🐳 Weekly Edition: Bitcoin Selloff Accelerates as ETFs Total $860M in Outflows

Bitcoin slid sharply today falling to lows near $94k for the first time since May as BTC ETF outflows totaling $869M mark yesterday as the second-highest day for outflows since the ETFs launched. This of course comes after over half a billion in net inflows on Tuesday so it’s certainly not the end of the world, but it’s not something we want to see become a trend. The “good” news is that the red day is not specific to crypto, but rather likely a symptom of lackluster performance in the stock market as the longest shutdown in US government history comes to a close. Anecdotally, the last 48 hours have brought more texts from non-crypto friends about whether BTC is finally a good buy here… I’m not sure if that’s a bottom signal or the opposite, but I do think it’s something to take note of.

Speaking of normies, while crypto-natives are struggling with falling coin prices, TradFi continues to bring more assets onchain. JPMorgan has now rolled out “JPM Coin” on Coinbase’s Base network, functioning as a deposit token for institutional customers to enable them to make near-instantaneous transfers 24/7. This may sound somewhat mundane, but in light of the fact JPMorgan already had their own fully-functioning private blockchain Kinexys this is an interesting move. Maybe the crypto people saying public decentralized blockchains were the end game had a point?

It’s always fun writing these updates on deeply red days in the market, but it wouldn’t be transparent if we only did them when times are good. The Beluga balance is now back to our starting point of $100k which isn’t super surprising given our largest position (ETH) has also returned to our entry. Despite the broader altcoin market bleeding heavily this year, we actually managed to pick two (AAVE, CRV) that have performed quite well. Looking deeper at why they’ve held up, the market appears to agree with our thesis of DeFi protocols that generate significant revenue regardless of the prices of things.

Both Aave and Curve have been major beneficiaries of the Trump admin’s crypto (and more specifically, stablecoin) push, albeit for different reasons of course. Aave in a vacuum is arguably the most “blue chip” DeFi protocol we have, but in combination with Trump-backed World Liberty Finance using them as a backend it’s easy to see why traders are backing it. Curve is similarly battle-tested over the years, but the thesis there revolves solely around the infrastructure it provides as the cheapest place to swap stablecoins. If you believe companies will keep launching their own stables, you must also believe there has to be infrastructure to facilitate swaps between them.

The rumors of Michael Saylor selling have been greatly exaggerated

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