ARP's Crypto Digest

General Digital Asset Market View:

This week, the Bitcoin ETF market has seen significant activity, with daily trading volumes displaying notable variability. The total amount of Bitcoin traded through ETFs reached 40,706 BTC, with daily flows ranging from -234.4 BTC on February 3 to 340.7 BTC on February 4. IBIT (BlackRock) led the market in trading volume, with levels ranging between 332.6 BTC and 1,119.9 BTC. The ETF’s ended the week on a strong note with Bitcoin ETFs having a significant inflow of $171.3 million worth of BTC, maintaining constant growing institutional interest.

Macro:

Key releases to watch for in the US this week include the run of January pricing data (CPI, PPI, IPI), retail sales and IP. Elsewhere, UK Q4 GDP, Japan’s PPI, and Swiss CPI will be worth keeping an eye on. From a monetary policy POV, Powell and Bailey are both due to speak on Tuesday and Wednesday. The Munich Security Conference will be important to monitor over the weekend with Trump’s proposed Ukraine peace deal expected to be unveiled. Chinese retaliatory tariffs are due to commence Feb 10.

More Crypto:

Bitcoin aligns with global liquidity (M2) 83% of the time over any given 12-month period, outperforming all other major asset classes and establishing itself as a reliable indicator of liquidity conditions.

Bitcoin’s correlation with global liquidity is high but not immune to short-term deviations caused by idiosyncratic events or internal market dynamics, especially during periods of extreme valuation.

Stablecoins have revolutionized global access to digital dollars, growing from $3.9 billion to over $200 billion in supply within five years by providing a fast, cheap, and borderless alternative to traditional banking, especially in countries with strict financial controls or inflationary economies. 

However, they still carry risks, including dollar debasement, counterparty issues if issuers mismanage reserves, and vulnerabilities from operating on centralized blockchains like Ethereum and Tron. In response, Tether has announced plans to bring its market-leading stablecoin, which holds 75% of the market share and serves 350 million users, to Bitcoin and the Lightning Network, leveraging the world’s most decentralized and secure blockchain for stablecoin transactions.

What Happened This Week:

• The SEC acknowledged Grayscale’s Solana and Litecoin ETF applications and BlackRock’s proposal to allow in-kind creation and redemption for its iShares Bitcoin ETF.

• U.S. House Financial Services Committee Chairman French Hill and Digital Assets Subcommittee Chairman Bryan Steil unveiled a draft bill to establish a regulatory framework for stablecoins in the U.S.

• The Near Foundation has unveiled a $20M AI Agent Fund that will invest in innovative agent tokens.

• ‘Feels like a great time to enter BTC,’ Trump’s second son Eric tweeted.

What to Look Out For:

• Lido has announced that Lido V3 is coming soon.

• Grayscale has filed a 19b-4 shelf registration statement with the NYSE and SEC to convert its Litecoin ($LTC) trust into a spot ETF.

• New Mexico State Representative Anthony Thornton has introduced a strategic BTC reserve bill in the New Mexico Senate that proposes to invest 5% of public funds in Bitcoin.

• BlackRock is reportedly set to list a Bitcoin ETP in Europe. This will be the first time BlackRock has launched a Bitcoin ETP outside of North America.

• Trump signed an executive order directing the U.S. Treasury and Commerce Departments to establish a Sovereign Wealth Fund.

What we enjoyed reading and listening to:

• Tariffs and the Onchain Slaughterhouse — Bitcoin and Market Musings — Link

• Scaling Through Decentralization — Link

• Is Crypto Cooked? It Still Isn’t Over — Link

• JPMorgan: Reasons behind Ethereum’s underperformance — Link

• Has Michael Saylor’s ‘infinite money glitch’ run into a hitch? — Link

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