Five Things to Know in Crypto This Week: BTC Strikes $64k While MSTR Surges 57%

BTC-Spot ETF Market: Net Inflows Rebound Despite GBTC Outflows

BTC was up 20.44% to $62,257 from Monday (February 26) to Saturday (March 2). Net inflows into the BTC-spot ETF drove increased buyer demand, resulting in a weekly high of $64,006. BTC last visited the $64,000 handle in November 2021. November 2021 remains etched in BTC history. BTC struck an all-time high of $69,276 on November 10, 2021.

Considering BTC-spot ETF market flows from Monday (February 26) to Thursday (February 29), Grayscale Bitcoin Trust (GBTC) saw net outflows of $963.3 million. Despite the surge in net outflows, total net inflows were $1,862.5 million.

iShares Bitcoin Trust (IBIT) dominated, with total net inflows of $1,848 million from Monday (February 26) to Thursday (February 29). Fidelity Wise Origin Bitcoin Fund (FBTC) was a distant second, with total net inflows of $659.3 million over the same period.

There was limited flow data for March 1. However, GBTC net outflows remained elevated, with another $492.4 million in outflows. Total outflows for the week totaled $1,455.7 million. Significantly, GBTC has seen total net outflows of $8,898.3 million since the launch of the Nine on January 11. Despite this, the BTC-spot ETF market has seen total net inflows of $7,105.8 million (excl. figures for March 1).

MicroStrategy, BTC Purchases, and the 57% Surge to $1,079

On Monday, February 26, MicroStrategy (MSTR) founder and Chairman Michael Saylor announced the purchase of 3,000 BTC. The firm paid circa $155 million, with an average price of $51,813 per BTC.

MicroStrategy increased its total BTC holdings to 193,000, with an average purchase price of $31,544 million. Investors responded to the purchase news and BTC price trends. MicroStrategy saw its share price surge by 57.02% to $1,079.39 in the week ending March 1.

MicroStrategy outperformed BTC (+20.44%), the Nasdaq Composite Index (+1.74%), and NVDA (+4.39%).

On Wednesday (February 28), Saylor sent a bullish message on X (formerly Twitter), saying,

“You do not sell your bitcoin.”

MSTR jumped 104.07% in February 2024, its best outing since a 105.17% gain in November 2020.

SEC v Ripple: SEC Extension Request Fuels Investor Optimism

SEC v Ripple case-related updates garnered investor attention this week.

On Tuesday (February 27), the SEC filed a request to extend the deadline to submit its remedy-related brief by one week to March 22. The filing also requested extensions to the deadlines for Ripple to submit its remedy-related brief and for the SEC to file its reply brief. The court approved the request on Friday, March 1.

The SEC and Ripple are preparing remedy-related briefs. The SEC will argue for a punitive penalty for the unregistered XRP sales to institutional investors. In July 2023, Judge Analisa Torres ruled Ripple breached Section 5 of the US Securities Act for failing to register XRP in sales to institutional investors.

Ripple will cite case law to argue against a punitive penalty. The court will only consider XRP sales to US institutional investors (Morrison v NAB). Ripple may also seek an exemption to Section 5 for XRP sales to accredited investors. The court will also base a penalty on net proceeds from XRP sales to US institutional investors (Liu v SEC), allowing Ripple to deduct expenses.

However, the strength of arguments could hinge on post-complaint activity. Judge Torres could impose a punitive penalty if Ripple continued to breach Section 5 after the SEC filed the complaint.

Nonetheless, investors reacted positively to the SEC request for an extension. On the one hand, the SEC may need more time to consider documents from discovery. On the other hand, the SEC may have no basis to argue for a punitive penalty.

XRP was up 12.24% to $0.6091 Monday (February 26) to Saturday (March 2).

Coinbase Outage and a 24% rally to end the week at $205.77

Coinbase (COIN) experienced an outage caused by a surge in traffic. On Thursday, Coinbase CEO Brian Armstrong had this to say about the outage,

“Apps are now recovering. We had modeled a ~10x surge in traffic and load tested. This exceeded that number. It’s expensive to keep services over-provisioned, but we’ll keep working on auto-scaling solutions and killing any remaining bottlenecks. Thank you for bearing with us.”

The surge in demand led to some users seeing zero balances on their Coinbase accounts and errors in buying or selling.

The outage appeared not to spook investors. Coinbase shares rallied 23.97% to $205.77 in the week ending March 1. Coinbase last held onto the $200 handle in March 2022.