Crypto Markets Traded Sideways, ETH ETFs Attracted Inflows, Crypto Infrastructure Moves Forward

• BTC ETFs recorded net outflows of $211M, while ETH ETFs received $48.1M in inflows
• Binance US resumed its dollar services after an 18-month suspension
• FTX began initial distributions to Convenience Class and scheduled the next round

Crypto market took a breather, BTC ETFs saw outflows, ETH ETFs attracted inflows

Crypto markets moved sideways this week, with total market capitalization just below $3.2 trillion and bitcoin dominance holding above 60%. Among major assets, bitcoin fell by 1.3% on the week, while ether slipped by 0.8%. In the US spot ETF market, BTC ETFs saw a net outflow of $211 million over the past 5 trading days, while ETH ETFs recorded a $48.1 million net inflow. One factor weighing on bitcoin sentiment appears to be fading optimism over a potential strategic bitcoin reserve under the Trump administration. On Polymarket, the probability of Trump establishing such a reserve within his first 100 days has fallen to 10%, down sharply from a January peak of 40%. The declining odds indicate growing skepticism about the administration’s near-term commitment to the idea.

Among the OGs, Litecoin (LTC) jumped 10.8% on the week, while Ripple’s XRP gained 10.6%. The rally came as the US Securities and Exchange Commission (SEC) acknowledged spot ETF filings from Nasdaq on behalf of CoinShares to list and trade shares of the CoinShares Litecoin and CoinShares XRP ETFs. The SEC's acknowledgment marks the next step in the approval process. As part of the review, the agency has requested public comments within 21 days of the filings being published in the Federal Register. After this period, the SEC can approve, deny, or extend its review. Bloomberg ETF analysts see Litecoin ETFs as the most likely to move forward, assigning a 90% approval probability. Spot XRP products, which the SEC has already acknowledged from 21Shares, Bitwise, and Grayscale, have a 65% chance of approval.

As Michael Saylor’s Strategy ramped up bitcoin purchases in Q4 2024, institutional investors continued accumulating MSTR stock. Institutional managers with at least $100 million in equity assets have recently filed their fourth-quarter 13F reports, offering a glimpse into major portfolio moves. These filings, due within 45 days of each quarter’s end, reveal stock holdings but exclude short positions. Strategy currently has around 1,400 institutional investors holding $34 billion in MSTR shares, according to Fintel. Notably, institutional options exposure to MSTR has surged past $37 billion — more than doubling from the previous quarter, per 13f.info. On Tuesday, Strategy announced a $2 billion convertible senior notes offering with 0% interest, just after warning of a $1.79 billion impairment loss on its bitcoin holdings.

Robinhood posted a standout performance in Q4 2024, with crypto revenue soaring to $360 million — a nearly 5-fold jump from $61 million in the previous quarter. This marks the platform’s strongest quarter for crypto trading, far surpassing its prior record of $126 million in Q1 2024. Crypto now accounts for almost 40% of Robinhood’s total quarterly revenue, up from around 20% in Q3. While the company did not disclose which tokens drove the surge, Coinbase’s earnings report offers some context. In Q4, bitcoin made up 27% of Coinbase’s trading volume, followed by ether at 10%, USDT at 15%, and other assets comprising 48%, highlighting growing retail interest in alternative cryptocurrencies. Despite Robinhood’s strong performance, Coinbase remains the dominant player, reporting $440 billion in trading volume for the quarter—significantly outpacing Robinhood’s $71 billion.

While prices stagnate, crypto infrastructure moves forward

Binance.US is resuming US dollar deposits and withdrawals for the first time in nearly two years, according to a blog post. The platform began reintroducing zero-fee ACH bank transfers on Wednesday, with access gradually expanding to all eligible users in the coming days. Fiat transactions were halted in June 2023, shortly after the SEC filed a lawsuit against Binance, Binance.US, and co-founder Changpeng Zhao, alleging securities law violations. Binance.US once accounted for about 10% of US dollar trading volume among exchanges, but its market share has dwindled to just 0.1% as of January, according to The Block’s data dashboard.

FTX has begun returning funds to an initial group of customers, with broader distributions set to continue in the coming months. Convenience class claimants (those owed up to $50,000) will start receiving payments within 1 to 3 business days, according to a statement released Tuesday. The next round of distributions is scheduled for April 11, with funds available through BitGo and Kraken. FTX’s bankruptcy plan, approved by a Delaware judge in October 2024, ensures that 98% of creditors will receive at least 118% of their claim value in cash two years after the exchange collapsed.

Hong Kong’s financial regulator has unveiled a new roadmap aimed at strengthening the region’s crypto industry through clear regulations. The Securities and Futures Commission (SFC) outlined 12 initiatives designed to enhance security, foster innovation, and support market growth. The plan focuses on streamlining access to global liquidity, enabling adaptable compliance frameworks, and integrating blockchain efficiencies into traditional finance. Key measures include establishing licensing regimes for over-the-counter (OTC) crypto trading and custodial services. The SFC noted that OTC desks, commonly used by institutions for large trades, currently operate with minimal transparency, increasing the risk of market abuse.

Bullish Group has secured regulatory approval to operate its digital asset trading business in Hong Kong. The Securities and Futures Commission (SFC) granted Bullish HK Markets Limited licenses for Type 1 (dealing in securities) and Type 7 (providing automated trading services), along with approval to operate as a Virtual Asset Trading Platform, enabling the Bullish Exchange to serve eligible customers in the region. Meanwhile, digital asset prime broker LTP announced that its Hong Kong subsidiary, LiquidityTech Limited (LTP HK), has obtained multiple SFC licenses. These include Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts), and Type 9 (asset management), expanding its range of regulated activities.

Macro pulse 

In TradFi markets, oil futures edged up 1.2% on the week, while equities gained 1.5%. The latest FOMC minutes reaffirmed the Federal Reserve’s cautious stance, with all participants agreeing to hold rates steady. The economic outlook remained largely unchanged from December, with officials emphasizing the need for further progress on inflation before considering rate cuts. Most participants acknowledged that policy remains restrictive, while some noted uncertainty warranted a careful approach to future adjustments. A few suggested that the current target rate may be near its neutral level and that pausing or slowing the balance sheet runoff could be considered in light of debt ceiling uncertainties. Elsewhere, the US dollar index declined 0.7%, the 10-year Treasury yield fell 9 bps, and the Gold and Silver index dropped 1.9% week over week.

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_{*Note: Weekly (7 calendar day) performance figures are as of 8am SGT on February 20, 2025} 

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