Crypto Fund Inflows Quadruple & SBF Trial Latest

The SBF Trial enters Week 2, and crypto fund inflows see a massive spike

By: Zack Guzman

October 9, 2023


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GM! This week, the SBF Trial enters Week 2, crypto fund inflows see a massive spike, and drama in Congress weighs on two promising regulatory bills as the U.S. House Speaker search continues…

As always, Coinage is rounding up the top stories in Web3 so you can find the signal through the noise. Check out Coinage Host Zack Guzman discussing all these topics and more with Fox Business Crypto Reporter Eleanor Terrett on our usual Monday Crypto Digest above.

In Crypto Fund Flows…

According to CoinShares’ latest crypto investment report, investment activity in crypto spiked fourfold versus last week. The report also spotlighted an uptick in Bitcoin (BTC) trading volumes — increasing 16% on tracked crypto exchanges.

While Bitcoin was the main beneficiary, Solana was not to be outdone — with CoinShares noting that the altcoin also garnered a substantial surge in inflows, recording $23.9 million for it’s largest weekly haul since March 2022.

It should be interesting to see how Bitcoin dominance, or the relative % of Bitcoin’s share of the overall crypto market, fluctuates as progress is made on the rush to get a Bitcoin Spot ETF approved this year. Right now, Bitcoin accounts for a little over half of crypto’s total market cap — down from a peak of near 70% in 2020. That could change if the Bloomberg analysts who are predicting about a 75% chance of a Bitcoin ETF getting approved, are proven right this year.

Bitcoin's dominance (as a % of the entire crypto market) is slowly climbing.
Bitcoin's dominance (as a % of the entire crypto market) is slowly climbing.

In the SBF Trial…

The second week of the SBF trial is expected to ratchet up the bad news for SBF and his defense. To close last week, SBF’s co-founder Gary Wang basically came out and said SBF totally knew and asked multiple times for Alameda to be cleared in using and abusing customer deposits. Sam’s ex-girlfriend and former CEO of Alameda, Caroline Ellison, is expected to back up Gary’s recollection of the facts as soon as today.

For Sam’s defense, that could mean his strategy to blame them —and his CTO Nishad Singh — could be over before it even begins. Odds are increasingly looking like Sam is going to have to testify to overcome the 3-on-1 testimony coming from his top executives. But maybe the risks that would come with Sam being cross-examined aren’t worth the marginal reward.

Worse yet, prosecutors on Monday moved to block Sam’s defense from getting to mention that FTX creditors might see the bankruptcy estate benefit from an investment in AI company Anthropic. Amazon threw billions into the company, and Google looks primed to follow. The result? FTX customers could see a significant boost in their claims getting paid out. Obviously being able to mention that in court would make Sam look (a little) less worse.

Outside the court — in the court of public opinion — we at Coinage explored the idea of Sam’s media strategy also backfiring. Last week, author Michael Lewis was largely slammed for writing a book that seems to paint SBF in a positive light. That prompted us to ask Puck News founding partner Teddy Schleifer a simple question: Did SBF play the media?

Both Coinage Host Zack Guzman and Teddy visited SBF under house arrest. Watch our latest episode for their retrospective look back on Sam’s relationship with the media.

In Collateral Damage…

After months of lobbying effort, the crypto industry looked prime to finally get two pro-crypto bills moved forward in Congress. And then… the House lost its speaker.

That means the bills — a House bill that seeks to establish rules for digital assets and another that seeks to clarify regulations for issuing and trading stablecoins in the U.S. — are most likely going to miss their moment in the sun this November. Hope could be restored if a new Speaker is named soon.

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