 Hello and welcome to this latest session where I can be talking about cryptocurrency with some guests who I'll introduce in a moment, but more specifically we're going to talk about seven metrics that support a bullish outlook for Ethereum and that's why, indeed, I've got the guys from the macro hive team on the call because it was from their very research that I wanted to get some more information about these seven reasons and very fortunate timing because it's the ninth of November. And overnight we've seen both Bitcoin and Ethereum hit fresh all time record highs, the actual crypto market now is hit $3 trillion US dollars for the very first time so really excited to have this conversation the most optimal timing where people of course are very interested in all cryptos but specifically the talk about Ethereum so just by way of introduction, I've got on the call Bilal Hafiz who's the CEO and editor of macro hive, and he was also the former head of global research like so Deutsche Bank and he's joined by his colleague Dalvir Mandara who's a quantitative researcher at macro hive as well so that further ado guys. The seven bullish reasons I'd love to get a breakdown and hear more about them. Great, thank you. Thank you very much. Thank you very much Anthony and yeah welcome everyone on to listen to this YouTube in this video. You know we are macro high. Traditionally, we tended to focus on more of what I guess now is called tradfire or traditional finance markets so you know bonds effects equities credit and so on. But in recent months we really have gone really deeply into the crypto market as well. One reason is it's obviously grown, you know exponentially in recent years, but also from a technology perspective, you know there's lots of elements of crypto that tells us that it's here to stay in one form or another. And from a finance perspective I think we're at an interesting juncture right now where the technology side is still there but lots of finance people are coming into the crypto space so this is in an interesting mix now of finance people kind of thinking about what crypto means. Now in terms of our work if you just go to, you know, the macro hive site, you know we have our normal, normal type of content but if you, if you click on here on crypto. We publish our pieces on crypto at the moment we're focusing primarily on Bitcoin and Ethereum. And I just wanted to show off a bit here hence going to this page here but back in a few weeks ago back in the summer, we said that Ethereum is likely to hit $5,000 in the coming weeks. And today on November the ninth. If I just pull up a blue boat screen here of Ethereum the ethers trading up close to $4,800. So we're almost at the $5,000 dollar mark. So we're, we're basically trading at close, close, at all time highs and close to our target of $5,000. This is Bitcoin, Bitcoin has also risen recently it had a bit of consolidation beforehand. And again, just to show off again, we published a piece a few weeks ago saying this is not the big Bitcoin correction where people were getting worried that this this consolidation here was the beginning to move down in Bitcoin we argued that that's not the case. Bitcoin is going to continue to rise. Now, what what gives us this level of confidence or conviction around this is that we built a framework to try to understand crypto. And what I find being a relative newcomer to the crypto world is that you tend to find that there's, you know, the research analysis side of crypto is almost like the the Wild West where people have outlandish targets and the real basis they look at charts or second analysis with breakouts and so on, which which has some value but it's not enough. And so what we try to do a metal hive is that we try to build some kind of framework on analytics around how to forecast crypto markets. So we use kind of flow positioning information but also a lot of on chain analytics, because one of the big advantages of crypto is that all the data is available to the public in one form or another because everything's on on the blockchain. And in this, in this video we're basically going to go through our framework for Ethereum, which is similar to our framework for Bitcoin as well. So the last piece we published on Ethereum, which kind of runs through the framework we published a week or so ago, where we talked about how we think Ethereum is going to outperform Bitcoin. And, you know, we provide some context here but if I just, you know, jump straight into the framework itself we essentially look at seven different factors that we think are most important for trying to understand the future direction of Ethereum and Bitcoin. I mean, before I go on, the one thing I just wanted to add is that I'm not really going to go into whether Ethereum has a future or not or whether Bitcoin has a future or not that's for a separate conversation, separate debate and we've had those debates before, said this is with the assumption that Ethereum's here to stay, given that, you know, how can we forecast Ethereum or indeed Bitcoin or other cryptocurrencies. So the first factor we like to look at is institutional demand and this probably has been perhaps the biggest story over the past year, year and a half since the advent of COVID where suddenly the mainstream finance community has gone into crypto. And it is really the technology guys or just people who had a particular interest in crypto and now suddenly mainstream institutions are investing in crypto as well. And the clearest manifestation of this is the rise of ETFs, ETF product exchange traded fund products which allows the average investor whether you're retail investor or whether you're an institutional investor to get exposure to Ethereum or to Bitcoin through a product that you're not allowed to buy. So many institutions are not allowed to hold Ethereum or Bitcoin directly on an exchange on the crypto exchange. Instead, they, they are allowed to hold an ETF, which has exposure to the underlying, which is Ethereum, or to Bitcoin. In the case of Ethereum, there's a whole range of ETFs that have been launched. Many of, most of them, there's a whole bunch of Canada, a bunch in Europe. I don't think we have one yet in the US, but I'm sure one is soon to come. We have the first Bitcoin futures ETF was launched a few weeks ago, which has helped the rally in Bitcoin. But nevertheless, there is ways for global investors to get exposure to Ethereum without having to hold Ethereum directly. So we track these ETF flows. Here shows you the ETF flows into Ethereum ETFs. And so what you can see is in recent weeks, there's been a surge of flows into Ethereum ETFs. And for us, this is a very bullish signal. So what you were seeing at the, at the end of the summer, or around October time, Ethereum prices started to go up. But there really wasn't much institutional flow supporting that, that, that price increase. But since, say the last, say three, four weeks, suddenly with this rise in either prices, you suddenly see institutional flow start to come in and it started to accelerate. So this metric for us is quite a bullish signal for Ethereum and either prices going forward. So this tells us that institutions are back in crypto, and they're buying Ethereum through these ETFs. And you'll see something similar on the Bitcoin side as well. So this is one metric. Is there any way for it's sorry about it. Is there any question on this for a regular person, let's say to access the type of outflow inflow data for this type of to obtain this metric, where would they go to do that. That's a good question. I mean, in terms of guessing this data. In theory, you could basically go to the ETF providers sites and I think they would each individual website would have the flow data that you can get. So you could kind of do it in a very manual basis. Otherwise, data providers, whether it's Bloomberg or Finnitive would have that data as well. I'm sure there's other cheaper lower cost data providers that may have this data as well. On top of that macro high what we're doing is we're publishing these charts on a weekly or bi-weekly basis so you could just come to the side and then you'll just see what the flows are so that's another way as well. So there are different ways, you know, some are more manual, you know, so there's kind of a range of ways you can get access to that data. Now the, so that's the first one, you know, trying to track institutional demand and for us the proxy the best way of cracking social demands ETFs. The second one is this whole idea of liquidity. And this is a bit more for the crypto geeks out there which is the idea that if people who hold the theorem so this is the people who actually hold the Ethereum coins directly so these are not people who use ETF so these are a bit more of the crypto native crowd. One measure of bullishness is how much liquidity to the people who hold a theorem what now so if you're very bullish, if I'm a hold up Ethereum and I'm very bullish on theorem. I probably don't care, I probably don't mind if I hold my theorem in a very illiquid form. So by illiquid form, what that means is that it's not easy for me to quickly buy and sell it. Now if I'm very worried about theorem, I'll want to hold it in a format which is very easy for me to quickly sell it. In the crypto world to simplify it, the liquid form would be to hold it and an exchange. So there's lots of exchanges, you know, whether it's Coinbase, Kraken and so on. There's a whole bunch of exchanges, which you can use to buy a theorem if you leave it at the exchange. It's very easy then to have a balance exchange, your theorem's held there. If you want to sell it, you can quickly just sell it because it's still on the exchange. So the balance is at the exchange. Alternatively, if I'm very bullish and I don't really want my theorem to be held by a third party, I can hold it in my private wallet. So I could have my special USB stick or version of it, which is a private wallet, and just hold it on there. And for me to kind of access that I need my really long code to be able to access access that that wallet. Or I could hold it in a custodian, a third party custodian, but in either way, it's held in a way which makes it harder for me to easily sell it. So if I'm holding in that form, that means I'm actually quite bullish, you know, so so I, you know, I'll go to an exchange to buy a theorem then I take it off the exchange and put it into a format that's illiquid which tells me which tells us the outsider is tracking these flows that actually this person's very bullish. What we do is we track flows onto and off exchanges. And the idea is that if this flows out of exchanges. That means that holders of theory are very bullish that they're basically taking off the exchange into a form that's illiquid. And so this is a chart which shows you exchange flows over the course of this year over 2021 and so you see in general. So basically in general people go into an exchange, they buy their theorem and then they take it off. So that means in general people who buy a theorem tend to be quite bullish. There are occasions though, where they push that if you're back onto the exchange and so you see here around Maytime this year you suddenly saw some spikes or flows back onto exchanges around this time and this was the time where Ethereum had a big rise and then fall. There's big correction here. And then over September or so when when the theorem was falling, you saw flows back onto the exchange. There's a level of bearishness. Now more recently there's only been outflows. It's been one way. So this tells you that the people who are buying Ethereum are basically taking it off exchange and they're comfortable having it in illiquid form which means that they're bullish on Ethereum. So that's the second measure we like to look at. So this is using exchange data, a bit more crypto native you could say. The third one is to look at the futures activity. So we know there's a whole bunch of futures have been launched that track Ethereum and also Bitcoin as well. And we basically like to look at the amount of open interest, the amount of contracts long and short together that are being used to trade Ethereum. So we don't care so much about positioning because in the end the positioning next to zero what we care about is just the size of that market. And the exchanges that have futures include Binance, FTX, Bybit, and there's a bunch of others as well. But Binance is the largest within the ones we show here in terms of the crypto native exchanges. But the overall open interest, the blue line here shows you that since around some October, we're tracking this on a shorter time period. There's a big increase in open interest, which is a bullish sign. Then if we look at CME, a traditional exchange which has a very large volumes in Ethereum and Bitcoin futures, you see something similar as well, where there's been a big increase in open interest as well. So this tells us that there's a lot of volumes or the amount of contracts on the exchanges are increasing. This kind of tells you that there's a lot of interest in the market from your institutions, as well as more crypto native investors. And again, this is a bullish signal for Ethereum. Now, the fourth one, and I'll talk about this before I hand off to Delve, we'll talk about the other remaining factors we look at is Hodler behavior. So Hodler is just kind of almost like a slang term to refer to crypto investors who tend to be buying hold of long-term investors. So it's basically another way of saying a long-term investors. So what we like to do is we like to track the behavior of Hodlers who have held Ethereum for different periods of time to get a sense of are people churning their portfolios a lot. Are they just buying and selling crypto a lot? Or are they just holding on to their Ethereum, which is more of a bullish signal? So the ones we care a lot about is we look a lot at the people who have held Ethereum for between six months and one year. So these are people who bought Ethereum six months ago, between six months ago to a year ago. So these would be people who are relatively new to crypto world. They've enjoyed some gains. And are they still holding on to their crypto? And are they making up a large portion of the crypto market? And what we find is that is indeed the case. Six months to one year, Hodlers are becoming a larger share of the overall Ethereum community. And that's a very bullish signal. We know that people who've held it for one year or five years or more are a fairly significant portion of the Ethereum markets. And the five-year plus people are holding around five, six per cent. The one-year plus community are holding around 15 to 20 per cent, the one to two-year mark. But what's interesting for us is the more recent entrants to Ethereum, are they still holding on? And they are. So our data shows they are holding on to Ethereum. And this for us is a bullish signal because what you don't want is you don't want just the long-term guys to be holding because they're the original kind of guys. If the newbies come into crypto or Ethereum and they're not holding on to Ethereum, then that's a bearish signal. In this case, it's a bullish signal which is which is constructive for Ethereum. So this is something we track. And this is based on chain analytics you can get hold of this data. I think what I'll do now is I'll hand it off now to Dalvier. Dalvier, do you want me to control the screen or do you want to control the screen? You can control the screen if you want. I'll go ahead and scroll down if that's easier. Okay, yeah, great. Let's do that. Okay, yeah. Thanks, Bill. So I'll go for the next three metrics we look at. And one of the first ones is that we look at the investor P&L that we're seeing in the crypto markets. So one of the benefits of the crypto markets is that we can track transactions much more easily than in traditional finance because everything is publicly available. So with that being said, we look at three different metrics and they vary between looking at unrealized profits and realized profits. So the first metric is called the percentage supply and profit. So if you scroll down a little bit, Bill. Yeah, so this is chart 11 here. So this is basically just showing you the percentage of all the circulating Ethereum supply that's in profit. And naturally, as the price rallies, you would expect this value to go up. And right now, it's touching almost 100% with the new all-time highs, which is something you kind of do expect. The next thing we look at is the size of these unrealized profits. So chart 12 shows you the unrealized profit as a percentage of market cap. And right now it's around 70% or this time as of when the article is published. So what that's telling us is that we've got 100% of the coins almost in circulating in profit. But the actual value of those unrealized profits are around 70% of market cap. Again, when the price rallies, naturally you would expect these ratios to increase. And then chart 13, this is a little bit more interesting. It's looking at a realized profit. So it's the realized value divided by the value at creation, or more simply, it's just a price sold divided by the price paid. So this is called the spent output profit ratio or SOPA for short. And a couple of interesting things about SOPA is that, you know, when the market is bullish and SOPA is increasing, it's telling us over the above one, it's telling us investors are realizing profits. If it's below one, it's telling us that they're realizing losses. Now naturally, if you look at the sort of the May bull run, when prices are registered to then all time highs, SOPA was increasing quite a lot with the price. That's telling you that investors are realizing profits at the new highs. If you look at the most recent bull run, so from October onwards, there's been spikes in SOPA, but it's bouncing between a lowerish level of about 1.04 and a highest level of 1.16. Which is relatively compared to the high scene in the May run of around 1.26. That's a much more muted increase. So what we're looking into that is that, well, this is a bullish signal in the sense that investors are not realizing profits at the new all time highs as much as they were before. So, you know, logically that suggests that investors are reluctant to realize profits at these highs because they feel that the price will increase further. So that's one thing about SOPA. The other thing is that historically looking at where this level crosses one in a bull market as it touches one or retest one. Historically, that's been a good time to buy and equally on the flip side in the bear market, as it retest one you kind of fade and it's been a good time to sell. So that's these these ratios naturally all three of them will increase as the Ethereum price increases. But you know, I think it gives a bit more of a context, you know, splitting out unrealized and realized in this way. So yeah, these three are giving very bullish signals at the moment. So onto that sort of different side of things. What we also like to look at what's unique about sort of cryptocurrency is that, you know, there's this concept of mining and hash rates and things like this, which is different to traditional finance and perhaps I'll provide a bit of context about what mining actually is before, you know, talking about each chart so Ethereum currently works on something called a proof of work consensus protocol. And it's instructive for me to say right now that it is going to transition to something called proof of stake going forward, but perhaps as a conversation for the time. But just to give a bit of idea of what proof of work means, the proof of work consensus protocol basically is a way of allowing the Ethereum network to come to a consensus about things like balance, transaction orders, you know, stops people from spending their coins twice, you know, offers resistance to attacks and makes the Ethereum network very maintainable. Now, proof of work, the idea of proof of work is it just sets the rules for the work that the underlying miners do now work in this context is just mining and mining is just a process of adding new blocks onto the blockchain. And without getting too into the technical details of it, you know, the more work that's done implies more mining that's done, which means more in the increases the length of the blockchain. And we can track this information so you one way to track mining activities to look at, you know, the compute power that's associated with the network so mining, you know, requires compute power and you know a lot of compute power to facilitate it. So what we look at is the hash rate on the network. So, the hash rate is basically just a measure of compute power of average compute power on the network. You know, as of the time the article is published it was around 736 terror hashes. The second, you know, currently latest numbers as of today, it's closer to around 786. So it's increasing. And more importantly, since bottoming out in, you know, late June after China crackdowns on crypto activity, it's had an upward trend ever since, and it's been consistently registering new all time highs. Now, from, from a perspective of markets, this means that the network has, you know, more security so it's lesser, you know, prone to attacks. It's prone to facilitate more transactions inherently because there's more compute power on the network. And we view this as a bullish sign. And in tandem with hash rates. We look at something called minor revenue. There's a bit of, just to give a bit of context about minor revenue. So what we look at is the comparison between Ethereum mining revenue and Bitcoin mining revenue. So we split it out. We consider it together, but there's two kind of types of revenues on a broader level. So there's fees that are minor in the network. So we look at, you know, how much money is going to be spent on the network. So what we look at is the comparison between Ethereum mining revenue and Bitcoin mining revenue. And we consider it together, but there's two kind of types of revenues on a broader level. So there's fees that are minors are paid for facilitating transactions, and then there's minted coins. So when a, when a minor adds a new block to the blockchain, they're rewarded with freshly minted coins. And these together form the total minor revenue. And what's, what's interesting about the comparison between Bitcoin and Ethereum is that, you know, ever since around August, you know, pretty, pretty largely outperforming Bitcoin in terms of minor revenue. And even in the latest sort of all runs that we've seen in both of them, Ethereum has seen a big jump. And whilst Bitcoin has been increasing, it's a much more muted level than what we're seeing in Ethereum. So we view this as a bullish sign for Ethereum. Again, so we'll have to scroll down a bit more. And then the last metric we look at, which is kind of specific to Ethereum in this context is the DeFi markets. DeFi stands for decentralized finance. And the key metric that we look at is, it's called total value locked. So the total value locked in DeFi is just the total sum of deposits of coins in decentralized finance protocols. So it could be in, you know, lending or other financial products, such as on, you know, decentralized exchanges and things of that nature. So what's important for us is that the DeFi space is, it's rapidly expanding. So, you know, here, the blue line is showing you the total value locked, which is across all protocols. So there's a bunch of protocols and a bunch of different coins in this space. It's not just Ethereum. And as of the time of publishing the article, it was around $250 billion. The latest number as of today, you know, it's closer to $284 billion. And, you know, that shows you just how fast this, this market is, is increasing. So what we look at is, well, how much of this, you know, booming DeFi space is coming from Ethereum. Now, what you'll notice is that, you know, since the beginning of the year, the share of the DeFi space that's coming from Ethereum has been decreasing. And this is almost natural because of the fact that there's so many different protocols entering the space. But by, by and large, Ethereum is still the biggest player in this space. You know, right now it's currently at around, you know, 184 billion of the 284 billion is coming from Ethereum. So, you know, that puts it around a 66 to 67% dominance. And just to give you an idea of how far above the rest, that is the next biggest protocol in the space Binance contributes around $21 billion to that space, around a 6 or 7%. So, you know, it's, you know, above almost, you know, 60 percentage points higher. And we view this again as a bullish side for Ethereum. So as the total value locked increases and proportion of that coming from Ethereum is still dominating. We again view as a bullish sign for Ethereum. So, you know, thanks for the deal there. And, and just to sort of summarize the main points here so you know at the end we kind of summarizes that essentially we look at seven different factors, all of them currently are bullish for Ethereum institutional demand and the way we do that if we look at flows into ETFs. We're doing increasing flows, which is bullish. We look at liquidity demands are crypto investors willing to hold Ethereum in a illiquid form, for example in a private wallet and that is indeed the case people taking money off exchanges into their private shares is bullish for ETFs, bullish for Ethereum. Number three, we look at futures activity is open interest is there more activity on these exchanges, whether it was crypto exchanges or more traditional exchanges and that is indeed the case that's increasing. We look at hodler behavior back to number four and we're finding that the key cohort for six months to one year people who bought it more recently, the newbies are indeed holding crypto Ethereum, which is bullish. We look at the P and L of investors and we're finding that investors are have either realized or unrealized profits, which is quite constructive for them to continue to hold Ethereum, we look at mining activity and we find that revenues of Ethereum miners and the hash rate compute power dedicated to theorem is very high, which tells you that there's robustness to the overall system. And then finally we look at decentralized finance space and we find that there's a lot of Ethereum. That is being taken out of, of supply to be locked up to to underwrite the decentralized finance space the device space which means that there's less supply of Ethereum in full investors, which then naturally boosts up the Ethereum price. So these are the seven factors we track this on a regular basis, you know, for updates, if you just, you know, if you just come to the side you'll see the regular updates we do this for Bitcoin as well. And, and hopefully it provides a good framework and add some rigor to crypto markets in a way that you don't really find elsewhere and I mean researchers I kind of like to have some frameworks. And, and I think this is something that's quite useful as a way to kind of feel a bit more confident about your holdings or your investments in crypto space. So, thank you guys for the, for the rundown and what I'll do is, if we drop a comment below if you have any questions at all, I'm sure the three of us be more than willing to pick them up. So just just ask a question. If you have one, what I'll do as well is I'm just going to be loud has kindly said that because of this kind of one or video that we've done today that he's happy that if you go to the macro hive website and you just code, amplify 50 or one word at the checkout, and you'll get a 50% discount on your subscription for your prime plan so for one I for sure I mean I my job is tracking news that I don't have time to go to the granularity that these guys do, and I mean on them to do that. And so, you know, that's, they're the masters of that craft and I for one definitely use that resource for the purpose that they've just discussed so I'd highly highly recommend it but thank you for for watching. Thank you to you both for attending and I've got another episode coming out where I'm talking to a specialist in fintech about the metaverse, which will be coming out as well later on this week, which has a nice tie into some of the questions that we've had here as well so so stay tuned but Bilal, thank you very much. Great. Thanks for having us. Thank you.