The Breakdown First Five - Friday, January 19, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Tether’s Big Buy

Tether added 8,888 Bitcoin to their balance sheet in Q4. At a price of $380M that makes their cost basis $42,690. Nice. Since deciding to plow 15% of profits into Bitcoin in September 2022, Tether have accumulated around $2.8B in Bitcoin. Peanuts compared to their overall reserve, but that’s still enough to make them the 11th largest Bitcoin holder. About a third of a Microstrategy. 

4. Miners Dumping

Bitcoin miners have been selling down hard into the ETF launch. Wednesday saw the largest single day of miner selling in more than a year, with around $450M worth of Bitcoin dumped. Reserves are now at their lowest level since July 2021, though still worth a massive $78B. 

Cryptoquant’s miner position index has been elevated since Monday, but perhaps the bulk of the selling is behind us now.  

3. ETH ETF Delayed

The SEC have delayed their decision on the Fidelity spot Ethereum ETF. A decision on Blackrock’s product is required next week, which will likely also be a delay. This should come as no surprise after Gensler said ETF approvals were “cabined to one non-security commodity, Bitcoin”. All eyes are now on May 23rd as the final deadline for the VanEck product. Let’s see if Gensler will deny and start preparing for court.

2. ETFs Outperform, Price Underperforms

With a week of trading in the books, Bitcoin ETFs have been a smash hit in every way other than pumping the price. Bitcoin hit a 4.5% drawdown yesterday, compounding to a 12% loss since the ETFs began trading. Both Blackrock and Fidelity have crossed the $1B mark, some of the fastest in history. GBTC selling has been heavy, but $1B in net inflows were still recorded. Volume has been absolutely ballistic, rivaling anything seen before. 

1. Trump Won’t Allow CBDCs

At a campaign event in New Hampshire, Trump said he would “never allow” the creation of a CBDC. The event appeared to be a test run of the new policy after Trump was introduced to the topic backstage by new booster Vivek Ramaswamy. Trump said CBDCs would be a “dangerous threat to freedom” and give the government “absolute control over your money”. CBDCs are now on the front lines of the culture war. 

Thanks for reading -NLW