ETF Edge on crypto rising on Clarity Act relief

0:08 Welcome to ETF Edge,

0:09 your go-to place for all things exchange-traded [music] funds.

0:12 I'm Leslie Picker in for Dominic Chu.

0:14 Crypto headliners, Bitcoin and Ethereum,

0:16 have been on a quiet rebound during the past month,

0:19 but under the hood there's conflicting

0:20 crosscurrents that could still sway their direction.

0:24 Joining me now are Matthew Siegel,

0:25 head of digital asset research at VanEck Funds,

0:28 and Sol Gilbert, Gilbert, president and CEO of Tucrum Trading.

0:32 Guys, thank you very much for being here.

0:35 Uh Matt, you note that Bitcoin has lost nearly half

0:38 of its value since peaking it at 126,000 in October of 2025.

0:43 It hasn't closed above its 200-day moving average in 7 months.

0:47 We're right under that level now.

0:50 Do you feel like it's poised for more of a breakout?

0:53 We do think that, uh when we look back on this in 12 years,

0:57 Bitcoin in 12 months, excuse me,

0:59 Bitcoin is likely to reach its all-time high again.

1:02 When you look at investor surveys around where folks intend to buy,

1:07 Bitcoin shows up close to the top of the list.

1:11 Uh the correlations with the Nasdaq are quite high at the moment.

1:15 So, I think that's one thing investors need to be aware

1:18 of is that this move has been turbocharged by US stocks being,

1:23 you know, so resilient.

1:24 But, one thing that keeps us uh pretty constructive here

1:27 is that there isn't much optimism in the derivatives markets,

1:32 uh futures and options.

1:33 It still looks to us like this is short covering,

1:37 uh and folks are uh paying a lot for protection.

1:41 Uh so, the contrarian take to be to that would be the rally continues.

1:45 Hm.

1:45 So, you would give it a more of a correlation

1:47 to equities and more of a risk-on sentiment,

1:50 or maybe not since we're not seeing that options

1:52 activity that would suggest that to be the case.

1:55 Bitcoin's correlation with the Nasdaq abs and flows

1:59 and right now it's at close to a 5-year high.

2:03 So, if stocks were to sell off and those correlations hold then, you know,

2:07 at any given point a 10% correction in Bitcoin is no big thing.

2:10 We're we're used to that, but you know,

2:13 I think that's the the warning I would make,

2:15 but um you never know who the next buyer is going to be.

2:19 We've had uh one central bank already this year that has

2:22 announced that they're going to add Bitcoin to their foreign exchange reserves.

2:26 That's a sea change in terms of making this asset

2:29 a global settlement asset that's used

2:32 in trade for large-scale cross-border transactions.

2:36 We think that's a mega trend.

2:38 Mhm.

2:38 So, medium-term outlook still pretty positive here.

2:41 Interesting.

2:42 Let's talk about flows, Sal, because you know that April was the strongest

2:46 month for crypto ETF inflows in 2026 so far.

2:50 Spot Bitcoin ETFs pulled in roughly $2 billion.

2:55 6-month outflow streak.

2:56 What do you think happens from here?

2:58 I think the inflows continue.

3:00 I think Matthew's exactly right that it's a mega trend.

3:03 And so, the the adoption of crypto in general,

3:06 the adoption of blockchain architecture

3:09 into the traditional financial system is is accelerating

3:13 at a pace that people don't understand how big it is and how fast it is.

3:16 And so, there's there's a mega trend in terms of useful crypto is

3:21 going to be tokens with a use case with a very specific use case.

3:26 They're they're going to be attractive to investors

3:28 and continue to be attracted to investors.

3:30 Bitcoin, of course, is is the the headliner.

3:33 Um that will always Investors always have it number one as interest in Bitcoin.

3:37 Um and so, I think [clears throat] that indexes that contain

3:40 multiple um cryptos are going to become more popular as well.

3:45 So, I I think we're at the beginning of of this push and inflows.

3:49 Not We're not even close to the start.

3:51 Interesting.

3:52 Um, and of course, one of the big

3:54 looming questions that's out there involves regulation.

3:57 You both note the importance of the pending Clarity Act.

4:00 So, I'll I'll I'll start with you because you report that the regulatory

4:04 backdrop has really shifted meaningfully over the past month or so.

4:09 Uh, what do you mean by that?

4:10 Why why do you feel like things have really changed in a big way?

4:14 Well, I think that that again, we have an administration that's crypto-friendly.

4:17 That's the number one help.

4:19 I think that the regulators have have found themselves.

4:21 There've been a lot of cuts inside the government.

4:24 I think they've they've found their way.

4:25 The the process that we as ETF issuers have to go through is unchanged.

4:29 There's still um, very uh, deep scrutiny of the products that we want to list.

4:34 There's a lot of pushback from the government,

4:36 but they're open to hearing uh, new products and crypto-related products.

4:40 And that's really, really important.

4:42 I think the Clarity Act, whether it passes or not, um,

4:47 is is just a matter of the speed

4:49 of of institutional adoption in terms of investing in crypto.

4:53 In terms of institutional adoption of the blockchain,

4:55 whether the Clarity Act passes, it makes no difference.

4:58 That that will continue.

4:59 So, but a passage of the Clarity Act would be wonderful.

5:02 It would it would speed things up,

5:03 especially from in terms of an investor inflow perspective into say ETFs,

5:07 but if it doesn't pass, it's it's not the end of the world.

5:10 Matt, do you agree with that?

5:11 Uh, I mean, one reason why our On Chain Economy ETF

5:15 node is up 75% since inception while Bitcoin is down 20%

5:20 is that we've focused on the companies that can actually earn

5:25 a cash flow from the adoption of block chain blockchain technology.

5:29 And the the big trend in the markets over the last year plus,

5:32 at least in crypto land,

5:33 has been the underperformance of these altcoins like Ethereum,

5:37 like Solana as the listed equities begin to capture uh,

5:43 the technology and the value from some of these blockchain solutions.

5:48 So, we've been, you know,

5:49 very underweight altcoins in within node and the the passage of the Clarity Act,

5:56 I think, is a major question mark.

5:58 That could reignite some animal spirits in that space,

6:01 but we're still pretty cautious on this altcoin market.

6:04 I would I think the investor protections that are still yet

6:08 to be worked out keep a lot of institutions on the sideline.

6:13 If Clarity passes, that might be a, you know,

6:15 a time to even buy higher if the details will matter there.

6:19 But, we've been calling Bitcoin dominance higher,

6:21 outperformance of Bitcoin miners because of the AI convergence,

6:25 and I'm still sticking with that trade

6:27 and have not really pivoted to these alts.

6:29 Saul, what about XRP in relation to Bitcoin and Ethereum?

6:34 Well, it's got a it's got a use case, a very specific use case.

6:37 And more in particular, the XRP ledger has a use case.

6:41 So, Ripple, the company, has as its 13- or 14-year mission,

6:44 however long it's been, to move internationally value, okay?

6:48 And and primarily money.

6:50 And so, their chain, their XRPL chain, will be used for that.

6:54 XRP is a part is a tool on that chain.

6:57 And so, all of that will be used as it grows.

7:00 And so, that's all being built out.

7:02 It won't be the only thing as Ripple itself says to people all the time.

7:05 They're not going to be the only participant in this.

7:08 But, it's so big, you have to liken

7:10 this whole thing to the internet in the '90s, truly.

7:13 And so, that's where we are.

7:14 We're we're in the '90s.

7:16 We don't really know the the technologies that will even come out

7:20 of the use of the blockchain and the build these buildouts that are happening.

7:23 We just know what's here now and the things that are growing now.

7:25 Does that mean you think it's a bubble?

7:27 Uh it's not even close to a bubble.

7:28 No.

7:29 So, not not even close.

7:30 The '90s as it pertains to just I I mean the I mean the use of the internet.

7:35 So, if you take the take the the frothiness out, okay?

7:39 I mean the development of the internet as a tool

7:41 for business and every person in the world,

7:44 that's that's happening with the blockchain and we're

7:46 just at the very beginning of that.

7:47 All right.

7:48 Um what about other infrastructure plays?

7:53 Matt, what are you seeing in terms of uh

7:55 just additional opportunities as it pertains to this ecosystem?

8:00 Yeah, I mean where we've done best this year is

8:03 in investing around the infrastructure required to run the Bitcoin network.

8:09 So it uh Bitcoin is famously pretty energy intensive uh and we noticed a few

8:14 years ago that if you read the conference

8:16 calls of the even the publicly traded utilities,

8:18 they were starting to call out Bitcoin mining

8:21 as a driver of the underlying load growth.

8:24 So we realized that these Bitcoin miners were actually sitting

8:27 on one of the key bottlenecks of the AI trade.

8:30 They had a long history of developing these power assets and bringing them

8:33 to the market and there's a really nice reflexivity with Bitcoin and AI,

8:38 which is that the more that the AI story gets de-risked,

8:41 the less Bitcoin these guys have to sell to pay for their pivots.

8:46 Uh and so the these miners have been

8:48 big sellers of of Bitcoin over the last year.

8:50 That is starting to come down because the AI side of the business is on fire.

8:55 Uh so they don't have to sell as much and that's a really virtuous cycle.

8:58 That's still our kind of number one exposure in the node ETF at least.

9:03 And then there's kind of single stocks like a circle,

9:06 like a figure that are using blockchain to speed up certain core

9:11 parts of the financial system in a way that's bringing down costs.

9:15 And I think there'll be more losers

9:16 than winners when it comes to that technology.

9:18 Actually, the consumer is going to be a big winner and there'll be

9:20 a handful of companies that will turn from small and medium to to very large.

9:25 Uh but it's actually a the idea is to avoid

9:28 the losers as much as you can find those winners.

9:31 I want to back up a bit here to the ETF industry as a whole

9:34 as both of your firms have been

9:36 pretty big innovators in terms of delivering product.

9:39 The hot topic of lately has been the possibility of prediction market ETFs.

9:45 Just this week first movers have been delayed by SEC review.

9:50 Matt, how are you feeling about just the optionality

9:54 and and the possibility of these prediction markets ETFs?

9:58 Yeah, we have some R&D going in the space.

10:01 I think that the regulation is going after more

10:05 the sports side of prediction markets and that where

10:09 that may be where some of the larger ambitions

10:12 in the space get toned down a little bit.

10:14 But in terms of betting on the fundamentals of corporate America,

10:19 that's going to be a growing trend, a way that investors, you know,

10:23 can hedge exposures even within their traditional brokerage accounts.

10:27 So we're we're looking at the space and and encouraged.

10:30 Saul, what do you think?

10:31 I I agree with Matthew.

10:33 I think that we are looking at the space.

10:35 Sports is has a damper and that's primarily because

10:38 of the gambling rules that happen in each individual state.

10:40 And so there there's going to be some hurdles there.

10:42 But I think that the new younger investor,

10:47 and I I hesitate to even use that word, they like instant outcomes.

10:50 They like a lottery tickets,

10:51 they like games and they like binary instant outcomes.

10:55 And so if somebody can figure out how

10:56 to package whatever appetite is out there into an ETF,

11:00 those things will come to market.

11:02 But I don't think they're for long-term investors.

11:04 Lever prediction market I mean, woof.

11:07 We'll We'll see what happens on that front,

11:09 but interesting to hear that you've got R&D in the works

11:12 and that everybody is looking into this space as well.

11:15 Before we let you go, we want to get your outlook for soft commodities,

11:19 especially in relation to the derivative impacts

11:21 of the situation in the Middle East, fertilizer production, and the like.

11:26 What is your outlook there?

11:28 Well, obviously with the fertilizer disruption,

11:30 the disruption of supply and the the resultant rise in prices.

11:35 We we have immense interest in our grain funds.

11:37 Money's been pouring into grains.

11:38 And if you look at the flows in ETFs,

11:40 um the flows have been going into multi-commodity

11:43 funds and they've been going into agriculture.

11:45 And for for the reason being,

11:47 most people want some commodity exposure in inflationary environment.

11:50 Inflation probably isn't going anywhere anytime

11:53 soon with with energy prices elevated.

11:55 And with energy prices elevated and fertilizer prices elevated,

11:58 you could be coming into a multi-year problem.

12:01 Because we've got plenty of grains right now in the world,

12:04 but if you you cut back on your fertilizer this year,

12:07 and we're just planting right now.

12:09 So, you cut back on your fertilizer this year,

12:11 you will grow less, you'll you'll have less crops.

12:13 The residual effects of that, meaning the leftover crops at the end of the year,

12:17 which is usually quite healthy, may not be so healthy come next year.

12:21 And if fertilizer prices are still high,

12:22 farmers make those decisions in the autumn.

12:24 We only need fertilizer prices to stay this high

12:27 and supplies to stay this disrupted for another 6 months,

12:31 and it will affect next year's growing season, 2027.

12:34 So, it's a long-term issue,

12:36 and investors are starting to notice that, and we're seeing the money flows.

12:38 What do you think?

12:39 Uh well, I would say that when we look at commodities,

12:43 uh Bitcoin is a commodity that you can send to anyone in the world,

12:46 and you don't need the Strait of Hormuz to be open to do so.

12:49 Uh and that's why, you know, Iran was willing to accept Bitcoin to open

12:54 the Strait of Hormuz for certain vessels.

12:56 And part of the reason why Bitcoin's outperformed gold

12:58 and many other commodities since the war uh began.

13:01 Fascinating.

13:01 Well, thank you, Matt and Sol.

13:03 Appreciate your perspective.

13:04 Wide-ranging discussion.

13:06 Crypto prediction markets, commodities.

13:08 Uh remember, you can catch all of our other content at ETFedge.cnbc.com.

13:13 Thank you for watching.

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