Bitcoin Flirts With $52K on Strong Spot ETF Inflows; Crypto Hacks Are on the Rise

Could the spot. Bitcoin ETF be the most successful ETF in history. It's been the most successful launch, but it's going to be very hard to out compete the S and P and NASDAQ indexes. So I unfortunately have to go by no good afternoon and welcome to first mover on coin desk on this show, you get all of your top news headlines, deep dives into specific topics and interviews with industry heavy hitters. Let's get right into it. We're going to dive into some of the biggest hacks so far this year. According to Immune, more than 100 and $26 million was lost due to hacks in the month of January alone. This is a six times increase from January 2023 and almost a three time increase since December of last year in their crypto losses in January report. Immune said that while D FI was the main target for exploits, C I didn't see a single major attack coming in on top with the largest hack so far this year is Orbit chain. The South Korean chain lost $81 million after hackers exploited the platform's cross chain bridge. The project confirmed the hack in a post on X saying that a hacker funded a wallet using tornado cash before attacking Orbit Chain's Ethereum vault proceeds of the hack were then sent to numerous Ethereum wallets. At the time Orbit Chain said the funds were quote unmoved. And Gamey confirmed late last month that its Gmee token contracts on Polygon suffered an exploit that saw 600 million tokens stolen. The exploiter then converted those tokens into E and Matic in a post on X. The project said quote, the exploit affected proprietary team token reserves only and no community owned assets have been exploited. Gamy does not custody or manage any community owned assets, end quote and coins paid a crypto payment service provider was hacked and roughly $7.5 million worth of crypto was stolen. This was a second security breach it experienced in six months according to web three security firm Cyber. This spot, Bitcoin ETF update is presented by Grayscale, the world's largest crypto asset manager. Bitcoin passed $50,000 this week off the back of strong spot, Bitcoin ETF inflows joining us now to weigh in on the spot. ETF excitement is K 33 research, senior analyst Vetle Lue. Thank you for being on. It's such an exciting time in the market right now. It really, really is. Talk to me about what you're watching when it comes to ETF S. Yeah. So I'm, I'm paying close attention to the ETF uh flows which have just been immense. And Gargan, I would say in the past week, um 53,000 Bitcoins have been gobbled up by the spot ETF S and etps globally. Uh In the past week, it's been a certain rapid regime change in terms of flow flows, which is obviously very helpful for the Bitcoin price and it's just been just fuming with uh flows over the past few days. So it's, it's indeed very exciting times. What are some of the factors that are driving these inflows? Yeah, so it's um it's difficult to pinpoint exactly what's the cause behind these flows because there aren't any like rational catalyst behind it. It was quiet for for a couple of weeks by the end of January and also early February. But if you want to have a rational perspective on it, uh you could look at uh the like building up of uh uh event based sellers before the ETF approval in January 10, evident by CMES growing open interest back then. And also all the event uh or tactical G BT C arbitrage trades occurring in the window before the ETF approval. All of these participants sold quite heavily uh in uh early to mid January leading prices to fall and also outflows to be quite negative. That regime was not uh surprising, many had anticipated that this would happen in the weeks following the ETF flows ETF launch. So uh it could be that participants on the defense waited for this, these conditions and this selling pressure to sort of settle a bit more and normalize. Now, G BT C flows have indeed fallen quite dramatically over the past few weeks. So it could be just a factor of market participants waiting for Bitcoin to stabilize and G BT C outflows to stabilize before entering. And uh I think that's the key reason why we have seen this growth over the past week and then also momentum builds upon momentum. So once some flows start kicking in and prices start to kick higher, other participants wants to enter as well, leading flows to remain uh exorbitant. Some folks I've spoken to over the past few weeks have said we're still waiting for advisor platforms to list these products and once that happens, we're going to see even more inflows. What's your perspective there? Yeah, I think that's uh nailed on correct. Uh It's, it's going to happen in waves this. So the current cycle of massive inflows might settle a bit. Now in the next coming weeks, uh we are seeing quite early signals of uh flows uh uh trending lower uh yesterday compared to the day before it's early to infer what that would mean for the coming week or coming weeks or so. But what we do know clearly is that multiple brokerage platforms do not offer uh Bitcoin ETF S at the moment reas are not ready at the moment due diligence. Processes needs to be run. You need to assess the liquidity profile of these ETF S and also have the operational flows ready. And this could take months. And once this happens, I'm sure we will find ourselves in another wave of uh very positive flows for these speed. 20 fs. Now K 33 research says that there's been an explosion of trading activity on derivatives exchanges like CME group uh unpack this for me. Yeah. So um immediately after the ETF launch, uh we saw that CMU was reducing exposure quite dramatically, but this has completely flipped over the past few weeks. Now, CME participants are entering the market again. Open interest is very near to all time highs and it's been a very dramatic growth over the past few weeks. Alongside uh this growth, we have seen uh a relatively large uh uh growth in the future spaces, the annual annualized future space, it's pushed towards 20% indicative of CM neutron uh traders like the the traders that we look upon us, the institutional more informed side of the market entering crypto again, entering Bitcoin again and entering long positions. So that's been very productive for the market. We are also uh seeing quite substantial growth in activity offshore but uh in the offshore derivatives market, the sentiment seems a bit more balanced. You still have funding rates trailing in neutral terrain on Binance, indicative of uh quite an even demand to add long and short exposure on the Binance perps, which is quite a healthy signal for a market actually, because once those funding rates starts to pick up higher, that's when you want to be cautious and avoid adding leverage to yourself. Now, talk to me about the sustainability. Do you expect this, these trends to continue uh throughout the rest of 2024? And what events are you looking forward to? I think the ETF flows will generally remain uh constructive throughout the entire year. We will probably not see uh periods such as this one lasting for more than 1 to 2 to 3 weeks. Uh It's been quite incredible. Um So I expect flows to start moderating a bit from here. Uh But ETF flows and like the enhanced access to Bitcoin uh through these wrappers will be a very important force in the market. Similarly, uh I also view the Bitcoin halving as an important event. Uh it's uh known beforehand. So you can make the argument argument based on an efficient market hypothesis that the hal does not, should not have an impact on the BT C price, but on the o on the other end of uh the halving, you have the miners who constantly have to sell Bitcoin each and every day to fund their operations. So I would say that uh halving as it incrementally reduces the uh annualized Bitcoin issue by 164,000. Bitcoin is due to have a solid and positive footprint on the Bitcoin price. And on top of that, uh, macro conditions are starting to look a bit more favorable. We expect, uh, interest rates to decline. And also, um, we are in a very polarized period in 2024 with a lot of political elections, uh, setting the stage for turbulence, uh, and, uh, uh, potential, um, disagreements between various fractions within countries which could be very beneficial for Bitcoin as Bitcoin represent this neutral uh asset that doesn't uh isn't uh related to any trust in any state or c central gov governor. So all in all, I think there are a plethora of uh positive factors for Bitcoin ahead. Uh but uh it, it will be very wise to pay close attention in the short term to any developments within leverage because uh right now the rally is starting to get wings and uh you should be considering being cautious soon if this does uh uh accelerate for, you mentioned some uh positive factors for Bitcoin there, give me a price prediction. Where do you see the price of Bitcoin going uh for the rest of 2024? So I'll be, I'll be refraining from using any dollar uh uh predictions, but I'm feeling quite confident that uh Bitcoin is due to uh surpass its all time high. We were quite adamant in our year in review and 2024 outlook that we expected an all time high to be reached earlier than in the past cycles. So we typically would see it in November based on former price patterns. I think we will see it earlier this uh this year and this cycle maybe even ahead of the hauling. So all time high at least would be my protection uh prediction and also uh generally a very positive year for Bitcoin. Oh Come on, no price prediction. You're not the only one on this show who has refused to give me a number. But I appreciate you still humoring me and, and saying that you think that we will reach all time highs um a little bit earlier than we have in the past. We're gonna have to wrap it there. Vetle, thank you so much for joining first mover. Thank you for having me. That was K 33 research senior analyst Vetle Lunde. It's time now to take a look at the chart of the day. The chart of the day is presented by crypto.com, the leading crypto platform trusted by over 80 million users worldwide. Liquid Staking platform. Eigen Layer's cap lift prompted $4.3 billion of fresh inflows. Recently, the increase in inflows comes after Eigen Leer removed its staking cap on February 5th. A decision designed to invite organic demand according to a blog post, the window for liquid staking was closed on February 10th. Since then, the further $100 million rise in total value locked can be attributed to increasing asset prices. The rise in Eigen layer's total value locked is mirrored in a wider surge across the DFI sector with a total amount of capital locked on defi protocols standing at over $71 billion. The highest point since June 2022. That's a wrap for first mover. Thank you so much for watching and thank you to our guests today. As a note, we sometimes edit interviews on this show for length and clarity. If you want to get more news headlines, head on over to coin desk.com. Thank you again so much for watching. I'm Jensen Asi. This is first mover. We'll see you next time.