Bitcoin ETF Outflows, Silk Road BTC Sale, and Terraform Labs Bankruptcy: Weekly Crypto Recap

Bitcoin ETF Outflows, Silk Road BTC Sale, and Terraform Labs Bankruptcy: Weekly Crypto Recap

In the dynamic world of cryptocurrencies, the past week brought forth significant developments, including Bitcoin’s recovery, notable outflows from spot Bitcoin exchange-traded funds (ETFs), the U.S. government’s plan to sell Silk Road-confiscated BTC, and the bankruptcy filing of Terraform Labs.

Spot Bitcoin ETF Outflows:

Spot Bitcoin ETFs experienced substantial outflows, primarily attributed to investors exiting the Grayscale Bitcoin Trust (GBTC) due to high fees. On January 24, the market saw its largest intraday outflow since inception, with a cumulative negative netflow of $159 million. Despite inflows in other ETF products, the massive $429 million outflow from GBTC overshadowed positive trends. On January 25, GBTC recorded $394 million outflows, contributing to sustained selling pressure on Bitcoin.

Alameda Withdraws Grayscale Case, FTT Surges:

Alameda Research, affiliated with FTX, withdrew its case against Grayscale, leading to reports of FTX selling 22 million GBTC shares. FTX Token (FTT) surged 10% in response. The withdrawal hinted at shifting dynamics in the crypto space, impacting major players.

Asia Enters Bitcoin ETF Discussion:

Asia joined the Bitcoin ETF conversation, with reports suggesting that Hong Kong might welcome spot BTC ETFs in mid-2024. Asset managers like Venture Smart Financial Holdings and Value Partners Group in Asia expressed interest in launching such products.

Bitwise’s Transparent Move, SEC Delays Ethereum ETFs:

Bitwise, managing spot Bitcoin ETFs, set a precedent by sharing the physical Bitcoin address of its ETF product for transparency. Meanwhile, the U.S. SEC delayed decisions on two spot Ethereum products by BlackRock and Grayscale, with decisions now expected in March and May, respectively.

Bitcoin’s Recovery Amid ETF Outflows:

Despite outflows from spot Bitcoin ETFs, Bitcoin staged a recovery, bouncing back from a yearly low of $38,555 to reclaim and hold above $42,000 on January 27. The broader market followed suit with a similar upsurge.

U.S. Government Plans Silk Road BTC Sale: Concerns about selloffs resurfaced as the U.S. government announced its intent to sell $131 million worth of BTC confiscated from the Silk Road. This move added a layer of uncertainty to Bitcoin’s recent recovery.

Terraform Labs Files for Bankruptcy:

Terraform Labs, the firm behind the Terra ecosystem, filed for Chapter 11 bankruptcy after facing legal challenges. This development followed Crypto.com’s decision to delist Terra (LUNA) and the ongoing struggles of the Terra project.

The week’s events highlight the intricate interplay of market dynamics, regulatory decisions, and external factors shaping the ever-evolving cryptocurrency landscape.

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