Disappointed? Good.

Crypto Twitterati was convusling in spasms of ecstasy.

The SEC had performed its holy sacrament and blessed Bitcoin ETFs.

This was supposed to be the ultimate price elixir.

A god candle was imminent, and Valhalla was beckoning.

If at this point you were expecting a happy ending, you must be new here.

The trap door sprung open, right underneath all of the jubilant meme lords and insufferable experts, just as they were performing a victory dance.

There was no god candle, instead we got satan's wick:

Bitcoin dropped from a high of $49'000 on Thursday morning to a low of $41'500 on Friday evening, a fall of more than 15% in just over 24 hours.

How could this happen?

Weren't ETFs the holy grail?

How could the most successful ETF launch in history be a bad thing?

The technical answer is banal.

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Yes, the launch shattered all records with $4.6B in trading in just 24 hours. For context, the second most successful launch only did $1B on its first day.

But here's the thing - about 50% of the volume was with GBTC.

GBTC practically had a monopoly before the approval, charging 2% in fees. Now, there's 10 other ETFs and most of them charge around the 0.25% mark.

Presumably, a portion of the GBTC volume were outflows. We don't know yet for sure, because welcome to TradFi, where everything comes to a screeching halt while interns pore over excel spreadsheets and where the world stops spinning over holidays and weekend. So probably we'll find out after MLK day.

But again, the price action speaks for itself. The outflows must be significant.

Does this mean Bitcoin demand is being offset by GBTC redemptions? No, it just means that the SEC, in its infinite wisdom, insisted on cash redemptions as opposed to in-kind, which in turn means that switching between ETF products triggers Bitcoin dumping on the market. Great way to protect investors!

Anyway, that's the technical answer.

But here's the more interesting answer as to how this happened:

It's because markets are great at humbling the arrogant.

It's because vanity is the devil's favorite sin.

It's because crypto bros got just a little bit too cocky.

Post-hoc explanations are trivial.

Not a single person anticipated something that's obvious in hindsight. And no, the "sell the news" crowd got it wrong too. The rest of crypto surged.

Bitcoin is capitalism on steroids, it’s being battle tested and hardened. It will need to overcome every Darwinian pressure for free market selection. This will stress test your resolve in every imaginable way. HODLing is simple, but it’s far from easy.

To quote Warren Buffet:

“The stock market is a device for transferring money from the impatient to the patient.” This goes double for Bitcoin.

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