BTC US$95K. Institutional crypto buys surge.
In Markets
Argentina's president Javier Milei's disastrous involvement with the LIBRA coin appears to have been the final straw for some memecoin holders, with a sentiment shift online this week against extractive memecoins and Solana in general. Various unverified estimates are floating around, suggesting memecoins may have extracted up to US$6.6 billion from retail buyers. LookOnChain data shows the stablecoin supply on Ethereum surged US$1.1B in the past week, while US$772M exited Solana. Solana finishes the week down 12%, with many meme and AI coins falling much further. Meanwhile, Bitcoin finishes the week down 3% to trade around US$95,827, while Ethereum gained 2% to trade at US$2,747. ETH has seen a number of false starts to a potential recovery in the past few months. Still, Joel Kruger, a market strategist for LMAX Group, is optimistic there’s "evidence of ETH potentially wanting to finally put in a major bottom against Bitcoin after down trending since 2021.” Closer to home, interest rates are tipped to fall today, with lower rates on savings accounts sometimes encouraging investors to find better returns from more risky assets. XRP gained 8%, Dogecoin (1%), Cardano (13%), while Shiba Inu was flat. The Crypto Fear and Greed Index is at 47, or Neutral.
From the IR OTC Desk
Market Overview
In a move predicted by everyone, the Reserve Bank of Australia (RBA) reduced the cash rate (for the first time in over 4 years) by 25 basis points to 4.10%. If you listened closely, you could just hear the collective sound of economists patting themselves on the back - just barely drowning out the groans of Aussie importers, travelers, and anyone with a USD-denominated loan as the Australian dollar took another step in its ongoing mission to see how low it can go.
In a statement from the RBA’s board, they mention:
In the US, recent higher-than-expected inflation data has reignited investor concerns, leading to a brief dip in Bitcoin's value below US$95,000. This development has tempered expectations for a Federal Reserve rate cut in March, as persistent inflation may prompt the Fed to maintain current interest rates to combat rising prices.
Gold prices have seen a modest decline, with the SPDR Gold Shares ETF (GLD) currently trading at US$266.29, down 1.50% from the previous close. This movement suggests a cautious sentiment among investors, possibly due to ongoing inflation concerns and market volatility.
On the OTC desk we have seen a balancing of flows when compared to last week’s outsized bids. The USDT price has settled around the peg as well, despite the doom and gloom in the alt coin market, which may suggest traders aren’t exiting the market completely, but poised for their next trade? Time will tell.
Key Economic Calendar Events (SGT):
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In Headlines
Milei gets burned by crypto
In a scandal that made international headlines, Kelsier Ventures reportedly roped Javier Milei in to endorse its Libra project in a social media post. The token surged to US$4.6B FDV as memecoin speculators piled in. The coin began to tank as liquidity was gradually removed, with reports insiders made more than US$100 million from dumping Libra. Milei distanced himself, saying, “I was not familiar with the details of the project,” and deleted his post, with the coin subsequently crashing 94%. The President has been accused of fraud, and a judge assigned to investigate. He may also face impeachment charges. The incident saw the Argentinian stock market fall by more than 5% at one point. Loads more shady stuff reportedly went on, including undisclosed promotion by influencers. Kelsier founder Hayden Mark Davis did a long interview with Coffezilla, during which he allegedly admitted to many things, including sniping Libra and some involvement in MELANIA.
Everybody bought Bitcoin
The fourth quarter institutional 13F filings are out and show that Abu Dhabi’s sovereign wealth fund purchased US$436.9 million of BlackRock’s Bitcoin ETF IBIT and is now the seventh-largest holder of the fund. The Wisconsin State Pension Fund more than doubled its stake to US$321.5 million in IBIT, while Billionaire Paul Tudor Jones nearly doubled his own stake in IBIT to US$445M. “The accumulation by sovereign wealth funds, pension funds, and other major institutional investors is just getting started,” said Bitwise senior investment strategist Juan Leon. Interestingly, Ethereum ETF ownership by institutions jumped from 4.8% to 14.5%, showing ETH gaining momentum, while BTC ETFs ticked down from 22.3% to 21.5%. Analysts at Bernstein put out a report stating heavy institutional buying, along with the potential for a Bitcoin reserve, suggests we're gearing up for the next leg of the bull market.? “The confluence of adoption by banks, institutional investors, corporates and eventually sovereigns is positioning bitcoin as the clear challenger to gold,” the analysts said. “We see asymmetric upside for Bitcoin.”
a16z head of policy to become CFTC chair
The crypto industry takeover of the US government continues, with Andreessen Horowitz's (a16z’s) head of policy Brian Quintenz picked to head up the Commodity Futures Trading Commission (CFTC). A former CFTC commissioner, Quintenz is a big crypto fan, while a16z is a major crypto VC firm that poured tens of millions into the Fairshake political action committee supporting pro-crypto candidates. The CFTC is expected to become a major regulator for crypto. Meanwhile, sources told Unchained that Trump's plan for a Crypto Council is being put on ice to avoid conflict between warring factions in the crypto industry. Instead, the White House will likely gather a rotating group of crypto leaders together for a series of summits on particular policy issues.
ETH staking ETFs coming
The New York Stock Exchange has filed with the SEC on behalf of Grayscale to introduce staking to its Ethereum ETFs. If permitted, Grayscale would stake its Ether and provide the yield back to holders of the ETF, though it would not guarantee any level of return. Earlier in the week, CBOE applied on behalf of 21Shares to add staking to its Ether ETF. SEC commissioner Hester Peirce has said she believes staking approval is only a matter of time. The SEC has also been meeting with crypto firms and lobby groups this month to discuss regulatory issues.?
ETH devs agree to stop forking around
The ultra-cautious Ethereum All Core Devs call last week resulted in an agreement to accelerate the roadmap, likely in response to community concerns. “Pretty strong consensus from the Pectra Retrospective post that the people want faster fork cadences,” Nixo Rokish, a member of the EF’s protocol support team, said on X. “That’s going to mean less dilly-dallying about scope and more aggressively presented opinions.” The Pectra hard fork will hit testnet in late February and is looking likely for April. The devs set an April 10 deadline to finalise next fork Fusaka, which will add PeerDAS and give a big boost to data blobs to enable the L2s to scale faster. Meanwhile, in the wake of a 20% increase in the gas limit on the L1, creator Vitalik Buterin outlined why the L1 should aim for a 10x increase in the gas limit.
Hong Kong pushes forward with crypto ambitions?
As Bitcoin hits record highs following Donald Trump’s re-election, Consensus Hong Kong is set to test the city’s push to become a global digital asset hub. With attendees from over 100 countries, the event highlights Hong Kong’s efforts to bridge traditional finance and crypto, even as regulatory uncertainty lingers. Meanwhile, with stablecoins pegged to fiat currencies like the US dollar gaining traction, the Hong Kong Monetary Authority (HKMA) is moving to introduce new regulations, signaling a more structured approach to digital asset oversight. The Independent Reserve team will be at Consensus Hong Kong. Reach out to the team if you’d like to connect.?
Episode 20 of the IR Crypto & Bitcoin podcast feat Michael Bacina & Harrison Dell
In Episode 20 of the podcast, host Lee Eaton is joined by Harrison Dell and our Web3 royalty, Michael Bucina.
Michael Bacina shares his experiences in the Cayman Islands, including his transition to a boutique Web3 law firm, while Harry discusses the burgeoning Brisbane crypto scene. We cover the unique legal landscapes of the Cayman Islands, the challenges and opportunities in crypto law, and the implications of recent regulatory changes in the US under the Trump administration. Dive deep into the niche yet expanding world of crypto legalities and the strategic importance of assembling a specialised team in this complex field.?Whether you're curious about the local crypto scenes in Australia or the financial legalities in international waters, this episode is packed with insights you won't want to miss. Catch the full episode on YouTube.
Bits and pieces
FTX begins repaying the first instalments of around US$16B in total to small creditors this week. Around US$2.04B SOL will end up hitting the market. The Australian Transaction Reports and Analysis Center (AUSTRAC) has sent alerts to 50 crypto exchanges and remittance providers over concerns they may not be reporting suspicious activity. It refused registration renewal for six providers because key personnel were charged or convicted of crimes. With 20 US states proposing digital asset reserves, VanEck estimates that if all of them were approved it would see the states buy 247,000 Bitcoin. Twelve US states already hold US$330 million worth of Strategy stock between them.
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