Record High Spot ETFs Inflows, Historic Liquidation Event & Trump Family Project Buying Altcoins

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This Week’s Top Stories

“The U.S. spot Bitcoin ETFs holdings have exceeded Satoshi Nakamoto’s total holdings.” – Friday, 6 December 2024

• Eric Balchunas, ETF analyst at Bloomberg, tweeted that U.S. spot Bitcoin ETF holdings surpassed Satoshi Nakamoto's total holdings last Friday, reaching approximately 1’104’534 BTC. This milestone makes the U.S. spot Bitcoin ETFs the largest single holder of Bitcoin globally. Remarkably, it took these ETFs less than one year to claim the top spot from Satoshi.
• In August, we published the article “Who Owns All the Bitcoin?”, where we outlined the largest Bitcoin holders, including institutions, private individuals, and nation-states. At the time, the U.S. spot ETFs were already on track to become the top holder. We also discussed the possibility of nation-states beginning to accumulate Bitcoin, particularly in light of Donald Trump’s potential election as U.S. president. You can read the article here.

“Microsoft shareholders vote against bitcoin treasury proposal.” – Tuesday, 10 December 2024

• Microsoft shareholders have voted against a proposal that would have directed the company’s board to consider adding Bitcoin to Microsoft’s balance sheet. As we mentioned in last week’s wrap, the chances of this proposal passing were slim from the start and only 0.55 percent of the shareholders ended up voting “yes” to the proposal. However, the very fact that such a vote took place is a positive sign for the industry, reflecting growing mainstream interest in Bitcoin.
• While we did not get our hopes up for this vote, the market appeared disappointed by Tuesday’s outcome. The rejection added further pressure on Bitcoin and the broader crypto market, contributing to additional downward price action following the news.

“Largest altcoin liquidation since 2021 hits amid crypto market selloffs”

• Beginning late Sunday night into Monday, Bitcoin and the broader crypto market underwent a significant deleveraging event. Bitcoin dropped by over 7 percent, Ether by more than 14 percent, and smaller cap memecoins like WIF and BONK plunged over 30 percent within just 24 hours.
• Monday’s selloff resulted in historic liquidation levels, marking the highest in years. This altcoin wipeout is likely the largest daily long liquidation event since May 2021. A staggering $1.5 billion in long positions were liquidated on Monday alone, followed by an additional $500 million on Tuesday.

A Quick Crypto Overview: This Is Why You Don’t Overleverage

Last Thursday and the start of this week clearly illustrate why you should avoid overleveraging, even in a bull market. Imagine getting liquidated during Monday’s corrective movement. This happened to many crypto traders as the market experienced the largest daily long liquidation event since May 2021, with over $1.5 billion in long positions wiped out.

Even without leveraged positions, this week felt like a rollercoaster. As traders recovered from last Thursday’s wild liquidation hunt on Bitcoin, Monday and Tuesday revealed the true volatility of overheated markets, with some altcoins dropping over 30 or even 50 percent within hours.

While most crypto categories remain down for the week or are trading flat, the tourism sector saw a sharp increase yesterday. This followed a tweet from CZ, the founder of Binance, mentioning his pre-COVID investment in Travala.com and confirming that Binance still holds the investment. AVA, the token associated with Travala.com, surged 300 percent following CZ’s tweet, pushing the entire tourism sector up 200 percent in the last 24 hours.

Chart of the Week: Total Market Cap Excluding Bitcoin

While the total crypto market cap has surpassed its 2021 high and is currently trading 15 percent above it, the total market cap excluding bitcoin remains below that level at the time of writing. The total crypto market without bitcoin has, however, achieved its highest weekly close in history last week but has not yet reached a new all-time high, which was set in November 2021.

To give some perspective, during the bull market of 2020-2021, the total market cap excluding bitcoin surpassed its previous all-time high from 2018 in January 2021. It then surged by 230 percent until the week of 10 May 2021 before correcting 60 percent. As shown in the chart below, we are currently trading just below the previous all-time high from 2021.

What’s Happening On-Chain? Trump Family Project World Liberty Is Buying ETH, LINK And AAVE

You certainly remember the Trump family crypto project, World Liberty, right? We mentioned it a few times in the Weekly Wrap. According to Lookonchain, the project has been buying ETH, LINK, and AAVE. This week, the World Liberty wallet spent 10 million USDC to buy ETH, 2 million USDC to buy LINK, and 1.25 million USDC to buy AAVE. You can check their holdings here. Ethereum, Chainlink, and Aave saw sharp price increases this week, likely attributed to the news of World Liberty buying these tokens. AAVE is up 30 percent this week, LINK is up almost 10 percent, and ETH is still down roughly 3 percent at the time of writing.

We know NFTs are not everyone’s thing, but they are currently experiencing a resurrection—at least some of them. We do not want to pat ourselves on the back too much, but the Pudgy Penguins are up more than 100 percent since we mentioned them here in the Weekly Wrap on 29 November 2024. One Pudgy Penguin is currently worth 26.6 ETH, which is more than $100,000. The price increased almost 70 percent this week alone, as market participants anticipate the PENGU airdrop – a Pudgy Penguin community memecoin set to go live this month.

Digital Asset Fund Flows: Another Record Week To Kick Off December

Digital asset investment products saw the largest weekly inflows in history last week, with a total of $3.85 billion in inflows. Ethereum experienced a record week of net inflows, with $1.2 billion flowing into Ether spot ETFs during the same period.

When looking at the year-to-date flows, Bitcoin investment products are currently sitting at $36.56 billion of total net inflows this year, while Ethereum investment products have brought in $3.3 billion in net new money. This month so far, Ethereum is bringing in roughly 50 percent of what Bitcoin is attracting; this is something to keep an eye on. Ethereum has significant room to catch up with Bitcoin.

This week is set to become another great week for the Bitcoin and Ethereum spot ETFs. Bitcoin products have net inflows of $1.7 billion so far this week, and Ethereum spot ETFs are sitting at $825 million, with today’s numbers yet to come.

Market Sentiment: Coinbase Appstore Rank: 64, Phantom Appstore Rank: >500

The crypto fear and greed index is currently sitting in extreme greed territory (76), down from 83 yesterday but up from 72 last week. Interestingly, the dump and huge liquidation event at the beginning of the week did not have a big effect on the index this time. The current price action for the crypto market did, however, influence the iOS Appstore ranking for the Coinbase and Phantom Wallet applications. Coinbase is currently ranked 64th, and Phantom has lost a lot of ground, sitting outside the top 500 apps in the Appstore.

We have not updated the stock market sentiment in a while, and to be honest, we were also surprised in this regard. The S&P 500 is trading above 6,000, the Nasdaq is trading above 21,600, and guess what? The CNN fear and greed index is in neutral territory (48). Interesting! Also, when looking at the sentiment survey from AAII, it shows that not many market participants are overly bullish. On the contrary, 43 percent are feeling bullish for the next six months, 25 percent neutral, and 31.7 percent bearish.

Other Relevant News

• Sushi DAO proposes a diversification strategy to reduce volatility and enhance liquidity. The plan involves reallocating assets from 100% SUSHI tokens to 70 percent stablecoins, 20 percent blue-chip cryptocurrencies and 10 percent DeFi tokens. – Link
• Iranian Finance Minister said Iran is changing its stance on digital currencies, focusing on regulation rather than imposing restrictions. – Link
• The Czech Republic's parliament has passed a new bill that will allow cryptocurrency companies and their investors to open bank accounts freely without undue restrictions. – Link
• Riot announced the issuance of $500 million worth of convertible bonds, aiming to acquire Bitcoin directly from the market. – Link
• Goldman Sachs CEO David Solomon stated at the Reuters Next conference that the company may consider entering the Bitcoin and Ethereum markets if U.S. regulations change. – Link
• Binance and Circle have announced a strategic partnership. Binance will integrate USDC across its products and services, while also adopting USDC for its corporate treasury operations. – Link
• Annual U.S. inflation rate accelerates to 2.7 percent in November, as expected. – Link

Looking Ahead: Leverage Wipeout, Bitcoin Above $100k & The Crypto Outlook 2025

This week’s leverage wipeout was undoubtedly a tragic event for many market participants. However, it also brought positive effects for the overall market by resetting funding rates and serving as a stark reminder to approach overleveraging with caution. Such liquidation events are not uncommon, having occurred multiple times during previous bull runs, and they will likely remain a feature of the market over the coming months.

Bitcoin is currently trading above $100’000. Funding rates have been reset, crypto market sentiment is not overly bullish, and the Coinbase and Phantom Wallet applications have lost significant ground in the iOS App Store. Historically, the first months of the year are bullish for Bitcoin and crypto, especially in years following the halving and U.S. elections. Are we in for a wild ride?

To explore this question further, we invite you to read our Bitcoin Suisse Crypto Outlook 2025, which was released today. By registering here, you’ll receive a copy straight to your inbox. It’s worth a read – our predictions last year had an accuracy rate of over 80 percent, and we’ve made some bold forecasts for the year ahead. Enjoy!

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

Monday, 16 December 2024

• Switzerland – PPI
• Eurozone – ECB President Lagarde speaks

Wednesday, 18 November 2024

• Eurozone – CPI, Core CPI
• U.S. – FOMC Statement, FOMC Press Conference, Interest Rate Projections, Fed Interest Rate Decision

Thursday, 19 November 2024

• U.S. – GDP, Initial Jobless Claims

Friday, 20 December 2024

• U.S. – PCE Price Index, Core PCE Price Index