Five Things to Know in Crypto This Week: SEC v Crypto and Deaton v Warrren

BTC-Spot ETF Market: Net Inflows Slump below $1 Billion

BTC was down 2.86% to $50,686 from Monday to Saturday. BTC-spot ETF market net inflows impacted buyer demand for BTC. Despite the pullback, BTC climbed to a new 2024 high of $53,026 before retreating.

iShares Bitcoin Trust (IBIT) continued to lead the way, with net inflows of $375.9 million (Monday to Thursday). However, Fidelity Wise Origin Bitcoin Fund (FBTC) took the number one spot on Thursday, with net inflows of $158.9 million. FBTC last saw higher net inflows than IBIT on February 7.

Despite net inflows rebounding on Thursday (February 22), net inflows will likely be significantly lower than the previous week. Pending flow data for Friday (February 23), the BTC-spot ETF market saw net inflows of $351 million (Tuesday to Thursday). In the previous week (Tuesday to Friday), the BTC-spot market saw net inflows of $1,778 million.

A marked decline in Grayscale Bitcoin Trust (GBTC) outflows had a limited impact on investor sentiment. Net outflows fell from $529 million to $436 million from Tuesday to Friday compared with Tuesday to Friday figures from the previous week.

SEC v Ripple: CEO Brad Garlinghouse Talks XRP, SEC, and Spot ETFs

There were no SEC v Ripple case-related updates to consider in the week. The SEC and Ripple completed remedies-related discovery on Tuesday, February 20. According to the court briefing schedule, the SEC and Ripple must file remedy-related briefs by March 13 and April 12, respectively.

The SEC and Ripple will argue for and against a punitive penalty for XRP sales to institutional investors. However, SEC plans to appeal the Programmatic Sales of XRP ruling remains in place. Crypto legal experts believe the courts will uphold the Programmatic Sales ruling. However, uncertainty continued to leave XRP below the $0.60 handle.

This week, Ripple CEO Brad Garlinghouse talked about the case, the spot ETF market, and crypto custody in an interview with Bloomberg. Garlinghouse highlighted the SEC’s losing streak in the courts while discussing Ripple’s move into the crypto custody business.

However, Garlinghouse remained coy about the possibility of an XRP-spot ETF. Asked whether Ripple is in talks with the largest issuers, particularly BlackRock (BLK), to get this done, Garlinghouse responded,

“I’m not going to comment on that, and I know BlackRock has said some things publicly. We think it makes sense for the XRP community overall.”

US politics, the US Presidential Election, Legislation, and Senator Elizabeth Warren were topics of conversation. Garlinghouse discussed funding campaigns for pro-crypto legislators and amicus curiae John E Deaton’s move into politics.

XRP was down 4.34% to $0.5330, Monday to Saturday.

Amicus Curiae Attorney John Deaton Challenges Senator Warren for Massachusetts

This week, Amicus Curiae attorney and CryptoLaw US founder John E Deaton stretched into US politics. On Monday, Deaton announced his entry into US politics, saying,

“First, it was schoolyard bullies, then it was greedy corporations and the SEC, and now I am taking on the Washington elites. johndeatonforsenate.com.”

Deaton will battle against anti-crypto campaigner Senator Elizabeth Warren for Massachusetts. A Boston.com poll had 57% saying Senator Warren was vulnerable to Deaton in the race. 39% said she was too entrenched.

Senator Warren reacted to the news, posting,

“Apparently, the MAGA Republican machine couldn’t find a single Republican in Massachusetts to run against me—so they brought in someone from Rhode Island who will have the backing of the GOP and special interest groups.”

Deaton responded to the post, saying,

“Senator, no one recruited me and I’m looking forward to a substantive discussion on the issues that are important to the good people of Massachusetts, like income inequality, inflation, housing costs, illegal immigration, the debt crisis, and veterans’ services.”

Senators Warren and Roger Marshall proposed the Digital Asset Anti-Money Laundering Act. The bill aims to impose banking-style anti-money laundering and countering the financing of terrorism (CFT) frameworks for the digital asset space. In December, Senator Marshall admitted the American Bankers Association helped draft the bill.

The admission followed a hearing on Capitol Hill, where Senator Warren paraded US Banking CEOs, who called for more crypto regulations. In an anti-crypto tirade, JPMorgan CEO Jamie Dimon famously said,

If I was the government, I would close it down.”

A Deaton victory would be a boon for the US digital asset market.

SEC v Coinbase: Ripple CEO Hints at a Coinbase Victory

The crypto community continues monitoring the SEC v Coinbase (COIN) case.

During an interview with Bloomberg, Ripple CEO Brad Garlinghouse had this to say about the SEC v Coinbase case,

“I think, if you’re following the Coinbase case, the tone from the Judge is pretty skeptical about the SEC’s arguments.”

Garlinghouse went on to discuss the regulatory landscape and regulation by enforcement, saying,

“It stops, I think, when the SEC either realizes they’re losing consistently or you have Congress lean in and write new legislation. That’s probably going to be hard in Election Year. Maybe we’ll see legislation around stablecoins this year, but I’m hopeful, and we’ll continue to advocate in Washington.”

Coinbase filed a Motion to Dismiss (MTD) in August, arguing the SEC lacks the statutory authority to regulate crypto exchanges. The SEC and Coinbase await the court ruling that could redefine the crypto regulatory landscape.

Other News:

The ECB targeted the US Bitcoin-spot ETF market with a blog reiterating that the fair value of BTC remained zero. MicroStrategy (MSTR) founder and Chairman Michael Saylor reacted to the blog, saying,

“The ECB wants everyone to know about bitcoin.”

Earlier in the week, Saylor shared a graphic highlighting the performance of MSTR, BTC, and other asset classes since MSTR adopted its BTC strategy.

Since August 10, 2020, MSTR gained 466%, with BTC up 333%. The Nasdaq Composite Index and S&P 500 rose by 44% and 49%, respectively. Gold fell by 1%.