Eric Balchunas

Bitcoin ETFs have shown remarkable stickiness despite a 50% price drawdown, with cumulative net flows only slightly off their high water mark of $63B at $57B. This durability is unusual for a volatile asset and resembles S&P 500 ETF flow behavior, indicating strong holder conviction and a base of patient capital. If price recovers, flows should quickly rebound. The rapid accumulation to $100B in 18 months, even if flat thereafter, would still be the fastest ETF to $50B, underscoring how exceptional the flows have been.

Institutional issuers (like BlackRock) continue to build products on Ethereum, and it captures the "serious big fish business" despite competition from faster chains. While Layer 2 narratives are complex, Ethereum remains the "legitimate second" to Bitcoin. It is effectively the "Blue Chip" tech stock of the crypto world, distinct from Bitcoin's "digital gold" narrative. Long Ethereum ETFs as the winner of the institutional smart contract wars. Technological obsolescence if Solana or other chains successfully flip Ethereum on transaction volume and developer activity.

HYPE ETFs are the hot new story in crypto, with strong and increasing trading volume, compelling tokenomics (token holders benefit from fee buybacks), and a clear narrative. The product has shown rare post-launch acceleration and is a much-needed positive catalyst for the broader crypto market.

The S&P 500 is the ultimate winner from AI disruption because incumbent companies will adapt and incorporate AI, just as old-economy companies successfully adapted to e-commerce. Market-cap-weighted indexing captures these adaptations, making broad U.S. equity exposure the best way to benefit.

USO (oil futures ETF) suffers from significant roll costs that can reach 30% annually, making it a poor vehicle for oil exposure. Instead, use XLE (energy sector equities), which avoids futures roll issues and provides a more direct equity-based play on oil prices, especially through refiners.

Japan is seeing renewed inflows and political momentum under a new Prime Minister. The Yen has weakened (currency wars), historically a trigger for Japanese equity rallies (similar to 2012). While the index (Nikkei) is near highs, the "value compression" has been massive. The opportunity is not in the broad index (which holds dead-weight nationalized companies) but in active selection of manufacturing and global exporters benefiting from the weak Yen. LONG. Japan is "having a moment" with structural reform and currency tailwinds aligning. Global trade war/tariffs (Trump mentioned 15% tariffs) hurting Japanese exporters.

Japan is seeing renewed inflows and political momentum under a new Prime Minister. The Yen has weakened (currency wars), historically a trigger for Japanese equity rallies (similar to 2012). While the index (Nikkei) is near highs, the "value compression" has been massive. The opportunity is not in the broad index (which holds dead-weight nationalized companies) but in active selection of manufacturing and global exporters benefiting from the weak Yen. LONG. Japan is "having a moment" with structural reform and currency tailwinds aligning. Global trade war/tariffs (Trump mentioned 15% tariffs) hurting Japanese exporters.

GLD (Gold ETF) is 22 years old and once suffered a 40% drawdown over 6 months, yet recovered to hit all-time highs and attract $30B in inflows. History suggests that "store of value" assets endure severe drawdowns as part of their lifecycle. If Bitcoin is "Teenager Gold," Gold is the mature blueprint. It remains the primary zero-correlation asset for portfolio diversification. Long GLD as the proven, lower-volatility hedge that Bitcoin is aspiring to become. Rising real rates or a "risk-on" environment where zero-yield assets are dumped for equities.