By Omkar Godbole (All times ET unless otherwise noted)
With bitcoins bear market raging and prices falling to their lowest since November 2024, its core pitch, a hard cap of 21 million supplies, is facing fresh skepticism.
Some observers say alternative investment vehicles like ETFs, cash-settled futures and options and other services like prime-broker loans have diluted that scarcity. These tools allow investors to access bitcoin without owning the real thing, creating a “synthetic supply” that floods the market.
“Once you can synthetically manufacture the supply, the asset is no longer scarce, and once the scarcity is gone, the price becomes a derivative game, not a supply-and-demand market. That’s exactly what has happened to Bitcoin,” veteran analyst and writer of The Kendall Report, Bob Kendall, wrote on X.
Gold, silver, oil and stocks experienced a similar structural change with the debut of alternative investment vehicles, Kendall wrote. In 2023, CoinDesk highlighted how financialization of BTC creates paper requirements that mimic abundance in a market defined by raw scarcity.
This is also why investors should tread carefully with onchain metrics like “percentage of illiquid supply” because these do not account for massive “paper supply” from ETFs and futures that dilute the 21 million limit.
In the market, bitcoin lost even more ground, falling below $70,000 for the first time in more than a year.
According to veteran chart analyst Peter Brandt, the sale has all the hallmarks of campaign sales or coordinated sales by institutions and large traders instead of retail capitulation. Brandt is not sure at what level or when the decline will stop.
Most observers expect a drop below $60,000, while firms such as Stifel fear a deeper drop to $38,000, given the strengthened correlation with tech stocks, which have also taken a beating recently.
Hyperliquid’s HYPE remains the only consistent hideout. The token is up 11% year-to-date, while BTC is down almost 19%. Another interesting symbol is TRX, which is down just 2%, possibly outperforming the broader market, due to declining purchases from Treasury Tron Inc.
In traditional markets, Wall Street’s so-called fear gauge, the VIX index, is revisiting January highs above 20.00, signaling risk aversion. Actions from the US financial market suggest expectations of a smaller Fed balance sheet. Pay attention!
Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today
What to see
For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
- Crypto
- February 5: Zilliqa will undergo its hard fork that activates Cancun.
- Macro
- 5 February at 14: Mexico’s interest rate decision (previous 7%)
- 5 February at 16.30: Fed balance sheet for the period ending 4 February
- Earnings (Estimated based on FactSet data)
- February 5: Bullish (BLSH), pre-market, $0.15
- February 5: Strategy (MSTR), post-market, -$18.64
- February 5: IREN Limited (IREN), post-market, -$0.18
- February 5: CleanSpark (CLSK), after market, -$0.02
Token Events
For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
- Governance votes and calls
- February 5: PancakeSwap to host an AMA session with Arbitrum.
- February 5: Olympus hosts a community call with a live Q&A session.
- February 5: Aster hosts an AMA session with its CEO.
- Unlocks
- February 5: to unlock 5% of its circulating supply, worth $31.52 million.
- February 5: to unlock 2.31% of its circulating supply valued at $26.46 million.
- The token is launched
- No major launches planned.
Conferences
For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
Market movements
- BTC is down 1.62% as of 16 ET Wednesday at $71,467.00 (24 hours: -6.52%)
- ETH is up 0.24% to $2,130.50 (24h: -5.93%)
- CoinDesk 20 is down 1.68% to 2,077.53 (24h: -7.15%)
- Ether CESR Composite Staking Rate is up 18 bps at 3.01%
- BTC funding rate is at 0.0008% (0.8793% annualized) on Binance
- DXY is up 0.29% to 97.90
- Gold futures are down 1.22% at $4,890.20
- Silver futures are down 7.55% at $78.02
- The Nikkei 225 closed up 0.88% at 53,818.04
- The Hang Seng closed up 0.14% at 26,885.24
- The FTSE is down 0.43% at 10,357.59
- The Euro Stoxx 50 is down 0.36% to 5,949.05
- The DJIA closed Wednesday up 0.53% at 49,501.30
- The S&P 500 closed up 0.51% at 6,882.72
- The Nasdaq Composite closed up 1.51% at 22,904.58
- The S&P/TSX Composite closed up 0.56% at 32,571.55
- The S&P 40 Latin America closed up 2.89% at 3,653.05
- The US 10-year Treasury yield is down 0.8 bps to 4.27%
- E-mini S&P 500 futures are unchanged at 6,904.75
- E-mini Nasdaq-100 futures rose 0.14% to 25,033.50
- E-mini Dow Jones Industrial Average Index futures are down 0.25% at 49,466.00
Bitcoin statistics
- BTC Dominance: 59.26% (-0.39%)
- Ether to bitcoin ratio: 0.02981 (1.56%)
- Hashrate (seven-day moving average): 913 EH/s
- Hash price (spot): $32.02
- Total Fees: 3.22 BTC / $240,320
- CME Futures open interest: 114,080 BTC
- BTC Priced in Gold: 14.6 oz.
- BTC vs Gold Market Cap: 4.77%
Technical Analysis
- The chart shows daily price fluctuations of decentralized exchange Hyperliquids HYPE token.
- HYPE’s price has risen past the trend line that marks the decline from the peaks in September.
- The breakout indicates that the path of least resistance is to the higher side, shifting focus to resistance at $50.
Crypto stocks
- Coinbase Global (COIN): closed Wednesday at $168.62 (-6.14%), -1.51% at $166.07 in premarket
- Circle Internet (CRCL): closed at $55.05 (-1.98%), -1.25% at $54.36
- Galaxy Digital (GLXY): closed at $20.16 (-8.28%), -1.49% at $19.86
- Bullish (BLSH): closed at $27.20 (-1.59%), -0.51% at $27.06
- MARA Holdings (MARA): closed at $8.28 (-8.51%), -1.81% at $8.13
- Riot Platforms (RIOT): closed at $14.14 (-7.82%), -1.34% at $13.95
- Core Scientific (CORZ): closed at $16.15 (-8.96%), +0.37% at $16.21
- CleanSpark (CLSK): closed at $10.22 (-10.04%), -1.47% at $10.07
- CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $40.29 (-11.06%)
- Exodus Movement (EXOD): closed at $10.70 (+2.20%)
Crypto Treasury Companies
- Strategy (MSTR): closed at $129.09 (-3.13%), -3.24% at $124.91
- Strive (ASST): closed at $0.59 (-13.20%), -6.74% at $0.55
- SharpLink Gaming (SBET): closed at $7.08 (-7.57%), -2.54% at $6.90
- Upexi (UPXI): closed at $1.36 (-12.26%), -2.21% at $1.33
- Lite Strategy (LITS): closed at $1.06 (-7.83%)
ETF Flows
Spot BTC ETFs
- Daily net flows: -$544.9 million
- Cumulative net flows: $54.73 billion
- Total BTC holdings ~1.28m
Spot ETH ETFs
- Daily net flows: -$79.4 million
- Cumulative net flows: $11.94 billion
- Total ETH holdings ~5.92 million
Source: Farside Investors
While you were sleeping
Miners under pressure as bitcoin’s $70,000 price doesn’t cover $87,000 production costs (CoinDesk): Bitcoin is now about 20% below its estimated average production cost, adding to financial pressure across the cryptomining industry.
Precious metals, oil slide as global tensions ease; copper down (Reuters): Commodity prices from silver and gold to crude oil and copper fell on Thursday as global tensions eased following talks between China and the United States, which is also set to settle down with Iran.
Billion-dollar tech wipeout catches all stocks in AI’s path (Bloomberg): Hundreds of billions of dollars were wiped off the value of stocks, bonds and loans from companies large and small in Silicon Valley, with software stocks at the epicenter.
