Market Insights: FEB 2025 | Week4
Wavebridge Research/
Strategic Bitcoin Holdings: States Lead the Way
The US state of Utah is close to finalising a bill to include Bitcoin as a state reserve asset. If finalised, Utah will become the first US state to hold Bitcoin as an official reserve asset. In Georgia, Senate Bill 178 was recently introduced. If passed, the bill would allow the state treasurer to invest up to 5 per cent of state funds in Bitcoin. In the United States, 12 states, including California and North Carolina, have been identified as holding around $330 million worth of strategic stocks.
In 2024, Bitcoin's DeFi total deposited assets increased by more than 2000 per cent, showing new growth potential. The TVL of the BTCFi ecosystem surpassed $6.8 billion. BNY Mellon, one of the largest banks in the US, was revealed to hold a $13 million Bitcoin ETF. Michael Saylor argued that the US government should buy 20% of the total Bitcoin supply. He said that the US could solve its national debt if it held 4-6 million BTC, and stressed that it should ‘hurry up before other countries buy it first’. With transaction fees on the Bitcoin network at historically low levels, the time is ripe to clean up UTXO, he said. By consolidating bitcoin holdings while transaction fees are low, they argue, you can avoid unnecessary expenses if fees spike in the future.
Ethereum Transaction Fees Hit Historic Lows: A Positive Signal for Investors
Ethereum's transaction fees have dropped to historically low levels. This could be a positive sign for investors. According to Santiment, the average transaction fee on Ethereum was 0.00005 ETH, a significant drop from the 0.005 ETH recorded in early 2024. According to Spot on Chain, President Trump's World Liberty Financial recently invested USD125,000 to buy 5,479,000 SEI tokens. This is the fund's first purchase of SEI tokens and indicates that WLFI is continuing to expand its investments in the DeFi market. Story, a blockchain platform that promises to tokenise intellectual property rights, has seen its token price surge nearly fivefold within a week of its mainnet launch. Story is a project co-founded by Radish entrepreneur Seungyoon Lee, who has been described as the ‘Netflix of web design,’ and Jason Zhao, the youngest product manager at Google's AI subsidiary DeepMind. Ethena said it is ‘monitoring the situation’ with respect to the Bybit situation. It emphasised that its stablecoin USDe is fully collateralised and assured investors that they should not be concerned.
SEC Reshapes Approach to Crypto Misconduct Enforcement Amid ETF Reviews
The US Securities and Exchange Commission is reviewing whether to approve an XRP spot ETF. The SEC has until October 2025 to make a final decision, but an approval or denial could be announced as early as April. The main organisations currently applying for approval include Grayscale, 21Shares, and Bitwise. The U.S. Securities and Exchange Commission has accepted Grayscale's application for a solar ETF and is seeking comment on four solar investment products. US senators ask the SEC to clarify its position on limiting protocol staking in crypto ETPs. The U.S. Securities and Exchange Commission is accelerating its approval process by reviewing a large number of cryptocurrency-related ETF applications. In recent regulatory filings on 19 and 20 February, the SEC formally acknowledged a number of proposed rule changes related to crypto ETFs, including staking, options, in-kind redemptions, and altcoin funds. The SEC has downsized and renamed the unit dedicated to cracking down on cryptocurrency-related misconduct. The move reinforces a trend of the SEC backing away from aggressive enforcement against the crypto industry.
Germany’s Central Bank Governor Advocates for Central Bank Digital Currency (CBDC)
The European Central Bank is in full swing to build a long-term payment solution using distributed ledger technology. . It aims to enhance interoperability with the European system's existing financial infrastructure. The launch of Franklin Templeton's EZPZ ETF marks the first ETF in the US market that includes both Bitcoin and Ethereum. The Brazilian Securities and Exchange Commission approved the launch of the world's first XRP ETF, the Hashdex Nasdaq XRP Index Fund. The European Union's cryptocurrency regulation bill, Mika, authorised 10 companies, including Tether, to issue stablecoins. The Hong Kong Securities and Futures Commission announced 12 initiatives to promote security, innovation, and growth in the cryptocurrency market. The head of Germany's central bank supports the introduction of a central bank digital currency, calling it essential to protect Europe's economic sovereignty. The governor of the Czech central bank argued that bitcoin is different from other cryptocurrencies and that the central bank should study its technology. The first payout to creditors has been made to creditors nearly two years and three months after the FTX collapse.
Bybit Hacked: $1.46 Billion Stolen in Sophisticated Cyberattack
Bybit, one of the world's largest cryptocurrency exchanges, was hacked and $1.46bn worth of coins stolen. The North Korean hacking organisation Lazarus has been blamed for the hack. Bybit's CEO admitted that ‘hackers compromised one of Bybit's offline Ethereum wallets’. Bybit had approximately $16.2 billion in assets before the hack, and the hack wiped out about 9% of its total assets. Bybit CEO Ben Zhou said, ‘Following the hack, we received the largest withdrawal requests we've ever experienced, totalling over 350,000 withdrawal requests to date, with only about 2,100 remaining. 99.994% of all withdrawals have been completed.’ ‘The Bybit hack is similar to the attacks on Indian cryptocurrency exchange WazirX and lending protocol Radiant Capital last year, both of which were attributed to North Korea,’ said blockchain security firm Fireblocks. Blockchain data tracking platform Arkham Intelligence also revealed that around $1.4 billion of Bybit's funds had been compromised and that ‘the funds are being moved to new addresses and sold off.’ The Bybit hack triggered a massive $566 million liquidation in the cryptocurrency market. Ethereum core developer Tim Bako said the possibility of a network rollback, which was raised in the wake of the Bybit hack, was ‘technically impossible’. On the other hand, BitMEX co-founder Arthur Hayes and JAN3 CEO Samson Mow said that a rollback is necessary to ‘stop the influx of illegal funds from the North Korean hacker organisation Lazarus’.