Abu Dhabi Sovereign Wealth Fund Bought BTC Spot ETF, Milei Memecoin Scandal & FTX Repayments

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This Week’s Top Stories

“Abu Dhabi Sovereign Wealth Fund Holds $437 Million in BlackRock’s BTC Spot ETF.” – This week

• Over the last couple of weeks, large companies and investment funds have published their 13F filings for the last quarter of 2024, revealing some remarkable changes and developments.
• The Abu Dhabi sovereign wealth fund, Mubadala Investment Co., held $437 million of BlackRock’s iShares Bitcoin Trust (IBIT) in Q4 2024. Their position in IBIT accounts for more than 2% of their total portfolio, making it one of their largest holdings.
• The Wisconsin State Pension Fund held $321 million in Bitcoin spot ETFs, an increase to 6 million shares, up from 2.8 million shares in September last year.
• Paul Tudor Jones, who has expressed interest in Bitcoin for several years, also reported increased Bitcoin positions for his firm, Tudor Investment Corporation. The firm raised its IBIT holdings to 8 million shares, worth $427 million, making it one of its largest positions.
• The quarterly 13F filings with the SEC provide a valuable opportunity to track the positions of large investment companies, hedge funds, pension funds, and other institutional investors. Since Bitcoin and Ethereum spot ETFs are still relatively new products, it is encouraging to see that many positions have increased over the last quarter.

“FTX Started to Pay Out Small Claims to Creditors This Week.” – Tuesday, 18 February 2025

• FTX creditor champion Sunil posted on X that FTX began paying small claims to creditors on Tuesday, specifically for accounts with claims of less than $50’000.
• The total amount in this round of repayments is $1.2 billion, with approximately $800 million paid so far, covering about 162’000 accounts – 35 percent of the estimated 460’000 eligible claim accounts.
• An interesting fact: 50 percent of the money is paid to the original holders, while the other 50 percent goes to claim buyers.
• He additionally stated that the record date for the next distribution is set for April 11, 2025, with payments expected to begin on May 30, 2025. This second distribution phase will cover claims over $50’000, as well as approved claims under $50’000 that were not paid in the first distribution.

A Quick Crypto Overview: Crypto In Recovery Mode Since Tuesday

While the crypto market initially traded to the downside at the beginning of the week – and the U.S. stock market being closed on Monday – Tuesday turned out to be the turning point for both markets. After the FOMC minutes were released on Tuesday evening CET, the markets started trending upward, with Bitcoin currently up more than 5 percent since then.

The S&P 500 reached a new all-time high on Wednesday, but Bitcoin is still trending higher relative to the U.S. stock index, as the chart below shows.

The chart below shows some of the major cryptocurrencies over the course of February. While Bitcoin and most major altcoins are still down for the month, it’s interesting to see that Ethereum is outperforming Solana so far.

SOL/USD, shown in red, indicates that Solana took quite a hit over the weekend, likely due to the LIBRA saga – but more on that in a bit. The upcoming Solana token unlock from the FTX bankruptcy auction is likely another factor contributing to Solana’s current underperformance. The unlock is scheduled for March 1, when SOL worth $2 billion will be released.

Chart of the Week: Bitcoin and Gold – The Dream Team?

It is always good to look back and reminisce about where we come from and what Bitcoin has already accomplished over the past two years. The chart below shows the price action of Bitcoin and Gold since the end of 2022, and it is astonishing. Both assets have been trending upward for more than two years, with both assets taking off in October 2023 – Gold leading the way.

In February 2024, Bitcoin took the lead, likely due to the launch of spot ETFs. From spring 2024 until the end of summer, Gold and Bitcoin both traded sideways before Gold began trending upward again in August, leading the way, with Bitcoin following only in November. Gold has recently hit new all-time highs, and it will be interesting to see how Bitcoin trades in the coming weeks. Will it follow Gold or forge its own path?

What’s Happening On-Chain? Another Memecoin Scandal & New Shiny Projects

Argentina's President Javier Milei found himself at the center of controversy after posting about the memecoin $LIBRA on X last Friday, only to delete the post and deny any connection to the project.

Shortly after his post, $LIBRA surged to a $4.5 billion market cap before crashing, as insiders removed roughly $90 million in USDC and SOL from liquidity pools. Eighty-two percent of LIBRA tokens were held in a single cluster. Instead of selling the tokens on the market, the developers behind LIBRA were adding one-sided liquidity pools on Meteora with only LIBRA while simultaneously removing USDC and SOL.

Reports suggest the team behind LIBRA cashed out $107 million. A couple of hours after the rug pull, Milei posted on X that he had no personal relationship with the project and that he did not know anything about it at the time he published the first post.

The scandal deepened when YouTuber Coffeezilla interviewed Hayden Davis, one of LIBRA’s creators, who admitted his direct connection to Milei and shed light on his broader involvement in the memecoin space, including his role in the MELANIA token.

In response, the Argentine Presidential Office requested an anti-corruption investigation to determine if Milei or any officials engaged in misconduct. Meanwhile, lawyers have filed fraud charges against the president, accusing him of promoting LIBRA. This saga is far from over.

The situation has sparked a wider debate on the risks of memecoins and the growing trend of crypto scams, particularly on the Solana blockchain.

Recent developments in the memecoin space, particularly the most recent LIBRA scandal, have sparked new discussions on what this space is all about and whether it is all just a giant industry of scams – without any real value and only bad actors. Of course, we all know that this is not the case. Yes, there are bad actors, and there have always been bad actors. Thinking back on the history of our space – with Mt. Gox, many of the ICOs that turned out to be cash grabs, FTX, Terra, and much more – this is nothing new.

Over the past couple of months, it has been more about memecoins, and with the involvement of nation-state presidents, it might have reached a new level. However, at its core, this pattern is nothing new. Young and unregulated industries give room to such behavior, and that is normal. It was, and is, the same with the internet and many other sectors.

On a more positive note, this week, the focus also shifted more towards new projects such as Berachain or Story Protocol. Both projects recently launched and have experienced positive price action and some attention in the space over the past week.

Digital Asset Fund Flows: From Private Keys To Bitcoin ETFs

After a streak of five weeks with net inflows, during the last week, digital asset investment products saw net outflows totaling $415 million last week. Bitcoin products saw net outflows of $430 million, while Ethereum experienced $7.2 million in outflows, and Solana and XRP saw net inflows of roughly $9 million.

It is becoming clearer by the day that a significant portion of the inflows into Bitcoin spot ETFs is likely not net new money for Bitcoin but instead coming from previous Bitcoin holders switching from the chain to spot ETF products. Plan B, a public figure on X, recently mentioned that he transferred his BTC into a spot ETF purely for the sake of convenience, eliminating the need to worry about private keys. He sees this as a logical step in Bitcoin adoption.

In other news, CZ responded to rumors regarding a potential sale of Binance, mentioning that there has been great interest in Binance for many years but that it is not for sale. However, over time, Binance might allow some investments in the single-digit percentage range.

VanEck’s Head of Digital Asset Research, Matthew Sigel – who we interviewed for last year’s Crypto Outlook – and his team have analyzed the twenty U.S. states promoting bills related to Bitcoin reserves. While much attention is focused on the potential for a strategic Bitcoin reserve at the federal level, these states are taking matters into their own hands by pushing for such initiatives on a state level. Sigel and his team estimate that, if all bills are passed, these efforts could drive $23 billion into the Bitcoin market. While this is a significant sum, it is roughly the same amount that Michael Saylor and his company have purchased over the last four months of 2024 – putting it into perspective.

Market Sentiment: Stocks Neutral, Crypto Greedy?

While the sentiment in the world of altcoins really took another hit at the beginning of the week – likely due to the Milei saga surrounding LIBRA and the suffering of Solana during the couple of days after the scandal – the sentiment has since recovered a little bit. The crypto markets are in Neutral to Greedy territory. The OG crypto fear and greed index is sitting in Greed (55), while the CoinMarketCap index is still in neutral levels (42). The CNN fear and greed index for the stock market is in Neutral (45), which is a healthy sign considering the new S&P 500 all-time high this week. The AAII members remain rather bearish; however, the number of members taking a more neutral stance has increased to 30 percent, up from 24 percent last week. This development suggests that the U.S. stock market might have some room left to the upside, at least from a sentiment perspective.

Other Relevant News

• Tether Investments announced the acquisition of a strategic minority stake in Juventus Football Club. – Link
• State Street and Citi both plan to enter the cryptocurrency custody business. State Street currently has $46.6 trillion in custody assets, while Citi has $25 trillion in custody assets. – Link
• Binance US has resumed USD services on February 19, 2025. Customers will soon be able to deposit and withdraw USD using bank transfers (ACH), buy and sell cryptocurrencies with USD. – Link
• SBF recently expressed support for the Republican Party and criticized the Biden administration. His parents are seeking a pardon from Trump. – Link
• Strategy announced plans to privately offer $2 billion aggregate principal amount of 0 percent convertible senior notes due March 1, 2030. – Link
• Hashdex has received approval from the Brazilian Securities and Exchange Commission to launch the world's first XRP spot ETF in Brazil. – Link

Looking Ahead: The S&P 500 And Gold at ATHs, Will Crypto Catch Up?

The S&P 500 did indeed reach a new all-time high this week, as we expected. Yesterday, Gold also hit a new record high. Bitcoin and the crypto market are lagging – will they catch up?

The latest developments in the world of memecoins have discouraged many market participants, who have likely now given up on their speculative memecoin holdings. Bitcoin, on the other hand, is still trading near record highs, currently just shy of $99’000 at the time of writing.

With the FOMC minutes published and the next meeting set for March 19, the market seems to have some room to develop over the coming weeks. With the S&P 500 at record highs and many U.S. stock market participants still neutral to bearish in sentiment, the question remains: How much room to the upside is left? After reaching a fresh all-time high at the end of January, the S&P 500 traded sideways until breaking to a new high this week.

When looking at Bitcoin dominance, there are still no clear signs of a trend reversal, with dominance currently trading around the December high of 61 percent. However, the ETH/BTC chart shows early signs of a potential bottoming formation – at least in the short to mid-term – which could set the stage for some altcoin movements.

A strong Bitcoin dominance is not necessarily a bad sign for the market – some would even argue that it is a healthy indicator. It is also a trend that makes sense, given that Bitcoin still has a clear narrative compared to most of the altcoin market. The question remains: Will the memecoin narrative return, or will something else take over in the coming weeks?

Below, you can find some of the key data releases and events to watch out for next week.

Monday, 24 February 2025

• Switzerland – Employment Level
• Eurozone – Inflation figures

Thursday, 27 February 2025

• Switzerland – GDP
• USA – Initial Jobless Claims, Continuing Jobless Claims
• USA – GDP
• USA – PCE Prices, Core PCE Prices
• Japan – Tokyo Inflation figures

Friday, 28 February 2025

• USA – PCE Price Index, Core PCE Price Index
• Canada – GDP