Bitcoin Year-End Price Revealed: $500 Billion 401k Flood Incoming | Adrian Fritz
Summary
Bitcoin Price Forecast: 21 Shares predicts Bitcoin could reach $138,500 by year-end, driven by institutional inflows and macroeconomic trends.
Institutional Adoption: Increasing interest from pension funds and state funds in the US is contributing to Bitcoin's growth, with ETFs serving as a gateway for institutional investors.
Regulatory Impact: Recent regulatory changes, including a US executive order allowing 401ks to allocate into crypto, are expected to drive long-term demand for Bitcoin.
Supply Dynamics: A potential supply shock is anticipated as long-term holders retain their Bitcoin, while new supply remains limited.
Ethereum Market Dynamics: Despite a recent price surge, Ethereum's growth has been slower due to structural and narrative challenges compared to Bitcoin.
ETF Product Strategy: 21 Shares focuses on expanding its ETF offerings and educating investors, leveraging its experience in the European market to compete globally.
Investment Misconceptions: Bitcoin's volatility is often overstated, with its risk profile becoming more comparable to traditional tech stocks.
Future Vision: 21 Shares aims to become a leading crypto ETF issuer by expanding its product range and market presence, particularly in the US.
Transcript
we see bigger players starting to take a look at Bitcoin. We get more and more news from pension funds, state funds in the US that start allocating into Bitcoin. We expect higher prices. Um, but we do believe until end of the year it will be close to 140K. Bitcoin is on the verge of a breakout and can surpass new all-time highs by year end. And like prior bull cycles, this one is driven by deep forces within the institutional flow cycle and space. We'll be talking about what this means for not just Bitcoin, but the overall crypto landscape, what it means for uh investors looking to adopt cryptos, Bitcoin and other alts alike, and what regulatory changes could mean for your retirement. 21 Shares. Joins us today uh on this program is Adrien Fritz, global head of research at 21 Shares. Welcome to the show, Adrien. Good to see you. Thanks for having me, David. Let's talk about your firm's outlook on Bitcoin, your firm's outlook on Ethereum, and all the forces that may drive ETF adoption, uh, which is what, uh, your firm 21 shares does, which is package, uh, ETFs together for investors, uh, who may not be able to buy the underlying. We'll talk about, uh, that space in just a second, but let's take a look at your forecast here. 21 shares forecast it could reach 138,500 by year end. We're talking about Bitcoin. Unlike previous bull runs fueled by retail mania, this cycle was this rally is rigid and powerful long-term forces, deep pocketed institutional inflows, favorable macro trends, and an unprecedented supply crunch. And then I'll leave this chart here for you to comment on. I my my first reaction to this is that yes, this is a breakout, but it's not as bullish, quote unquote, bullish as some of the other estimates I've heard this year. Um, you are leaning actually more towards the conservative side when it comes to a bullish forecast. Why? That's 100% correct. I mean, just as a disclaimer, that's from our market outlook from December last year. Um, that's where we already put out like 138K. Um, but we do stick to it. Um, of course, Bitcoin grew tremendously in market cap over the last 12, 18 months. Uh, and it takes much more um to, yeah, move prices higher. Um, of course there are a lot of regulatory changes, um, a lot of macro changes and in general just a lot of structural tailwinds. Um, for that reason, we expect higher prices. Um but we do believe until end of the year it will be close to 140k and as you said obviously we are we're a bit more conservative but by the end of the day we still expect more upside. Well if you say that this report was released sometime late last year you know you're the research team here behind this report has been pretty much correct in terms of the direction and almost the scale and magnitude of the climb that they initially projected. as you as you as you remember how Bitcoin reached over 120K and that was just last month. So, we've got six more months to go or five more months to go. Well, let's talk about some of these institutional um adoption, institutional inflows uh that uh was referenced here. Um we know that the Bitcoin ETF that was launched had a significant impact on institutional inflows. What else contributed or could contribute to higher inflows than perhaps previous years? I mean there's a lot going on and it's pretty exciting supply and demand dynamics when it comes to Bitcoin. Um first of all of course macro is important so we have to take into it into account. Um we all expect interest rates to come down in the near future and of course that will fuel investors to go a bit um yeah a bit higher on the risk curve. Um while Bitcoin obviously has characteristics of a riskoff asset, a lot of investors still treat it as a as a risk on play. Um however given that the the macro outlook looks positive. Um that's one catalyst. Secondly, as you said, obviously it is the ETFs. Um, it is a gateway for institutional adoption and Bitcoin over the last yeah one and a half years since beginning last year showcased that there is a lot of interest and it was the most successful ETF launch in history. Um, and it continues to see inflows. Moreover, and that's really important as well, obviously our Bitcoin treasury companies um that been popping up globally, they kind of take the micro strategy playbook um and they adding Bitcoin to their treasury. Um and as we can see, that's that's another factor that um yeah, just um drives up uh the the de demand for Bitcoin. Lastly, and that's where we talk about the supply shock. Um, if we look at long-term holders or let's say people that haven't moved their Bitcoin for the last 6 months, if you look at onchain metrics, that's actually around 14 million Bitcoin haven't moved um in the last 6 months. Um and that kind of showcases that a lot of people especially retail as well they are buying and they are holding on to the asset which is really really important. And of course if we compare the numbers let's not forget Bitcoin is a hardcoded asset. Only 165,000 Bitcoin are coming new into the supply uh on a on a yearly basis. And if we compare that to actually what's been happening over the last 12 months, um that greatly exceeds um the actually the actual supply that is out there and that kind of is that cocktail for a potential uh supply shock. This chart here shows that uh the supply is not meeting demand. newly issued Bitcoin uh up until uh the last 12 months 165,000 and the Bitcoin accumulated by corporates and governments significantly higher than that by a magnitude of three times. Now this trend happened last year and my question is whether or not this trend will continue. Have governments and corporates accumulated enough up until 2025 such that uh this chart may reverse again by 2027? We don't think so. I mean this is basically just the beginning. Um also in regards to institutional adoption um we see bigger players starting to take a look at Bitcoin. Um, of course we get more and more news from uh pension funds or uh state funds in the US that start allocating into Bitcoin, but we're still at the very very beginning. Another big news that we had a couple I think last week or the week before was obviously that uh President Trump he signed an executive order um allowing 401ks to allocate into crypto. um and including Bitcoin and obviously that will be a massive demand driver for the years to come. Well, this article that uh 21 shares published touched on this topic exactly. It does say at the end, it's important to know that this process will take time. Trump's executive order initiates a 6 to 12 month regulatory process before compliant products can be added to retirement plans. Some of the people I've take I've talked to about this issue agree that uh no immediate change to 401ks are expected to happen right away. Do you agree? 100% 100%. It won't happen um from one day to another. It's a stepby-step process. And also when it comes to the inflows um it's more on a consistent basis. We see small allocations at the beginning but on a constant basis. And over the years obviously it it starts accumulating. Um and that's exactly how we uh drew the conclusion here as well where we say it's around 500 billion that flow into 401ks on a yearly basis. Let's say we take a 5% bitcoin allocation um over the next 10 years. That's how we reach the almost 360 or 360 billion in in inflows. But yeah, it will be it will be a slow process but a steady one and that's really important. So Adrian, if I were a pension fund and I just got news that I'm able to invest in Bitcoin into the 401ks that I manage. Well, my question is why would I should I what is the investment thesis here for for adding Bitcoin or any other cryptos into a 401k contribution? I mean, we we we all know the pitch from from from Mic Sailor or other thought leaders in the space. Um, it is a hard asset. Um, and there's no no alternative to Bitcoin when it comes to an a hard asset like uh like Bitcoin. It is a hedge against economic uncertainty. It is a hedge against currency debasement and also when it comes to portfolio composition and portfolio allocation analysis has shown over and over again that is that it's a beautiful portfolio diversifier. Um and I think for every portfolio manager that that should be the dream. It's an uncorrelated asset that is an additional tool to diversify risk but also um yeah look for for a potential upside. Uh and we've seen over and over again how a small allocation and that's important because it should be a part of a multi-asset approach. How a small allocation in Bitcoin can improve risk adjusted returns. Um, and that's exactly how people should look at it as a long-term diversifier. What allocation makes sense to you, Adrian, in terms of how much Bitcoin we should put in our retirement portfolios? I mean, we always we usually when we run the analysis, it's always somewhere between 1 till 5%. Um, of course, it depends on the remaining portfolio composition, but usually that's where the sweet spot is. Um and here we see clear kind of improvement to to the sharp ratios, risk adjusted returns um and the overall performance um uh of the portfolio. So I would say for yeah a balanced investor 1 to 5%. Market sentiment between retail and institutional uh investors. We've talked about institutional demand and inflows and the use cases for Bitcoin within an institutional context so far, but how do you think retail sentiment is uh shaping up this year? Is it on par with the same appetite as institutional demand or are they on separate conver uh you know diverging paths? That's a very good question, David. And I would say it is different this time in in regards to that retail retail is not really here yet. Um, usually when the bull market really heats up, um, I have a bunch of friends from on Facebook or friends that I haven't talked to for for for for years. They start reaching out to me and ask is it still a good time to invest? And usually that's where where where I know, okay, retail is really here and it might be dangerous. Um, but overall the retail sentiment and retail in general, they're still not here. The rally this time is really driven by institutional interest, institutional adoption, but also policydriven of course. Um, with all the regulatory changes, especially coming from the US, we see a clear shift towards uh institutions. What could bring retail sentiment and appetite back to the same extent as 2021 for example? I I don't know if it's ever going to be like in uh 21. Uh obviously we were all uh at home. Uh it was the middle of the cor the start of the corona crisis. Uh we got a lot of liquidity injected and people just had a lot of money to to to spend. Um, however, I believe that it's crucial that we see interest rates coming down. Um, and obviously M2 money supply continuing to climb higher. Um, and usually price is the best marketing. So once we start picking up and uh, yeah, prices start to shoot up, it creates that flywheel where more and more people will will jump on. And I think that's kind of like the the big catalyst. Um, interest rates coming down and the start of an altcoin season. Speaking of altcoins, let's shift now to Ethereum. Ethereum has had a massive bull run in the last few weeks to uh well, basically the last 2 months from the end of June 2025, it's up nearly 82%. Now, interestingly, when the first Ethereum ETF was approved sometime around mid 2024, in fact, I think the first ETF for Ether was launched in July 2024, that did not immediately have uh a huge rush on the price as some people may have hoped it would. And in fact, as you can see on the chart here, went down and then it kind of just hovered in a sideways consolidating pattern until the breakout that we saw this summer. Why didn't the ETH ETF approval and subsequent launches have the same effect as they did on Bitcoin? That's again a very good question. I think the first problem was just expectations. Um I think it's hard to compete with the biggest ETF launch in history. Um so even from our side from 21 shares we didn't expect the same gratitude the same uh the the same magnitude of inflows when it comes to to to Ethereum. However, just looking at the price performance of the last 12 18 months, Ethereum was the problem child, right? Um, we had other assets like uh Solana for instance eating up a lot of their market share. Um, while Ethereum basically has been going sideways for the last four years. Why? I would say they had some structural problems just when we talk about the technology itself. Um but I think the bigger problem was just the narrative. Uh of course Bitcoin as a digital gold as a emerging store of value it's very easy to grasp. It's an easy pitch to make while it comes to Ethereum it takes a bit more education until you really understand what the value proposition is. That's number one. Number two, I think it's also the regulatory changes again. Um what we've seen with the Genius Act, um a clear move into stable coins, but also just the entire Yeah. the proc crypto government in the US obviously sparked kind of like a rush back to Ethereum. Why Ethereum? It is a It is It has the longest track record. Ethereum is 10 years old. It's never been down. Yes, it might be a bit slower than other uh blockchains. It might be a bit more expensive, but when it comes to Wall Street money, to big asset managers, to tokenization, stable coins, obviously they use Ethereum for that case. Um because security is is the most important thing. And I'm happy Wall Street is finally catching up to that narrative. Is it a fair statement to make, Adrian, that because Bitcoin has properties that institutional um investors and treasury companies alike need? That the Bitcoin ETF is fundamentally an institutional product because retail investors don't really need an ETF. I mean, they could buy one, but they already have the spot. Whereas Ethereum doesn't really fit that narrative. And so, while retail investors may be more interested in Ethereum, institutional investors were not. Is that a fair assessment? You could say. So, I mean, the good thing is with with with Ether, the asset, um, there's there's much more utility. Um, so of course it has features like staking, um, or you just need it for the onchain economy. So, obviously, a lot of retail investors, they might go directly. Um, while for an institutional player, if they want to get exposure to that new technology and innovation, they want to choose an ETF. So what's the future of ETF launches in this space uh and ETF products? How do you see uh this space evolving now that we've already had a series of the most successful ETF launches in history around Bitcoin? I would say obviously 21 shares we also have a few uh outstanding applications uh with the SEC. So I can't really comment on that but uh generally speaking we will see more products I think um and we will also see more innovation and product features when it comes to those to those products. Um I mean 21 shares of course we we're we're a Swissborn company. uh we've been in the crypto space for for over 7 years and especially in the European market we already been dealing with those kind of features um that generate additional yield uh that enable um investors to get more exposure and I think that could swap over to the US as well sooner or later. When I introduced you earlier in the uh in the uh discussion the interview, I had mentioned that 21 shares packages ETFs and creates ETFs for Ethereum and Bitcoin. Uh and I said that one of the reasons that people could look into these products is because they uh are not able to buy Bitcoin or Ethereum in whatever jurisdiction that they operate in and given perhaps given investor constraints. Um is that one of the reasons? In other words, broadly speaking, why should somebody, and I'll let you answer who that somebody may be, why should somebody look into an uh ETH Bitcoin ETF product versus a direct exposure? Yes. I mean, there's a lot of benefits to that. Um I mean, usually to the clients, we speak um family offices, private banks, independent asset managers, and now also pension funds. they don't want to deal with the with the technical hurdle. Uh they don't want to set up a wallet. They don't really want to worry about the custody in the back end. Um and they also don't want to have a separate account to manage uh their portfolio. That's why an ETF is just a very convenient solution to get exposure. Um, and usually banks around, especially uh Europe, but around the world, they love to work with us because it's an easy plug-and-play and offering for uh the end clients. Um, the good thing is they don't have to worry about anything else. Just like any other uh product and ETF out there, they simply buy it and get exposure. That's it. Which doesn't mean one is better than the other, but we think u it's it's just a choice. I'm curious. 21 shares was uh early in Europe. Uh how did um the demand for ETF products in Europe and actually in Asia as well uh differ from that of the US and perhaps other parts of the world? I mean I would say especially in the you were just really really early. I mean uh we launched the world's first physically backed ETP in 2018. Um and over the years we've seen I mean we already seen a lot of investors going into crypto uh for for yeah the the last five till seven years. So when it comes to kind of like the educational component or just the knowledge that the investors have, they Europe might have had an advantage or a head start, but we clearly see how the US is catching up. When it comes to the inflows, of course, the US is a different beast. Uh the US is the biggest capital market in the world. Um so just to put some numbers um it took us yeah it took us over five years uh to reach around 3 billion uh in in Europe while in the US it took us 3 months uh and that's just kind of like the magnitude of the market right now. What's next for uh 21 shares? What's the um what's the vision for this company in in light of recent regulatory changes in light of like I mentioned Trump's executive order that allows 401ks to adopt uh crypto products. Are you changing your offerings in light of recent uh policy changes in especially in regards to 401k as now being able to adopt Bitcoin? No. No, no, no. Uh we won't in that case we won't change our offering. Um, we think the the ETFs are an amazing tool to get exposure. I think what's really important is the education. Um, and that's where I believe we we we also shine. Um, all we do is crypto. Um, all we do is crypto ETFs and therefore also when it comes to education, we know how important that is. Um, because usually you first capture the mind share and then you capture the market share. And I think when it comes to those 401ks, uh, for now, we need to educate them and really help them navigate through this new asset class. And that's kind of like what our mission is as well. Ever since spot bitcoin was approved, there's been a lot of issuers entering the space, some very big uh, ETF issuers based in the US. How does 21 shares plan to stay competitive with all the other issuers? That's a brilliant question, David. again. Um, of course, competition is heating up. Um, we see big asset managers entering the space. Um, however, I think where we really stand out, first of all, we have a 7-year track record. Um, so when it comes to the operational side, uh, we have a lot of experience and a lot of people overlook that. To give you an example, if Apple changes their business model or something is happening, it doesn't really affect the security. It doesn't affect Apple's stock aside from maybe price movement. However, if anything happens through the underlying blockchain, it also affects the investment vehicle. To give you an example, if there's a fork, if there's an airdrop, if there's a migration, any corporate action could also affect the product itself. And we've been dealing with that for the last 7 years. Uh, and I think a lot of people underestimate what it what it takes to deal with that. That's number one. Number two is just capital markets. Um, of course for especially for retail investors, they might be uh just look at their brokerage account and all they see is maybe the management fee, but in the nuances there's so much more uh especially when it comes to institutional investor that that is important. And for our capital markets capabilities, I would also say we we're second to none. And lastly, it's research. Um we lead with research with education because once again um we believe if if you don't understand if you don't get comfortable with this new asset class you won't consider an investment in the first place and I think that's also where we have um a long track record talking to traditional investors. What is that criteria or decision-m process behind a firm like 21 shares when it comes to deciding which cryptos to create an ETF product for? So, as we've discussed, there are Bitcoin and ETH uh ETF products offered at 21 shares. However, if I look at this chart, for example, this table shows the top 10 cryptos. And as you can see here that besides Tether, and uh USDC, which are stable coins, uh you've got Ethereum, XRP, Salana, Dogecoin, Tron, Cardano, Hyperlid, Chain Link. uh at what when can we see ETF products for these other tokens, these other coins? Is there even a need for ETF products for let's say Salana or Dogecoin? Um, of course, we're an ETF issuer. We provide access and we provide the tools for investors to get exposure. On top of that, obviously, we pro provide the education and the teachings for them to understand it. When it comes to the actual investment, obviously they have to decide if they if they want to go in or not. Um how the decision process looks like um it really depends of course there need either there is uh client demand. So just the market wants to get exposure which a lot of times we do see maybe internally we have a high conviction uh and therefore we want to make sure we we we push a certain uh product um or any other partnership that might lead us to launching an ETF but after all we're an ETF provider and we want to make sure we provide the tools for institutional investors. So what you're saying is once demand comes and there's regulatory approval then you will look into creating a product once customers approach you and say hey make me a you know XYZ ETF. Uh absolutely that's obviously the best indication if we really have uh traditional investors asking for a certain asset. Of course there's a lot of regulatory hurdles that we have to push through. Uh but that's usually the best indication uh why we want to launch a product. Well, can you just give us can you just give us a hint here? The Salana ETF application has been pushed back once more by the SEC. Some speculate um a decision by early to late October this year. Uh clearly you I mean obviously you know about this development in the news. What is 21 shares doing about this if anything? Um whatever you're able to comment at this point. Yeah, unfortunately I can't comment much uh when it comes to that. Uh but just from a research angle, we are a big fan of of Solana as well. Um a lot of people might not know this, especially when it comes to our European product. Uh it's actually one of the biggest uh products in Europe and it is the biggest Solana ETP um in in in Europe as well. So we've already seen kind of like a lot of traction and inflows uh in in the European market and we do expect a similar story in the long run in the US as well. It's 2025 now. Um many people are still not on ramped to crypto and Bitcoin. I'm not telling them to do so, but I am, you know, encouraging people to do their own research and learn about the space, which is ultimately the purpose of my program. So, if somebody says to you, Adrian, well, I still don't really understand why I should invest in Bitcoin or any other crypto uh in 2025 and beyond, it's too risky. It's too speculative. I know Black Rockck and Fidelity and 21 Shares and all the other big mass managers are, you know, creating ETF products. I know that the government is adopting Bitcoin, but I I don't for me, I don't know. It probably isn't for me. I just don't know. What would you say? I would say reach out. Uh again obvious obviously we put out a lot of written content um for people to educate themselves. However, we also provide a lot of teachings, educational sessions and I think where we excel is really speaking the language of the traditional investors because especially when it comes to crypto it's it can be highly technical. There's a lot of lingo and a lot of yeah cryptospecific terms but we make sure we translate that into digestible uh bites um and help you on that journey. So whenever you feel lost feel free to reach out to 21 shares at any time I would say. Well what are some of the biggest misconceptions about investing in Bitcoin and crypto uh that you've seen in the last year or so? I love that question. Um I would say one one big misconception that is still around is that it's too volatile. Um Bitcoin's volatility came down significantly. Uh it's around 50% maybe a lot of times it's less volatile than most of the tech stocks. Um it's just really important to look at the quantitative analysis and how to fit it in a portfolio. But saying that this asset is too volatile, I think that's a that's a major misconception. Looking ahead now, the next two to three years, uh what's next for 21 shares? How do you see uh the company and the offerings potentially evolving? I mean, we want to go out there with uh more products. Um we want to conquer more markets and especially want to we want to establish um and yeah push our brand in the US market. Uh once again we are cryptonative asset manager. I think uh we have brilliant people in the in the in the company uh and we want to make sure uh we put our name out there but other than that of course we want to grow our AUM more markets more products. We're definitely hungry. Ultimately what is your vision or the company's vision long term? Um of course becoming the the most successful uh crypto ETF. uh um issuer in the in the market. Um especially when we look at some of those big asset managers, we want to make sure we can compete with them. Um of course, now it's kind of like David versus Goliath. Uh but I do think if we put in the right strategy, um the right education, uh that we could that that we will be successful. Uh well, David had a better weapon and uh so going back to my earlier question, what is your better weapon? Are you are you planning to compete on fees um or uh is there a difference in the uh product itself? Like what's the strategy here? Um we want to make sure we have uh the broadest offering. So we want to we we want to come out with many many many more products but also when it comes to product innovation uh once again there's features like uh staking for instance um that that we want to make sure uh we also offer to investors um and especially on the operational and capital market side there are nuances where where we stand out um and we want to make sure investors are aware of that. Good. Thank you very much, Adrian. Well, where can we go to learn more about 21Shares and educate ourselves? I mean, you can check out our website, 21shares.com. Um, also, please follow me on Twitter or on X Adrian WJ Fritz. And if you need anything, feel free to reach out. Uh, check out our website, our socials, and yeah, it was a pleasure being here, David. Yeah, it was a pleasure hosting you and thank you for your time. I look forward to the next time. Thank you and thank you for watching. Don't forget to like and subscribe.
Bitcoin Year-End Price Revealed: $500 Billion 401k Flood Incoming | Adrian Fritz
Summary
Transcript
we see bigger players starting to take a look at Bitcoin. We get more and more news from pension funds, state funds in the US that start allocating into Bitcoin. We expect higher prices. Um, but we do believe until end of the year it will be close to 140K. Bitcoin is on the verge of a breakout and can surpass new all-time highs by year end. And like prior bull cycles, this one is driven by deep forces within the institutional flow cycle and space. We'll be talking about what this means for not just Bitcoin, but the overall crypto landscape, what it means for uh investors looking to adopt cryptos, Bitcoin and other alts alike, and what regulatory changes could mean for your retirement. 21 Shares. Joins us today uh on this program is Adrien Fritz, global head of research at 21 Shares. Welcome to the show, Adrien. Good to see you. Thanks for having me, David. Let's talk about your firm's outlook on Bitcoin, your firm's outlook on Ethereum, and all the forces that may drive ETF adoption, uh, which is what, uh, your firm 21 shares does, which is package, uh, ETFs together for investors, uh, who may not be able to buy the underlying. We'll talk about, uh, that space in just a second, but let's take a look at your forecast here. 21 shares forecast it could reach 138,500 by year end. We're talking about Bitcoin. Unlike previous bull runs fueled by retail mania, this cycle was this rally is rigid and powerful long-term forces, deep pocketed institutional inflows, favorable macro trends, and an unprecedented supply crunch. And then I'll leave this chart here for you to comment on. I my my first reaction to this is that yes, this is a breakout, but it's not as bullish, quote unquote, bullish as some of the other estimates I've heard this year. Um, you are leaning actually more towards the conservative side when it comes to a bullish forecast. Why? That's 100% correct. I mean, just as a disclaimer, that's from our market outlook from December last year. Um, that's where we already put out like 138K. Um, but we do stick to it. Um, of course, Bitcoin grew tremendously in market cap over the last 12, 18 months. Uh, and it takes much more um to, yeah, move prices higher. Um, of course there are a lot of regulatory changes, um, a lot of macro changes and in general just a lot of structural tailwinds. Um, for that reason, we expect higher prices. Um but we do believe until end of the year it will be close to 140k and as you said obviously we are we're a bit more conservative but by the end of the day we still expect more upside. Well if you say that this report was released sometime late last year you know you're the research team here behind this report has been pretty much correct in terms of the direction and almost the scale and magnitude of the climb that they initially projected. as you as you as you remember how Bitcoin reached over 120K and that was just last month. So, we've got six more months to go or five more months to go. Well, let's talk about some of these institutional um adoption, institutional inflows uh that uh was referenced here. Um we know that the Bitcoin ETF that was launched had a significant impact on institutional inflows. What else contributed or could contribute to higher inflows than perhaps previous years? I mean there's a lot going on and it's pretty exciting supply and demand dynamics when it comes to Bitcoin. Um first of all of course macro is important so we have to take into it into account. Um we all expect interest rates to come down in the near future and of course that will fuel investors to go a bit um yeah a bit higher on the risk curve. Um while Bitcoin obviously has characteristics of a riskoff asset, a lot of investors still treat it as a as a risk on play. Um however given that the the macro outlook looks positive. Um that's one catalyst. Secondly, as you said, obviously it is the ETFs. Um, it is a gateway for institutional adoption and Bitcoin over the last yeah one and a half years since beginning last year showcased that there is a lot of interest and it was the most successful ETF launch in history. Um, and it continues to see inflows. Moreover, and that's really important as well, obviously our Bitcoin treasury companies um that been popping up globally, they kind of take the micro strategy playbook um and they adding Bitcoin to their treasury. Um and as we can see, that's that's another factor that um yeah, just um drives up uh the the de demand for Bitcoin. Lastly, and that's where we talk about the supply shock. Um, if we look at long-term holders or let's say people that haven't moved their Bitcoin for the last 6 months, if you look at onchain metrics, that's actually around 14 million Bitcoin haven't moved um in the last 6 months. Um and that kind of showcases that a lot of people especially retail as well they are buying and they are holding on to the asset which is really really important. And of course if we compare the numbers let's not forget Bitcoin is a hardcoded asset. Only 165,000 Bitcoin are coming new into the supply uh on a on a yearly basis. And if we compare that to actually what's been happening over the last 12 months, um that greatly exceeds um the actually the actual supply that is out there and that kind of is that cocktail for a potential uh supply shock. This chart here shows that uh the supply is not meeting demand. newly issued Bitcoin uh up until uh the last 12 months 165,000 and the Bitcoin accumulated by corporates and governments significantly higher than that by a magnitude of three times. Now this trend happened last year and my question is whether or not this trend will continue. Have governments and corporates accumulated enough up until 2025 such that uh this chart may reverse again by 2027? We don't think so. I mean this is basically just the beginning. Um also in regards to institutional adoption um we see bigger players starting to take a look at Bitcoin. Um, of course we get more and more news from uh pension funds or uh state funds in the US that start allocating into Bitcoin, but we're still at the very very beginning. Another big news that we had a couple I think last week or the week before was obviously that uh President Trump he signed an executive order um allowing 401ks to allocate into crypto. um and including Bitcoin and obviously that will be a massive demand driver for the years to come. Well, this article that uh 21 shares published touched on this topic exactly. It does say at the end, it's important to know that this process will take time. Trump's executive order initiates a 6 to 12 month regulatory process before compliant products can be added to retirement plans. Some of the people I've take I've talked to about this issue agree that uh no immediate change to 401ks are expected to happen right away. Do you agree? 100% 100%. It won't happen um from one day to another. It's a stepby-step process. And also when it comes to the inflows um it's more on a consistent basis. We see small allocations at the beginning but on a constant basis. And over the years obviously it it starts accumulating. Um and that's exactly how we uh drew the conclusion here as well where we say it's around 500 billion that flow into 401ks on a yearly basis. Let's say we take a 5% bitcoin allocation um over the next 10 years. That's how we reach the almost 360 or 360 billion in in inflows. But yeah, it will be it will be a slow process but a steady one and that's really important. So Adrian, if I were a pension fund and I just got news that I'm able to invest in Bitcoin into the 401ks that I manage. Well, my question is why would I should I what is the investment thesis here for for adding Bitcoin or any other cryptos into a 401k contribution? I mean, we we we all know the pitch from from from Mic Sailor or other thought leaders in the space. Um, it is a hard asset. Um, and there's no no alternative to Bitcoin when it comes to an a hard asset like uh like Bitcoin. It is a hedge against economic uncertainty. It is a hedge against currency debasement and also when it comes to portfolio composition and portfolio allocation analysis has shown over and over again that is that it's a beautiful portfolio diversifier. Um and I think for every portfolio manager that that should be the dream. It's an uncorrelated asset that is an additional tool to diversify risk but also um yeah look for for a potential upside. Uh and we've seen over and over again how a small allocation and that's important because it should be a part of a multi-asset approach. How a small allocation in Bitcoin can improve risk adjusted returns. Um, and that's exactly how people should look at it as a long-term diversifier. What allocation makes sense to you, Adrian, in terms of how much Bitcoin we should put in our retirement portfolios? I mean, we always we usually when we run the analysis, it's always somewhere between 1 till 5%. Um, of course, it depends on the remaining portfolio composition, but usually that's where the sweet spot is. Um and here we see clear kind of improvement to to the sharp ratios, risk adjusted returns um and the overall performance um uh of the portfolio. So I would say for yeah a balanced investor 1 to 5%. Market sentiment between retail and institutional uh investors. We've talked about institutional demand and inflows and the use cases for Bitcoin within an institutional context so far, but how do you think retail sentiment is uh shaping up this year? Is it on par with the same appetite as institutional demand or are they on separate conver uh you know diverging paths? That's a very good question, David. And I would say it is different this time in in regards to that retail retail is not really here yet. Um, usually when the bull market really heats up, um, I have a bunch of friends from on Facebook or friends that I haven't talked to for for for for years. They start reaching out to me and ask is it still a good time to invest? And usually that's where where where I know, okay, retail is really here and it might be dangerous. Um, but overall the retail sentiment and retail in general, they're still not here. The rally this time is really driven by institutional interest, institutional adoption, but also policydriven of course. Um, with all the regulatory changes, especially coming from the US, we see a clear shift towards uh institutions. What could bring retail sentiment and appetite back to the same extent as 2021 for example? I I don't know if it's ever going to be like in uh 21. Uh obviously we were all uh at home. Uh it was the middle of the cor the start of the corona crisis. Uh we got a lot of liquidity injected and people just had a lot of money to to to spend. Um, however, I believe that it's crucial that we see interest rates coming down. Um, and obviously M2 money supply continuing to climb higher. Um, and usually price is the best marketing. So once we start picking up and uh, yeah, prices start to shoot up, it creates that flywheel where more and more people will will jump on. And I think that's kind of like the the big catalyst. Um, interest rates coming down and the start of an altcoin season. Speaking of altcoins, let's shift now to Ethereum. Ethereum has had a massive bull run in the last few weeks to uh well, basically the last 2 months from the end of June 2025, it's up nearly 82%. Now, interestingly, when the first Ethereum ETF was approved sometime around mid 2024, in fact, I think the first ETF for Ether was launched in July 2024, that did not immediately have uh a huge rush on the price as some people may have hoped it would. And in fact, as you can see on the chart here, went down and then it kind of just hovered in a sideways consolidating pattern until the breakout that we saw this summer. Why didn't the ETH ETF approval and subsequent launches have the same effect as they did on Bitcoin? That's again a very good question. I think the first problem was just expectations. Um I think it's hard to compete with the biggest ETF launch in history. Um so even from our side from 21 shares we didn't expect the same gratitude the same uh the the same magnitude of inflows when it comes to to to Ethereum. However, just looking at the price performance of the last 12 18 months, Ethereum was the problem child, right? Um, we had other assets like uh Solana for instance eating up a lot of their market share. Um, while Ethereum basically has been going sideways for the last four years. Why? I would say they had some structural problems just when we talk about the technology itself. Um but I think the bigger problem was just the narrative. Uh of course Bitcoin as a digital gold as a emerging store of value it's very easy to grasp. It's an easy pitch to make while it comes to Ethereum it takes a bit more education until you really understand what the value proposition is. That's number one. Number two, I think it's also the regulatory changes again. Um what we've seen with the Genius Act, um a clear move into stable coins, but also just the entire Yeah. the proc crypto government in the US obviously sparked kind of like a rush back to Ethereum. Why Ethereum? It is a It is It has the longest track record. Ethereum is 10 years old. It's never been down. Yes, it might be a bit slower than other uh blockchains. It might be a bit more expensive, but when it comes to Wall Street money, to big asset managers, to tokenization, stable coins, obviously they use Ethereum for that case. Um because security is is the most important thing. And I'm happy Wall Street is finally catching up to that narrative. Is it a fair statement to make, Adrian, that because Bitcoin has properties that institutional um investors and treasury companies alike need? That the Bitcoin ETF is fundamentally an institutional product because retail investors don't really need an ETF. I mean, they could buy one, but they already have the spot. Whereas Ethereum doesn't really fit that narrative. And so, while retail investors may be more interested in Ethereum, institutional investors were not. Is that a fair assessment? You could say. So, I mean, the good thing is with with with Ether, the asset, um, there's there's much more utility. Um, so of course it has features like staking, um, or you just need it for the onchain economy. So, obviously, a lot of retail investors, they might go directly. Um, while for an institutional player, if they want to get exposure to that new technology and innovation, they want to choose an ETF. So what's the future of ETF launches in this space uh and ETF products? How do you see uh this space evolving now that we've already had a series of the most successful ETF launches in history around Bitcoin? I would say obviously 21 shares we also have a few uh outstanding applications uh with the SEC. So I can't really comment on that but uh generally speaking we will see more products I think um and we will also see more innovation and product features when it comes to those to those products. Um I mean 21 shares of course we we're we're a Swissborn company. uh we've been in the crypto space for for over 7 years and especially in the European market we already been dealing with those kind of features um that generate additional yield uh that enable um investors to get more exposure and I think that could swap over to the US as well sooner or later. When I introduced you earlier in the uh in the uh discussion the interview, I had mentioned that 21 shares packages ETFs and creates ETFs for Ethereum and Bitcoin. Uh and I said that one of the reasons that people could look into these products is because they uh are not able to buy Bitcoin or Ethereum in whatever jurisdiction that they operate in and given perhaps given investor constraints. Um is that one of the reasons? In other words, broadly speaking, why should somebody, and I'll let you answer who that somebody may be, why should somebody look into an uh ETH Bitcoin ETF product versus a direct exposure? Yes. I mean, there's a lot of benefits to that. Um I mean, usually to the clients, we speak um family offices, private banks, independent asset managers, and now also pension funds. they don't want to deal with the with the technical hurdle. Uh they don't want to set up a wallet. They don't really want to worry about the custody in the back end. Um and they also don't want to have a separate account to manage uh their portfolio. That's why an ETF is just a very convenient solution to get exposure. Um, and usually banks around, especially uh Europe, but around the world, they love to work with us because it's an easy plug-and-play and offering for uh the end clients. Um, the good thing is they don't have to worry about anything else. Just like any other uh product and ETF out there, they simply buy it and get exposure. That's it. Which doesn't mean one is better than the other, but we think u it's it's just a choice. I'm curious. 21 shares was uh early in Europe. Uh how did um the demand for ETF products in Europe and actually in Asia as well uh differ from that of the US and perhaps other parts of the world? I mean I would say especially in the you were just really really early. I mean uh we launched the world's first physically backed ETP in 2018. Um and over the years we've seen I mean we already seen a lot of investors going into crypto uh for for yeah the the last five till seven years. So when it comes to kind of like the educational component or just the knowledge that the investors have, they Europe might have had an advantage or a head start, but we clearly see how the US is catching up. When it comes to the inflows, of course, the US is a different beast. Uh the US is the biggest capital market in the world. Um so just to put some numbers um it took us yeah it took us over five years uh to reach around 3 billion uh in in Europe while in the US it took us 3 months uh and that's just kind of like the magnitude of the market right now. What's next for uh 21 shares? What's the um what's the vision for this company in in light of recent regulatory changes in light of like I mentioned Trump's executive order that allows 401ks to adopt uh crypto products. Are you changing your offerings in light of recent uh policy changes in especially in regards to 401k as now being able to adopt Bitcoin? No. No, no, no. Uh we won't in that case we won't change our offering. Um, we think the the ETFs are an amazing tool to get exposure. I think what's really important is the education. Um, and that's where I believe we we we also shine. Um, all we do is crypto. Um, all we do is crypto ETFs and therefore also when it comes to education, we know how important that is. Um, because usually you first capture the mind share and then you capture the market share. And I think when it comes to those 401ks, uh, for now, we need to educate them and really help them navigate through this new asset class. And that's kind of like what our mission is as well. Ever since spot bitcoin was approved, there's been a lot of issuers entering the space, some very big uh, ETF issuers based in the US. How does 21 shares plan to stay competitive with all the other issuers? That's a brilliant question, David. again. Um, of course, competition is heating up. Um, we see big asset managers entering the space. Um, however, I think where we really stand out, first of all, we have a 7-year track record. Um, so when it comes to the operational side, uh, we have a lot of experience and a lot of people overlook that. To give you an example, if Apple changes their business model or something is happening, it doesn't really affect the security. It doesn't affect Apple's stock aside from maybe price movement. However, if anything happens through the underlying blockchain, it also affects the investment vehicle. To give you an example, if there's a fork, if there's an airdrop, if there's a migration, any corporate action could also affect the product itself. And we've been dealing with that for the last 7 years. Uh, and I think a lot of people underestimate what it what it takes to deal with that. That's number one. Number two is just capital markets. Um, of course for especially for retail investors, they might be uh just look at their brokerage account and all they see is maybe the management fee, but in the nuances there's so much more uh especially when it comes to institutional investor that that is important. And for our capital markets capabilities, I would also say we we're second to none. And lastly, it's research. Um we lead with research with education because once again um we believe if if you don't understand if you don't get comfortable with this new asset class you won't consider an investment in the first place and I think that's also where we have um a long track record talking to traditional investors. What is that criteria or decision-m process behind a firm like 21 shares when it comes to deciding which cryptos to create an ETF product for? So, as we've discussed, there are Bitcoin and ETH uh ETF products offered at 21 shares. However, if I look at this chart, for example, this table shows the top 10 cryptos. And as you can see here that besides Tether, and uh USDC, which are stable coins, uh you've got Ethereum, XRP, Salana, Dogecoin, Tron, Cardano, Hyperlid, Chain Link. uh at what when can we see ETF products for these other tokens, these other coins? Is there even a need for ETF products for let's say Salana or Dogecoin? Um, of course, we're an ETF issuer. We provide access and we provide the tools for investors to get exposure. On top of that, obviously, we pro provide the education and the teachings for them to understand it. When it comes to the actual investment, obviously they have to decide if they if they want to go in or not. Um how the decision process looks like um it really depends of course there need either there is uh client demand. So just the market wants to get exposure which a lot of times we do see maybe internally we have a high conviction uh and therefore we want to make sure we we we push a certain uh product um or any other partnership that might lead us to launching an ETF but after all we're an ETF provider and we want to make sure we provide the tools for institutional investors. So what you're saying is once demand comes and there's regulatory approval then you will look into creating a product once customers approach you and say hey make me a you know XYZ ETF. Uh absolutely that's obviously the best indication if we really have uh traditional investors asking for a certain asset. Of course there's a lot of regulatory hurdles that we have to push through. Uh but that's usually the best indication uh why we want to launch a product. Well, can you just give us can you just give us a hint here? The Salana ETF application has been pushed back once more by the SEC. Some speculate um a decision by early to late October this year. Uh clearly you I mean obviously you know about this development in the news. What is 21 shares doing about this if anything? Um whatever you're able to comment at this point. Yeah, unfortunately I can't comment much uh when it comes to that. Uh but just from a research angle, we are a big fan of of Solana as well. Um a lot of people might not know this, especially when it comes to our European product. Uh it's actually one of the biggest uh products in Europe and it is the biggest Solana ETP um in in in Europe as well. So we've already seen kind of like a lot of traction and inflows uh in in the European market and we do expect a similar story in the long run in the US as well. It's 2025 now. Um many people are still not on ramped to crypto and Bitcoin. I'm not telling them to do so, but I am, you know, encouraging people to do their own research and learn about the space, which is ultimately the purpose of my program. So, if somebody says to you, Adrian, well, I still don't really understand why I should invest in Bitcoin or any other crypto uh in 2025 and beyond, it's too risky. It's too speculative. I know Black Rockck and Fidelity and 21 Shares and all the other big mass managers are, you know, creating ETF products. I know that the government is adopting Bitcoin, but I I don't for me, I don't know. It probably isn't for me. I just don't know. What would you say? I would say reach out. Uh again obvious obviously we put out a lot of written content um for people to educate themselves. However, we also provide a lot of teachings, educational sessions and I think where we excel is really speaking the language of the traditional investors because especially when it comes to crypto it's it can be highly technical. There's a lot of lingo and a lot of yeah cryptospecific terms but we make sure we translate that into digestible uh bites um and help you on that journey. So whenever you feel lost feel free to reach out to 21 shares at any time I would say. Well what are some of the biggest misconceptions about investing in Bitcoin and crypto uh that you've seen in the last year or so? I love that question. Um I would say one one big misconception that is still around is that it's too volatile. Um Bitcoin's volatility came down significantly. Uh it's around 50% maybe a lot of times it's less volatile than most of the tech stocks. Um it's just really important to look at the quantitative analysis and how to fit it in a portfolio. But saying that this asset is too volatile, I think that's a that's a major misconception. Looking ahead now, the next two to three years, uh what's next for 21 shares? How do you see uh the company and the offerings potentially evolving? I mean, we want to go out there with uh more products. Um we want to conquer more markets and especially want to we want to establish um and yeah push our brand in the US market. Uh once again we are cryptonative asset manager. I think uh we have brilliant people in the in the in the company uh and we want to make sure uh we put our name out there but other than that of course we want to grow our AUM more markets more products. We're definitely hungry. Ultimately what is your vision or the company's vision long term? Um of course becoming the the most successful uh crypto ETF. uh um issuer in the in the market. Um especially when we look at some of those big asset managers, we want to make sure we can compete with them. Um of course, now it's kind of like David versus Goliath. Uh but I do think if we put in the right strategy, um the right education, uh that we could that that we will be successful. Uh well, David had a better weapon and uh so going back to my earlier question, what is your better weapon? Are you are you planning to compete on fees um or uh is there a difference in the uh product itself? Like what's the strategy here? Um we want to make sure we have uh the broadest offering. So we want to we we want to come out with many many many more products but also when it comes to product innovation uh once again there's features like uh staking for instance um that that we want to make sure uh we also offer to investors um and especially on the operational and capital market side there are nuances where where we stand out um and we want to make sure investors are aware of that. Good. Thank you very much, Adrian. Well, where can we go to learn more about 21Shares and educate ourselves? I mean, you can check out our website, 21shares.com. Um, also, please follow me on Twitter or on X Adrian WJ Fritz. And if you need anything, feel free to reach out. Uh, check out our website, our socials, and yeah, it was a pleasure being here, David. Yeah, it was a pleasure hosting you and thank you for your time. I look forward to the next time. Thank you and thank you for watching. Don't forget to like and subscribe.