Bitcoin Surges Amid Germany Sales, U.S. ETF Inflows

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In the early hours of Wednesday, Bitcoin saw a significant surge, briefly touching over $59,000 before settling back to approximately $57,600 by the afternoon. This increase came amid a flurry of activity from Germany’s ongoing sale of seized bitcoins and substantial inflows into U.S. spot bitcoin exchange-traded funds (ETFs).

Germany’s government has been offloading its bitcoin holdings, which once exceeded $1 billion in value, now reduced to a market valuation below that threshold. The initial stash of nearly 50,000 bitcoins, confiscated from the online piracy website Movie2k, is now down to 13,110, according to Arkham Intelligence.

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Despite the selling pressure from Germany, U.S. spot bitcoin ETFs have experienced robust capital inflows at the start of the week. According to Farside Investors, these ETFs collectively gathered $511.2 million on Monday and Tuesday.

On Wednesday, the U.S. House of Representatives faced a critical vote on whether to overturn President Biden’s veto of a bill aimed at changing the Securities and Exchange Commission’s (SEC) special regulations for custodians of crypto assets. These regulations pose significant challenges for traditional financial firms looking to offer crypto custodial services. Overturning these rules would simplify the process for traditional banks to act as custodians of digital assets. However, Custodia Bank CEO Caitlin Long expressed skepticism on social media, predicting that Congress lacks the votes needed to overturn the veto.

Simultaneously, a meeting was scheduled for Wednesday between representatives from the crypto industry, key Democratic leaders, and White House officials. Orchestrated by Democratic Rep. Ro Khanna of Silicon Valley, the gathering reflects ongoing discussions within the party. Despite this, Democrats have been slow to recognize crypto supporters as an emerging voting bloc. In contrast, Republican presidential candidate Donald Trump has been actively engaging with the crypto community, promising to alleviate regulatory burdens imposed by the SEC under the current administration.

In a related development, a Senate committee conducted a hearing on digital commodities oversight, featuring testimony from Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam. Behnam expressed concern over the lack of legislative response to the burgeoning digital asset class, highlighting the plight of everyday Americans falling victim to digital asset scams. He urged Congress to take definitive action to protect consumers.

Market observers also kept a close eye on Federal Reserve Chairman Jerome Powell’s second day of testimony in Congress. Powell’s remarks were scrutinized for any hints regarding future interest rate policies.

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Santiago Contreras has a degree in economic journalism from the Universidad de los Andes in Venezuela. He also has a master's degree in communication in organizations from the Complutense University of Madrid. In his extensive professional experience, he has practiced journalism for more than 25 years in audiovisual and print media, as a journalist, editor and editor-in-chief. He was a professor of journalism, advertising and marketing at the Universidad de los Andes. Currently, he combines his journalistic practice with his work as a professional writer and communication consultant.