Bitcoin ETF Outflows Surge as BTC Stumbles

The Breakdown First Five - Friday, June 14, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. UwU Bounty

UwU Lend has offered a $5M bounty to anyone who can identify the person who has exploited the platform. Last week, a price manipulation attack was used to extract $20M from the platform, which was then shut down. UwU re-opened and began reimbursing hack victims, only to be hit by another attack from the same wallet address. The second attack extracted $3.7M. All very normal and cool. Definitely nothing to see here. Sifu claims he was not involved. 

4. Riot Pushes On Bitfarms Takeover

Riot Platforms have purchased additional Bitfarms shares, bringing their total stake to 14%. The stock is up 28% since the hostile takeover attempt began. Riot purchased its most recent tranche of shares at around $2.70 per share, well above the original $2.30 takeover offer valuation. Riot is getting close to triggering the poison pill adopted by Bitfarms, which triggers at 15% ownership. Riot said that Bitfarms had refused to engage “privately and in good faith.”

3. Anti-Crypto FDIC Replacement

The Whitehouse has tapped CFTC commissioner Christy Goldsmith-Romero to become the next head of the FDIC. While she is extremely qualified, Goldsmith-Romero has consistently outlined her concerns with DeFi and crypto derivatives markets more broadly. Caroline Crenshaw has also been nominated for a second SEC term. If the Biden administration wanted to signal a crypto-friendly pivot and the end of Chokepoint 2.0 at the FDIC, this ain’t it.  

2. Gensler Grilled

At a combined budgetary hearing for the CFTC and SEC, Gary Gensler was on the hot seat. He requested a $2.6B budget for the coming year, an 8% increase. Gensler complained that a House provision in the funding bill would “interfere directly in ongoing cases.” He was still unable to give a straight answer on whether Ethereum is a commodity, but confirmed that the ETFs would likely be approved “sometime over the course of this summer.”

1. Huge Outflows as BTC Stumbles

Bitcoin fell below $67,000 on soft PPI and high jobless claims data, suggesting economic deterioration. The Bitcoin drawdown was accompanied by massive ETF outflows. $226M was redeemed from the products on Thursday. Fidelity experienced a $106M outflow, its second largest since launch. There were high hopes that the Bitcoin ETFs would dampen volatility due to large of buy and hold investors, but it looks like the capital isn’t as sticky as some hoped.