I found HBAR’s Available Supply Is Quietly Disappearing

[00:00:00]I found that HAR's available supply is quietly disappearing. This video is going to be trying to connect several pieces of data together to give you a picture as to what is going on with Hideira HAR. So, hi, welcome back to the channel. My name is Nick and I'm just out with you guys on a walk through the woods to kind of try to explain what on earth is going on with Hideira's HAR and what the available supply dynamic that I found and how it can potentially change the entire game for you as a HAR holder.

[00:00:36]So, as I get into the video, make sure to smash that like button, subscribe if you are new, and let's go ahead and move to a location to start talking about what is going on with the Hideira supply. Okay, so let's start with what we're actually talking about. We are talking about Canary Capitals HAR spot ETF under the ticker HBR.

[00:00:57]Now, this is particularly important because we probably all already know what an spot ETF is, but I'm going to just kind of quickly recap it so that we're all on the same page here, right?

[00:01:08]So, a spot ETF essentially is a way for um the traditional stock market or stock participants if you will, people who have brokerage accounts, institutional access, uh hedge funds, pension funds, sovereign wealth funds, family offices, investment advisers. Basically, they all have brokerage accounts, right? And so, they can buy anything that's on a brokerage account, but they can't necessarily open up a crypto exchange and smash that buy button. What a spot ETF does is it basically grants those people the kind of access to the crypto assets that we as retail investors would actually normally already have. It's actually a little thing down here. Don't know what's a little bit of a clearing.

[00:01:52]Um, and that's kind of where this video is kind of going to come in here because what we're talking about isn't just that, oh, I spot ETF exists, therefore, you know, H bar is going to go to the moon. We're trying to be talking about the mechanics of how this works, what's changing within the Canary Capital ETF and why that matters for HAR holders as I kind of navigate a little bit of the wilderness here. Um, so yeah, basically that's what we're looking at and the ability to affect the available supply.

[00:02:27]Now, this is the part that um I don't think many people really truly understand or appreciate. So, we're going to break that down. And so, what we're talking about specifically is the difference between total supply, circulating supply, and the available supply. Right? These are different mechanics and we need to understand why each one of them is important. Right? So we as retail investors typically think in terms of like circulating supply and total supply. We don't really talk about or mention much the available supply, but it's the spot ETFs that are affecting the available supply, right? And that's the important distinction between all of these different variables. So the circulating supply is basically just tokens that are out there not held in treasury or tokens that maybe haven't been minted minus from the total supply right but the available supply is what's available for purchase whether that's on a centralized exchange in a decentralized exchange or via OTC and that's a different number than the circulating supply right and that is where the mechanics of a spot ETF really start to come into play right so it's important that we we get into to those mechanics and which we're going to do next. Okay, so let's start by breaking down the pipeline for spot ETFs, right?

[00:03:53]Because there's there's a few different mechanics to this, right? So creating a spot product is is one one thing, right?

[00:04:01]But actually operating and running the spot product is going to be slightly different, right? So, as you guys probably already know, you know, within the crypto space, you have all the headlines of, "Oh, new ETF filings here, new ETF filings there." But the mechanics of the paperwork of them, they kind of get lost in translation. Not all ETFs are going to operate the same way.

[00:04:25]There are leveraged ETFs, there are spot ETFs, there are hybrid ETFs, right? And so, we can't treat an ETF just, you know, all the same, right? there are different variations of them. So it's important that we kind of make those distinctions. And Canary Capitals HBR or HAR ETF, it is a spot product. Now that basically means that it must have and own the actual shares or actually has to own the H bar to back the shares. Right?

[00:04:56]So let's talk about authorized participants. Now, authorized participants are the people or the organizations, the institutions that sit behind the ETF product and their job is to basically create shares in the ETF, back those shares or redeem shares and sell the underlying asset or buy the underlying asset. Now this is important because there is a direct relationship between what the um what what a share is in an ETF and the actual tokens that are being held. Now spot ETFs in the crypto sense they actually have to buy hold and secure the underlying asset that is backing the share. Okay that's the first thing we need to kind of quantify here.

[00:05:44]So for HAR that means that when a new share is created by the authorized participant of the Canary Capital HBR ETF essentially they have to go out there and they have to buy HAR tokens to back those new shares right and of course the same in reverse where if people shares are redeemed they have to sell off some of the HAR tokens and so forth right in order to balance everything out and that's what an authorized participant does right they basically create shares, redeem shares, buy tokens, sell tokens. And so now you can see that the actual HAR spot ETF has a direct impact on the price action of the HAR token. Right now, we can get into the nuances of of that in a moment because it's not as necessarily as as easy and as clean as maybe it might sound on paper. On paper, it sounds pretty straightforward. Someone wants exposure to HAR that, you know, can't set up a crypto exchange. Therefore, has to have, you know, some kind of legal rapper like an ETF to facilitate that.

[00:06:53]They go there, they go use their brokerage account, they find the Canary Capital, HBR ticker, and they go ahead and they buy some shares in the ETF. The authorized participant then has to go take that funding and go and buy HAR tokens to back the new shares that were created. That is the pipeline, right?

[00:07:11]It's pretty straightforward on paper, but there are some nuances to that with how those tokens actually make it all the way to Canary Capitals vault or the custodian that's looking after the tokens that back those shares. So, the authorized participant actually has a bit of a problem here, right? Because like I said before, institutions can't always access crypto exchanges, can they? Right? Some can, some can't. And in most cases, the authorized participants can't necessarily source the tokens, not all the time, for many different reasons, from the centralized exchanges. Instead, they have to go to a market maker. A market maker might also be an OTC desk. So, let's talk about what's been going on with HAR and the authorized participants and those tokens. Let me just go and find a little quiet spot because I seem to be bumping into people here. I'll be back 1 second.

[00:08:09]Okay, so let's start by talking about the flow, right? The flow from a traditional investor to investing in the HAR ETF to how those funds move through the system. Right? So let's just hypothetically think about some kind of traditional investor who has wanting exposure to HAR goes out finds the Canary Capital HR ETF like I mentioned before through the ticker HBR on a brokerage account right they go ahead and deposit their funds buy shares in the ETF right the active participant now has to either balance those new inflows of shares against any redemptions and if there are more inflows than there are redemptions go out and acquire tokens.

[00:08:55]Now, like I said earlier, that's not easy for an institution to do. So, they go over to a market maker or an over-the-counter desk, right? An OTC desk and then they go ahead and they buy those tokens and they move them from the OT desk OC desk if I can talk into a custodian.

[00:09:17]Usually, it's the approved custodian which is a part of the original ETF structure which the SEC would have approved. In most cases, that tends to be Coinbase custody. Those tokens then move over to custody to back the shares of the ETF. Now, here's the part that a lot of retail investors simply glance over. They hear OTC and they think it doesn't affect the public order books.

[00:09:39]But that's not technically true, right?

[00:09:42]the public order books are very much affected by the ETFs, but it takes quite a quite a long time to actually reach that level. So, let me kind of explain how this works briefly and then the importance of that to the liquid supply of HAR tokens that you and I are really going to care about, right? because the available tokens or the liquid supply of tokens is ultimately what we're going to look to decrease whilst increasing the demand and that's going to create price appreciation for HAR. So what tends to happen here is OTC desks source HAR. Now this source of HAR can come from many different locations. Centralized exchanges are one of them and we see this all the time with the deployment of sophisticated algorithms. Right? Right?

[00:10:32]We often kind of assume that it's a whale, right? Oh, a whale is buying X token every 28 seconds on these different centralized exchanges, right?

[00:10:42]And they do that. These algorithms operate that way because it prevents any kind of slippage, right? If you create a large order, if no TCS went to a centralized exchange, smashed the market buy button, right? [snorts] The price would just rocket. And that's that's not how they want. They want to acrewue tokens at the cheapest possible price. Now they can do that in many different ways. One of them is using algorithms to snipe entries and cause market fatigue. Right? The other way to do it is to find private sellers who have an abundance of tokens, early investors, maybe treasuries and you know maybe even foundations looking to liquidate portions of their tokens and they don't want to affect the public market market price. So essentially they sell them out to the OTC desks, right?

[00:11:30]But here's the important part that retail investors they glance over because it's not it's not immediate.

[00:11:36]It's not right now is that eventually the private sellers run out. Eventually the OTC desks the market makers are forced to acquire tokens at higher prices. Once the lower prices are depleted, once tokens are sold at the lowest levels and that's that completes, the market has no choice but to react to the demand, right? And so that's what why that's the importance of the spot ETFs. And in this particular case, it's very very slow, but slow for a couple of reasons with Hideira because it's only one ETF. We haven't got 10 or 20 different ETF products here in the United States, right? You've got just one at the moment. And so the demand from that one ETF is going to be slower to kind of get into that point where you've depleted the reserves from private sellers and of course the capitulated retail sellers on the open market which is where the market makers and the OTC desks will actually have to source eventually. So it's quite important that we understand the mechanics of that flow because a lot of retail investors they misunderstand it.

[00:12:42]They think, "Oh, tokens are just coming from OTC and it's never going to hit the public order book." Well, no. OTC funds their tokens from the public order books and from private sellers. And it's just a matter of time until the easy selling turns into hard selling. And at some point in the future, when those ETF inflows continue to increase, there's going to be a demand for tokens that the OTC desks do not have, and they'll have no choice but to acquire them at higher prices. And that is the mechanics of the ETF. So how many HAR tokens have been accumulated by the Canary Capital HBR ETF then? Well, 549 million. Now that is not a small amount.

[00:13:27]I mean in contrast to the total supply, it might seem particularly small, right?

[00:13:33]There's 50 billion tokens in total and yet this one single ETF has absorbed 549 million of them. That is pretty significant considering the market has been in pretty much just freefall or choppy sideways movements for pretty much since this entire product has existed. So you can see that there has been demand for HAR from the traditional investor. Of course, that can be retail investors looking to remove some kind of self-custody risk by essentially just buying shares in their brokerage accounts instead. But there's also institutional interest in there as well.

[00:14:14]Now, this is important because what's happened here is the liquid float of available tokens that are for sale has essentially decreased by 549 million.

[00:14:26]That's a pretty decent chunk of the circulating supply that just isn't available within the market anymore, right? And and that's not to say that they can't come back to the open market.

[00:14:37]They can, but it's very unlikely. Most ETFs, they operate on different time horizons than that of a retail investor, right? A retail investor, we often think in months, right? Or in worst cases, days and weeks, right? But for institutional investors, they don't think in short time frames. They think in years, right? So when you have inflows of significant amounts of capital and large amount of token absorption into these ETF products at this particular kind of level, those tokens don't typically come back for years, right? So what we are seeing is a squeeze on the available float of HAR tokens. But of course, you know, a squeeze on the available supply is only really half of the equation because we can see there's, you know, very little demand at this point in time across the spot markets, right? We can see that with the current price action. But like I mentioned earlier, OTC desks, market makers, they source tokens from retail investors who are capitulating and feeling frustrated and they just want out. They want they want some form of money back even take a loss because they can't handle the pain anymore. Right? So a lot of the opportunities they lie now because OC OTC desks and the um market makers they are amassing and they're accumulating tokens now for where the products are going in the future. Right?

[00:16:11]So when we start thinking about how the Canary Capital ETF has already absorbed 549 million tokens, it is likely to absorb significantly more in the coming Let me just turn that off. uh in the coming months and years, right? And that it tends to be not always, but it tends to be almost a one-way flow for a long time. So, that kind of sets us up for a potential then for Hideira to see price action in the future because half of the equation is kind of being handled by this ETF at the moment. 549 million tokens. They have been removed from the open market from the OTC desks from capitulated retail investors and has now moved into custody of the ETF. Maybe not permanently but for a significant period of time. Ultimately, the supply it is getting tighter on the centralized exchanges and it is getting tighter with the OTC desks. Okay. So what does this mean then for the price action of H bar?

[00:17:15]Because ultimately that's what you care about. It's what I care about. It's what we care about as investors, right?

[00:17:19]Because we're investors. We're not donators, right? We invested our capital into HAR tokens because we want to see an ROI, a return on our investment, right? If we didn't want an ROI, we didn't want a return on our investment, we would have just choked this up as a a donation to the Hideira Foundation or whatever, right? But it's not. We want a return on our investment. So what does it mean for the price action? Well, it means that that not that there's a a guaranteed price flaw because there's demand for the token. It means that ultimately the future looks pretty bright, right? Because the way I look at this, and again, it's just my personal thoughts and opinions. You know, I'm not a financial adviser. I can't give financial advice. just kind of uh this video is forformational and maybe even entertainment purposes as I walk through the woods. Um but you know ultimately the crypto market's volatile. You could lose everything. So it's very important that you do your own research because at the end of the day your money it is your responsibility right? But the price action and why I think this is important for the price action, not that it's going to guarantee anything, but ultimately that as the supply contracts in and as you know the market starts to heat up as a result of that because let's just face the mechanics here, right? The very basic mechanics of this is that if demand were static and it didn't move, but the supply were to shrink and come down, the price has to react positively. it has to balance out between that imbalance of the supply and the demand. So for that to work, we need to see an increase in the price action.

[00:18:53]And that's just assuming that there's no additional new demand. But as price begins to move, demand also increases, right? So FOMO kicks in, the fear of missing out. And as that happens, you tend to find that the price action responds more positively, which then creates a bit of a flywheel effect, right? Supply continues to go down and shrinks and contracts. And while it's shrinking and contracting, it's causing the price to go up, which causes more FOMO and more people investing and so forth. So, it becomes a bit of a a flywheel effect where the price action tends to move more positively. Of course, that's only if we start where we are, right? Where the supply is contracting in, it's getting tighter and tighter and the demand is static. But what happened if the demand r were to rose or if the demand rose or were to rise if I can get my words out then actually that that mechanics that flywheel would accelerate faster and we would see more explosive movements. So, what I wanted to kind of put out with this video is that the Canary HAR ETF is a potential catalyst for significant change within the economic design of of the Hideera ecosystem in terms of the number of tokens that's actually available for purchase on the exchanges. Again, we don't get confused with the total supply or the circulating supply. The only number that matters to us as an investor is how much of that supply is actually available to be purchased or sold at any given time, right? Because that is the true mechanics of the equation, right?

[00:20:29]We don't really need to know about the circulating supply or the total supply unless that supply is freely moving back towards exchanges ready to be sold.

[00:20:38]Right? And again, it's not perfect equation because there are mechanics here for over-the-counter trades and private sellers that make it a little bit more complicated. It's not as easy as just looking at the order books on centralized exchanges. But from what we can see, the Canary Capital HBR ETF has had a pretty positive impact on squeezing the supply. 549 million is a good number, but I have a feeling it's just the beginning because we spoke about this the other day. They've filed paperwork and uh looks like they're getting approved for the staking element, right? 549 million Hideira tokens could be staked earning passive returns to pass back down to their investors. So again, we can see that this particular ETF, I don't think this is going to be the only one, by the way. I think we're going to be this is going to be a blueprint for additional Hideira HAR ETFs in the future where we see the exact same setup, right? Put it out there, get the traditional investors kind of buying into it, using those tokens, staking those tokens, securing the network, earning staking rewards, then distributing that like a dividend.

[00:21:53]And that is what we see with other ETFs as well, whether that's Salana, Ethereum, and so forth. So yeah, I think the future's looking pretty bright for Hideira with the supply constraints that are coming. Of course, this is all external to the actual use cases as well. This is just pure speculative kind of exposure to HAR tokens, right? And that also when we start layering in use cases around, you know, payments or AI agents and so forth, well, the the future just looks bright to me. But you can let me know your thoughts and opinions on all of this down in the comments below. But I think that's going to wrap up this little walk and talk video if you found it useful. Remember to smash that like button, subscribe if you're new, and I will catch you all in the next