What Happens to Bitcoin & Coinbase Prices AFTER the ETF.

in this video we're going to discuss the

potential price upside for Bitcoin

following a spot ETF approval what do

you we think that Bitcoin is going to do

we're going to look at standard Charters

research on exactly this not only are we

going to do that but we're also going to

look at what's the potential for

coinbase and how does that differ from

well Bitcoin well let's go ahead and

start with the price projection from

sandard Charter for Bitcoin they see

some substantial price upside upon the

approval of a Bitcoin ETF however it

could take some time so it might not be

an immediate upside they do though they

see this as a watershed moment for

normalizing Bitcoin participation by

institutional money and we expect

approval to drive significant inflows

and the price of Bitcoin now we'll talk

about exactly how long and and priceing

that but let's understand For a Moment

coinbase already represents a lot of

institutional flow as as well as

companies like binance for Bitcoin

trading so I personally do think it's

very exciting that they mention hey we

can get even more

institutionalsales over

95% of the trading activity on coinbase

is

institutional but over 95% of the

revenue at coinbase from Trading comes

from retail so in other words wait like

what institutions are already trading a

lot it's just retails getting ripped off

if you're trading a lot remember there

are like institutional Pro accounts you

can sign up for plac like coinbase and

lower your fees a lot

but anyway that's how coinbase makes a

lot of money so coinbase might not want

that advertise too much but oh well so

what do they say here well they Standard

Charter Compares Bitcoin in the Bitcoin

approval to the first gold-based

exchange traded product and they argue

that after the first gold-based uh

exchange traded product was approved in

November of 2024 here the price of gold

rose

4.3x in the next 7 to 8 years

now I think it's worth adding some

context to that 7 to8 years if we had an

approval in

2004 well what happened in the next 8

years well just four years later you got

the Great Recession which crushed

everybody's impression of how important

uh real estate or stock exposure was and

a lot of people flocked to Gold so there

is a counterargument here that that you

know 7 to eight years after the ETP

Holdings uh matured so to speak could

have been driven by the Great Recession

and a flight to gold now they don't

actually mention that in their analysis

here so I'm a little bit disappointed by

Standard Charter I have to say this is

their Global Research piece here the

fact that they didn't mention that as a

potential reason driving investments

into gold surprised me keep in mind also

that gold is substantially harder to

hold like physically hold than Bitcoin

any of us can hold crypto on our own

Hardware wallet at home right now and

hopefully you have copies of it and you

don't lose hundreds of millions of

dollars of it in a dumpster or you

forget your password and you've got a

few tries left before it all self

encrypts and you lose access to

hopefully you're being smart about how

you're self- custody in crypto but let's

just put it this way it's a lot easier

depending on how much you want to buy

it's a lot easier to self store a USB

drive than it is a lot of gold yes I

know we could throw a few coins into uh

one safe but let's also be real you

can't make copies of that gold right so

you could have multiple USB drives

safety deposit box home another location

parents homes friends homes uh safety

deposit box in Switzerland whatever

right like you can self- custody your

own cryptocurrency very easily but gold

is very difficult travel across borders

with it over $10,000 in value you get in

trouble you potentially get it Seas uh

it's heavy it's dangerous to store it's

very subject to theft there are a lot of

problems with with gold that you can

avoid with Bitcoin and so the reason I

make that argument is it's also a little

bit of a counterargument that maybe one

of the reasons so much money flowed into

a gold e Exchange Trade product ETF

basically uh is is is because uh it was

so much easier now to access gold

whereas really how much easier is it

becoming now to trade

Bitcoin

arguably slightly easier you can swipe

off on Robin Hood which wow you've kind

of been able to do that uh so somebody

else is still custody your coins it's

still not your uh keys not your crypto

the only difference now is when you have

an ETF approved you actually get cpic

insurance which is sipc insurance

covering your Bitcoin investment right

so that's good so we we like that

because now if your brokerage gets you

know uh goes kaput or whatever uh you

you have a claim to be able to get some

of your money back remember you get

coverage of up to $500,000 on Securities

so let's say you're Allin Bitcoin and

it's all in in an ETF you actually have

insurance in case that broker goes

bankrupt which was not true during the

days of course of like you know FTX for

example okay so to gauge how big of a

driver it might be they compare to the

previous ETP now uh they also calculate

how many Bitcoin they think will need to

be created to sit uh to basically

underly ETF shares they don't

counterbalance this though with how many

Bitcoin are going to go from existing uh

right uh like how much existing demand

there is that is now going to move to

the ETF now that's a little complicated

so I'm just going to draw that out a

little bit because again I'm a little

weirded out that you know I mean I'd

like to just be able to shout out like

hey it's going to go 4.3x but like some

of the mitigating factors here I don't

think they really mention so we can

easily make the argument like they did

here that look we're going to need to

create at least uh or have access to

400,000 Bitcoin very quickly to uh to

you know underly all of the ETF Products

that come out uh with with a B BTC

approval okay well so multiply that by

you know the $45,000 we're trading at

right now uh and so that gets us

obviously a very very long number that I

have to pause here for a moment just put

a bunch of commas between it looks like

we're in the billions yeah we're at $8

billion so that's $18 billion that's you

know probably on the relatively low side

for ETF inflows but the point is if the

ETF demand let's go extreme okay it is

possible that that $18 billion of

Bitcoin goes from just trading on the

chain to going 100% to the ETF shares

which basically mean that 400k will just

sit at you know coinbase or whatever and

the ETF shares get traded so the same

400k just goes somewhere else because

the trading volume goes to the ETF as

opposed

to bit like the actual Bitcoin

blockchain so understand For a Moment

how that would look okay so let's say

you're for example uh an ETF provider

okay you're going to make your own ETF

so we're going to say this is the uh

subscriber uh ETF and and this is your

own ETF and you have $18 billion and and

you're like yeah we're going to we're

going to put this $18 billion onto a

hardware wallet and we're going to be

known as the custodian custodian just

means you're looking after something

kind of like a custodian at a school

they look after something you're looking

after in this case with a Bitcoin on a

hardware wallet and presumably you have

insurance there's a cic insurance not on

this the cpic insurance isn't on on this

custody right here but what is it

actually on well it's on these like fake

shares that are created there's this ETF

process called create and redeem and

basically they just create shares out of

thin air uh you know let's call it the S

well that sounds like short so we'll

call it the subb there we go the

subscriber Bitcoin ETF shares right so

that's your ticker symbol and then if

you have $18

billion of Bitcoin let's say your Shares

are trading for $18 billion a share well

then you have 18 shares outstanding at

18 uh or sorry at at $1

billion okay so you just created paper

basically to represent what is on that

Hardware wallet and then these shares

can be traded freely on like interactive

brokers or uh you know um whatever TDM a

trade Fidelity whatever so this is

really interesting because this part is

what's cpic and ured not the the

underlying though of course that is

expected to have its own uh stringent

requirements and and underlying

requirements and so on so forth okay

good

so now the argument here is Standard

Charter says oh we're going to need so

much more Bitcoin to actually support

these ETFs uh and as a result they

compare to that 4.3x we got with gold oh

and also remember in the 15 minutes

after bitcoin's ETF was first approved

we saw it rise and then drop about $700

from where it was before the Hacked

release of the Bitcoin ETF uh based on

the you know the sec's Twitter account

being hacked whatever okay we're not

going to make a video here about whether

it was hacked or not it could have been

BS it could have been to sample what

would happen with the market it could

have been insiders it could have been a

whole lot of BS okay it doesn't really

matter but the point is price actually

went down $700 net net after in that 15

minutes after the leak before the SEC

said it was a hack and then pric has

just sort of stabilized it so really

weird but watch coinbase I think

coinbase's stock is going to go down

we'll explain why in this video but it

is possible a lot of that same demand

just goes to ETF shares and then you

actually don't have demand for the

Bitcoin on the blockchain right keep

that in mind when you're trading these

shares you're you're either trading here

which is the underlying Bitcoin on

blockchain or you're trading here which

is not on the Chain right this is not on

chain this would be when it moves which

when it's custody it might never move

this would be uh you know

onchain okay great so Standard Charter

basically says we could go up as high as

4.3x but let's keep going here just sort

of their bottom line so their more base

case is that we'll probably end up

seeing a

2.3x uh up to a 4X during the year that

Bitcoin a Bitcoin ETF is approved uh if

it's similar to Gold I person think

there's some mitigating circumstances to

that so I do think we could agree with

them Drive institutional demand but I

think they're a little bit uh bullish

maybe a little bit too bullish on how

quickly Bitcoin might move in the first

year now the good news is you've got the

having this year so that could help as

well last time we had that though

stimulus checks were flowing so there's

a question you know are we going to have

as much excitement and Euphoria as we

did in 2020 now who knows Anything Can

Happen of course we could also look at

the prior have uh

havingsex coinbase and you'll see it but

what um I I throw this here for free uh

this is different from like the courses

on building your wealth at meetkevin.com

that's where I teach you

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Investing everything that I know about

building businesses building companies

that's those are the courses I meet

kevin.com most popular one right now is

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course member live streams we do uh

every morning the market is open so what

do we have here spot Bitcoin approval uh

likely within five days I I wrote this

on January 5th okay we already know that

that's old news so coinbase though I

want to look at the coinbase analysis

quickly oh

and what'll actually help us with this

coinbase analysis is understanding the

latest that we're getting with the price

wars in the ETF space now this is wild

the price Wars right now absolutely

crazy everybody is lowering prices on

these Bitcoin ETFs because everybody

wants the custody the idea is the

quicker you get the custody the better

uh you know the the more money your

company will be able to make so for

example you've got

Arc just lowered their fees so they're

in like a price War here they just

lowered their fees to

0.21 bid wise lowered their fee to

.2 undercutting Arc by literally one

basis point uh both of them expect to

use coinbase as a

custodian uh and they'll actually have a

fee waiver for six months or a billion

dollars of assets under management so

for a certain period of time they won't

charge any fee uh and then you can see

the other fees here range from 20 basis

points all the way to 49 basis points

all of it very a lot lower than that

1.5% that grayscale Bitcoin trust had so

this ETF is driving prices down

massively and very very very quickly

which is fascinating okay and I think

that price war will continue I I

honestly think these will end up being

like zero fee products which is probably

what they should be but anyway so uh I I

think that and we wrote this on eack and

you could see all the details here but

basically I think you go to ec.com type

coinbase right but basically I think

that Bitcoin ETFs reduce Bitcoin trading

volumes I mentioned earlier that uh

trading represents 70 well I didn't

mention this part but we talked about

the institutional part but anyway

trading represents 73% of coinbase's

revenues of that 73% 29% represents uh

is is made up by Bitcoin so uh using

2022 percentages if 100% uh percent of

coinbase's trading went to an

ETF uh they and then I multiply here

$674 million of trading revenues times

uh 70 well of revenues times 73% for

trading times 29% for Bitcoin basically

$149 million of Revenue would be lost

per quarter that's an annual loss of

almost half a billion dollars or just

over that would require at about 10

basis points of custody fees about 596

billion of Bitcoin ETF in custody at Co

coinbase to offset that loss so in other

words I'm kind of bearish on coinbase

why because even though they might be

custody Bitcoin I think they're going to

make very little money on that Bitcoin

and that same race to the bottom that

you're seeing in the actual ETFs I think

you're going to see here by Fidelity and

Gemini as well they want to beat up on

coinbase 2 and make them work for their

money so that means coinbase could lose

and and look we know 100% of uh trading

isn't going to go from coinbase to the

ETFs right that's that's obvious we know

that but even if it's 50% well okay

still that's that's a lot that would

lead to a loss of over uh $60 million a

quarter uh of uh of of potential

revenues uh for oh and and of course

assuming the 94% multiplier here for

retail customers even if you only assume

50% of retail trades went to ETFs it

would still cost them $67 million a

quarter

that's with just 50% going to the ETFs

right uh and just assuming the retail

trading goes over to the ETFs that's a

lot of money uh that they would have to

custody just to offset the loss of

Bitcoin trading because remember going

back to that picture that I made

anything that is traded as the share on

the right side that's not on the Chain

you have to be a licensed broker dealer

they call it a BD you have to be a

licensed broker dealer to be able to do

those trades so think Robin Hood TD Mar

trade Fidelity schw whatever right uh

when you're on chain you could be

coinbase but literally what we're doing

here is creating a product that makes it

less desirable for some people a lot of

people will still be on chain but for

some people to trade onchain so they'll

move over to the ease of trading at a

brokerage you know Michael sailor has

called his company a proxy ETF proxy

Bitcoin ETF he could also potentially

see some outflows but his company will

probably mostly be Val valued at

whatever the underlying Bitcoin they

hold is and and so they'll have plenty

of valuation left so anyway this is uh

very interesting in my opinion hopefully

you found uh this very helpful and

interesting if you did consider sharing

it consider subscribing and we'll see

you in the next one thanks so much

goodbye why not advertise these things

that you told us here I feel like nobody

else knows about this we'll we'll try a

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congratulations man you have done so

much people love you people look up to

you Kevin P there financial analyst and

YouTuber meet Kevin always great to get

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