ARP's Crypto Digest

ARP’s Crypto Digest

General Digital Asset Market View:

Over the past week, Bitcoin ETFs have experienced notable fluctuations, with significant movements primarily centered around Grayscale’s $GBTC and Fidelity’s $FBTC. $GBTC consistently saw outflows, selling $32M early in the week and continuing with -$27M and -$29M on subsequent days, reflecting a steady pattern of weighing down their holdings over the recent period. cc

In contrast, Fidelity’s $FBTC exhibited strong inflows, peaking at $117M, highlighting a strategic accumulation amidst a 20% BTC drawdown. Bitwise’s $BITB also contributed with a $30M inflow, indicating investor confidence despite BTC’s drawdown. Blackrock’s $IBIT and other ETF’s remained neutral with no major flows.

More Crypto:

The announcement that Mt. Gox in kind creditor repayment would begin in July has recently weighed on the market (alongside the German Government beginning to move their own seized bitcoin), as the looming overhang has spooked investors.

Mt. Gox, once handling over 70% of all Bitcoin transactions, holds approximately 142,000 BTC for creditor repayment. However, the actual distribution is expected to be around 75,000 BTC due to various factors, including some creditors already receiving partial cash repayments and others opting for early lump-sum settlements. 

The impact on Bitcoin might be softened for several reasons:

• Staggered Distribution: Prevents a large, single-day sell-off.

• Substantial Daily Trading Volume: Bitcoin averages about 32,000 BTC per day and can handle spikes up to 150,000 BTC, allowing it to absorb these inflows more effectively.

• Creditor Behavior: Many creditors are likely to hold onto their Bitcoin or sell only small portions due to:
  - Tax implications.
  - The significant increase in Bitcoin’s value since the Mt. Gox collapse.

• Pre-sold Claims: Those seeking quick payouts have likely already sold their claims, further reducing potential market pressure.

Summary graphic of Mt. Gox distributions:

What Happened This Week:

• Mt. Gox begins repayments in Bitcoin and Bitcoin Cash.

• Pendle’s TVL has fallen 40% in the past week. The large-scale withdrawals reflect the user’s waning interest in restaking airdrops.

• Solana reached a new ATH in monthly economic value (fees + MEV) at $91.3M or $1.1B annualized.

• Frax DAO will offer distribute 90% of Fraxtal’s revenues to users, and the remaining 10% towards veFXS and insurance.

• TAO validators have been hacked and the chain has been halted to investigate.

What to Look Out For:

• Approval of spot ETH ETF S-1 forms might delay until after July 8, from previous estimate of July 2 due to holidays: Bloomberg ETF analyst.

• Jupiter has announced key events over the next two months. There will be a 30% $JUP supply reduction vote in late July.

• Chainlink has announced a partnership with Fidelity and Sygnum.

• According to Forbes, Trump sparks talks of Bitcoin as a strategic reserve asset.

• zkSync has launched an ever-expanding network of ZK “Elastic Chain” bundles.

What we enjoyed reading and listening to:

• Navigating the Global Crypto Landscape with PwC: 2024 Outlook  — Link

• How to Figure Out Whether a Crypto Token Is Worth Its Trading Price — Link

• Crypto’s Future of Policy, Politics, and the Fight for a Pro-Crypto Government — Link

• Fed’s Powell says US on ‘disinflationary path,’ but more data needed before rate cuts — Link

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