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January 19, 2024

📈Weekly Recap: Spot Bitcoin ETFs Outperform

The Defiant

Weekly Recap

Happy weekend Defiers!

The impressive performance of the freshly launched cohort of spot Bitcoin ETFs dominated headlines this week.

Spot Bitcoin ETFs hosted a $1.3B inflow during their first four days of trading, bringing the value of assets under management (AUM) to $27.7B. The sector ranks as the second-largest commodity ETF asset class, beating out silver’s $11.3B and lagging behind gold with $93.8B. Trading volumes have also exceeded expectations, with the first four days hosting roughly $12B worth of spot Bitcoin ETF share trades.

The Bitcoin ETFs’ launch also had a significant impact on the broader crypto markets. Despite the long-awaited approval of the ETFs, their launch triggered a sell-on-the-news event. The price of BTC is down nearly 15% from its local top on Jan. 11, with Ether and leading altcoins holding up far stronger than Bitcoin.

Miners offloaded $4.7B worth of BTC in the run-up to and aftermath of the SEC approving the funds last week. Institutional crypto products also hosted a massive $17.5B worth of trades last week, driving $1.2B worth of inflows.

It was also a big week for Ethereum and its broader ecosystem. Analysts are tipping that spot Ether ETFs may be approved this year, driving down the discount of Grayscale’s Ethereum Trust.

The network’s upcoming Dencun upgrade is now live on the Goerli testnet. While the fork initially resulted in a network split due to an error with the Prysm client, the upgrade has since been finalized and developers say all issues encountered amid the fork have been patched.

A spike in on-chain activity pushed Ethereum’s throughput to new heights, with 22.7 transactions per second or 2M transactions in 24 hours getting executed on Jan. 14. The waitlist for validators leaving the network also cleared after spiking to all-time highs last week as Celsius moved to unstake its sizable Ether holdings.

Ethereum’s nascent liquid restaking sector is booming amid the rise of EigenLayer. The top three liquid restaking protocols now boast a combined TVL of more than $450M. In other staking news, the popular MetaMask wallet launched a non-custodial staking service, allowing users to run their own validator node.

DYdX, the leading decentralized perpetuals exchange, overtook Uniswap to rank as the top DEX by daily trade volume with $800M. The milestone follows the launch of dYdX v4 as a Cosmos appchain in November.

The first hearing in the legal battle between the SEC and Coinbase appeared to yield positive results, with many analysts tipping that the court will side with Coinbase and the broader digital asset sector against the outspoken securities regulator.

Moody’s, the global investment risk assessment firm, published a report celebrating the efficiency benefits associated with tokenization. Moody’s noted that the tokenized fund sector ballooned from $100M to $800M in 2023.

And in this week’s podcast, Cami Russo spoke with Matt Hougan, the CIO of Bitwise, to learn more about what the launch of spot Bitcoin ETFs means for the landscape of web3 and traditional finance.

Enjoy!

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Podcast & Interviews

Mastering the Crypto Bull Market with Fiskantes

Joined by Ivan of LobsterDAO, we spoke with Fiskantes, the popular pseudonymous trader and founder of Zee Prime Capital, to discuss the dominant narratives driving the web3 markets.

The discussion explores expectations for the post-Bitcoin ETF landscape, the flourishing Layer 1 scene, Fiskantes' bullish outlook for Polkadot, and his broad predictions for the web3 markets in 2024.


Podcast & Interviews

The Real Impact of Bitcoin ETFs on Markets: Bitwise CIO Matt Hougan

Cami Russo was joined by Matt Hougan, the CIO of Bitwise, a crypto index fund manager and Bitcoin ETF issuer. Hougan is a renowned figure in the financial sector, known for his expertise in cryptocurrency and exchange-traded funds (ETFs).

The discussion explores Matt's initial reaction to the BTC ETF launch, the expected inflows for 2024, and the often underestimated impacts of these developments. He also touches on the evolution of Bitcoin ETFs, the likelihood of Ethereum ETFs receiving regulatory approval, and the growing understanding of Ethereum in traditional finance. Finally, we touch on the centralization risks of Bitcoin, the future of Bitcoin ETFs, and his Bitcoin price forecast.


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