Is a New Era of State Reserves Coming? – Market Info

The cryptocurrency market has experienced a decline over the past two weeks, with its market capitalization dropping by over 8%. Bitcoin dominance continued to rise and is currently at 61.3%. The Fear & Greed Index shows a level of 46 out of 100, indicating that the market is in the fear zone.

Is a New Era of State Reserves Coming?

Recently, there has been growing interest in the United States regarding the integration of Bitcoin into state financial reserves. Just a few days ago, the states of Kentucky and Missouri joined the increasing number of states proposing legislation to create Bitcoin reserves.

On February 6, 2025, Kentucky introduced bill KY HB376, which would allow the State Investment Commission to allocate up to 10% of excess state reserves into digital assets, including Bitcoin. The legislation also specifies that eligible digital assets must have a market capitalization exceeding $750 billion on average over the previous calendar year. Currently, Bitcoin is the only cryptocurrency meeting this criterion, with a market cap of $1.9 trillion. Kentucky thus became the 16th state in the U.S. to propose legislation for the creation of a Bitcoin reserve.

In the state of Missouri, Representative Ben Keathley introduced House Bill 1217, which would allow the state to hold and accept Bitcoin for state payments. This is the second bill related to Bitcoin reserves in the state, following the earlier proposal titled Senate Bill 614. Keathley stated that this move would help diversify the state’s portfolio and protect it against inflation.

These initiatives are part of a broader trend, with several U.S. states, including Arizona, Alabama, Florida, and Texas, exploring the possibility of integrating Bitcoin into their financial systems. The goal of these legislative efforts is to diversify investments and integrate digital assets into state finances while addressing the challenges associated with the regulation and classification of these assets. This development indicates the growing recognition of Bitcoin as a potential tool for inflation protection and a means to modernize state financial strategies. Source

Hashrate Reaches New All-Time High

On February 8, 2025, the Bitcoin network set a new all-time high in its hash rate, reaching 845 million TH/s, marking an increase of over 43% compared to the previous year.

Hash rate, an indicator of network security, reflects the computational power miners use to mine blocks and process transactions. A higher hash rate enhances network security but also increases competition among miners and energy costs. Along with the increase in hash rate, mining difficulty also rose by 5.61% to 114.17 trillion, reaching a historic maximum.

Despite these increases, daily earnings for miners dropped to $43.52 million, a decrease of 10.48% over the past 24 hours and 7.3% year-over-year. This decline is partially due to Bitcoin’s price, which has stayed below $100,000 since the beginning of the month and even fell to $95,000 on Wednesday. Falling revenues and rising costs pose a challenge for miners in maintaining profitability and managing operations efficiently. Source

Grayscale Aims to Launch Cardano ETF

On February 10, 2025, Grayscale Investments, in collaboration with NYSE Arca, filed a proposal to create a spot ETF focused on the cryptocurrency Cardano (ADA). If approved, this would be Grayscale’s first standalone investment product centered on Cardano. According to the filed proposal, Coinbase Custody Trust Company will act as the asset custodian, and BNY Mellon Asset Servicing will serve as the fund’s administrator.

The move to create a Cardano ETF follows a series of similar applications by Grayscale in recent weeks. For instance, on February 6, 2025, the U.S. Securities and Exchange Commission (SEC) registered Grayscale’s amended request to convert its existing Solana Trust into a spot ETF focused on the cryptocurrency Solana (SOL).

“The proposed rule change will facilitate the listing and trading of another type of exchange-traded product, and the first such product based on ADA, which will enhance competition among market participants for the benefit of investors and the market,” the filing states.

These initiatives are part of a broader trend, as several asset managers are filing requests for approval of spot ETFs focused on various cryptocurrencies, indicating a growing interest in such investment products within traditional financial markets. Source

BTC Supply on Exchanges Continues to Decline

The amount of Bitcoin on cryptocurrency exchanges has dropped to a three-year low, reaching 2.5 million BTC. The ongoing outflow of BTC from exchanges to private wallets suggests a potential supply shock, according to experts, as institutional demand through ETFs continues to rise.

Source: CryptoQuant

The decrease in the available supply of Bitcoin on exchanges could lead to a price increase if demand for BTC exceeds its available supply. Despite recent selling pressures and a significant correction related to a potential trade war, Bitcoin is currently holding above the $95,000 level, indicating strong interest from both institutional and individual investors.

However, analysts caution that stagnating inflows into spot Bitcoin ETFs may influence future price movements. Maintaining the psychological threshold of $95,000 will be crucial for Bitcoin’s continued growth and preventing further volatility. Overall, Bitcoin is expected to maintain an optimistic price trend at least until the end of 2025, influenced not only by standard factors but also by geopolitical and economic developments worldwide. Source

Binance and SEC Postpone Their Dispute

The U.S. Securities and Exchange Commission (SEC) and Binance jointly requested a 60-day pause in their ongoing lawsuit. This move comes after the SEC established a new task force focused on cryptocurrencies, aimed at developing a clear regulatory framework for the crypto industry in the United States.

In a joint filing on February 10, 2025, the SEC and Binance stated that the work of this task force could influence and facilitate the potential resolution of their case. After the 60-day period, both parties plan to submit a joint report on the status of the case and consider the possibility of extending the pause.

The agreement between the two institutions follows the appointment of Mark Uyeda as the interim chair of the SEC. Uyeda initiated the creation of the task force, led by Commissioner Hester Peirce, known for her pro-crypto stance, with the goal of creating clear and practical regulatory guidance for the crypto sector. Experts expect that similar requests for delays in lawsuits could be filed by other crypto companies, such as Ripple, Coinbase, and Kraken, which are currently in disputes with the SEC. The fact that the SEC has agreed to such a pause signals a shift in the agency’s approach to cryptocurrency regulation under new leadership. Source

MicroStrategy Breaks Records

MicroStrategy, a company known for its Bitcoin investment strategy, announced on February 10, 2025, the acquisition of an additional 7,633 BTC for approximately $742.4 million at an average price of around $97,255 per Bitcoin. This purchase increases its total holdings to 478,740 BTC, with a total investment of approximately $31.1 billion and an average purchase price of $65,033 per Bitcoin.

Originally founded in 1989 as an enterprise software company, MicroStrategy became the first major publicly traded company in 2020 to adopt Bitcoin as its primary reserve asset. Recently, the company rebranded as “Strategy” and incorporated the Bitcoin symbol into its logo, emphasizing its mission and commitment to spreading Bitcoin awareness.

Following the announcement of the latest purchase, the company’s shares rose by 2.2% to $334.63. At that time, Bitcoin’s price was around $97,398, although it has since dropped to approximately $96,000. MicroStrategy continues to strengthen its position as the largest corporate holder of Bitcoin, signaling the company’s ongoing confidence in the long-term potential of the cryptocurrency. Source

Invest With Fumbi Today

Harness the potential of cryptocurrencies simply, securely and efficiently. Start investing with Fumbi with amounts starting from €50. The Fumbi Algorithm in the Fumbi Index Portfolio tracks price movements in the cryptocurrency market for you. If you want to build your own crypto portfolios, choose the Advanced Portfolios product, where you will have access to over 90 cryptocurrencies and templates created by our team that focus on different areas within the crypto universe.

Have you come across a term in the text that you don’t understand? Never mind, you can find all the important terms related to cryptocurrencies in one place in our new Fumbi Dictionary.