lights on here, man.
We're doing our job.
So good to see you, man.
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