Bitcoin ETF Explained: How Does It Affect $BTC Price?

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Bitcoin ETF explained for dummies: how does the ETF work and how will it affect bitcoin and the crypto market as a whole. Why you should focus on the best looking / hyped coins and forget the ones who are showing relative weakness. The difference between good setups that don’t work and bad setups that work out. How to avoid large drawdowns (stop looking for home runs, slow and steady wins the race).

Timestamps:
0:00 Bitcoin ETF Explained
2:54 Good Setups That Don’t Work vs. Good Setups That Work
4:29 Pick The Best Looking Coins
5:44 Avoid Large Drawdowns (Slow and Steady Wins the Race)

eli5 explain like I’m five 5
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Let’s say the ETF is a bag of M&M’s the ETF is a mixed bag of things right so the ETF is in charge of buying Bitcoin right so every ETF has its own proprietary mixture of how many Bitcoins it holds right so let’s say a share of

The ibit let’s say ibit is $20 you own a share of ibit which means you own a share a fraction of however many Bitcoins that black rock owns So if Black Rock has 500 M&M and and you own one out of 500 shares you own one Eminem you don’t

Necessarily own one whole Bitcoin which is like one whole bag of Eminem right you own a fraction of whatever amounts of Bitcoin that they have and as this number goes up so when the Black Rock Spot ETF Bitcoin shares go up they use a certain amount of money that comes in to

Buy more Bitcoin so don’t think about it like oh partic participants are directly buying Bitcoin they’re buying into a share that is a fraction of a Bitcoin just you’re getting some M&M’s out of the bag you’re not buying a bag of M&M’s is what I’m trying to say and you might

Get red you might get blue you might get green you might get yellow whatever orange but the point is you don’t own the entire bag you don’t own a Bitcoin you own a fraction of a Bitcoin and every ETF has their own proprietary pricing on how they Factor this in which

Is why when people say oh there’s $5 billion of inflow it isn’t and this is the most important part right when people say oh there’s billions of inflow it doesn’t literally mean that oh man $5 billion is hitting Bitcoin it’s $5 billion entering into this mix of

However they formulate this and of this maybe the net asset impact is maybe a couple hundred million maybe half a billion right we don’t know the full numbers at least I don’t but yeah that’s how it works so a lot of times don’t confuse oh there’s 5 billion of capital

Inflows into the ETF as a oh they are going to take $5 billion and buy Bitcoin that’s not how it works cuz I do see some people who are like wow that was 5 billion and Bitcoin is down on the day even if they did $5 billion would send this to alltime

Highs okay if there was 5 billion dollar of buying on bitcoin this is going to alltime highs because if you think about how sailor can carry bitcoin price with like 300 million 400 million 500 million and he’s carrying Bitcoin prices for months imagine what something that is 10 times that amount could do

Overnight right like that’s just not plausible even though crypto people are degenerates and illogical they don’t think that that’s impossible if a $5 billion Market order hit the books we would all be retired every one of us would be retired okay of course you’re long here right like anyone who

Is long I don’t want you guys to feel stupid I don’t want you to feel like you up and that was a terrible idea why would you long why would you have any exposure into the ETF because listen this is what you saw you saw a breakout

A retest and albeit this is a sweep right here but again it’s hard to attribute if this is like a real sweep or if it’s just some ETF Shenanigans with liquidations you know kind of some crazy first time thing that you’ve ever seen we’ve never seen a spot ETF for the

US before so who knows right who knows how crazy this is but this is your price action and I would say N9 out of 10 times if I saw something like this I would recommend people to take it so you have a monthly consolidation right here

34 days of just sideways you get a breakout into the first spot ETF that we’ve seen I think you take this trade N9 out of 10 times even though this didn’t work out you still take that trade because it’s very important to distinguish between what’s a good trade

That didn’t work out versus what’s a bad trade that did work out these are two very very important things that people need to distinguish right because so many times we take bad trades and they work out and we attribute it to damn we’re so good instead of looking

At it and going okay well I got very lucky that this trade worked out but it shouldn’t have right for whatever reason this is a a trade that you made money on that over the long term you would be bankrupt right and this is a trade that

In the short term didn’t work out but in the long term if you spam this setup you would make a killer you’d be in a profit that’s how I identify these two let’s do beam sure I lied we’re not doing Beam Beam looks like dude it could

Bounce but there’s so many better coins for you to trade right like when we talk about all the coins that we went through there are coins that look like this right there are coins that look like this and when it comes to harder market conditions it’s just better to pick the

Good coins and if you have leftover Capital that you want to allocate then you can buy your beams you can buy your your big times you can buy your GMX or whatever you know but focus on the coins that look good first those are your lowest hanging fruits you know they tend

To have better liquidity as well they tend to have more hype behind them a narrative there just better coins to pick as a Trader right it’s like you’re at a grocery store and this grocery store is known for their Seafood well don’t buy the cereal go get the

Seafood right like they’re known for their fresh fish go get the fish what are you doing that’s how I always think about it every day you’re going to the grocery store and every day that grocery store has a sale going on or a a specific item that is hot and you want

To pick up that item unless you have a personal affiliation with some other thing because maybe you’re gluten intolerant so you can’t have cereal okay cool then you can only trade eth good luck JK says LMA with using candle closes as stops how do you avoid

Large draw Downs I don’t size in a way that I would get large draw Downs I see a lot of people who post their trades online and of course they’ll share with you like oh I made $4 million or I made 500k or I made 200k right and for

Them in that portfolio size 4 million 500k whatever is like a home run it’s a oh my God I took on a lot of risk relative to my portfolio size I’m not a believer that that’s a good way of trading it’s a good way to get a home

Run but I just don’t think it’s a good way to survive in the markets it’s a recipe for disaster so be careful when you see those things online and I believe the best way to trade is 50,000 here 100,000 there a couple Grand there right like you’re just accumulating

These small wins and inevitably you accidentally hit the 30% winner oh God I got into a position and oh it ran and you’ll get those just on accident almost right but when you go searching for it and every setup is a large position every setup is a home run you really set

Yourself up for striking out you’ll notice that a lot of baseball players a lot of basketball players a lot of even boxers and whatnot the Home Run shot is not always the one that they go for sometimes it’s a 80% swing sometimes it’s a layup not a slam dunk because

There’s a strategy that people are following so I I never size I never size in a way where if I were to get stopped on my candle clothes that I’m going to be harboring such a large draw down that it took me months or weeks to climb back so that never happens