Bitcoin Balance on Exchanges Reaches 7-Year Low

Hi Reader,

Thanks for reading The BlockByte Weekly, where we summarise the key updates in crypto over the last week and provide our perspective on what you need to know as an investor.​

Executive Summary

Over the last week, the crypto markets rallied by 10.6%, led by BTC (+11.7%), ETH (+14.3%) and SUI (+61%). The jump in markets followed Trump's Secretary of Treasury, Scott Bessent's comments about de-escalating the trade war with China. The renewed investor confidence saw $3B in spot bitcoin ETF net inflows, the largest weekly inflow since Trump took office.

In parallel, bitcoin balances on exchanges dropped to 2.3 million BTC, its lowest level in over 7 years. The dwindling supply comes at a time where the Federal Reserve has made it clear it will relax supervision on banks that want to enter into the digital asset sector, and a new company called Twenty One, announces that it plans to acquire as much bitcoin as possible for shareholders.

There's no doubt the overall sentiment has changed dramatically this week, whilst we have begun re-allocating steadily, there are still some potential catalysts for further downside in the weeks and months ahead as the true impact of tariffs are seen on the global economy. However, we believe that fear is suppressing prices sufficiently that these levels represent good long-term value opportunities.​​​Market Update

Crypto Markets Break Out on Positive US Trade War Comments

Crypto markets had their largest weekly rally since Trump took office, rising 10.6% on the back of Treasury Secretary, Scott Bessent's comments that the US-China trade war is "unsustainable" and that he expects the situation to de-escalate. Investors have interpreted this as bullish news that the trade war won't last for long. In addition, Trump has been demanding that Chair of the Federal Reserve, Jerome Powell, lowers interest rates in the US to avoid a complete economic slowdown and to help offset the impacts of tariffs.

The rally comes at the same time as the Federal Reserve announced that it would be loosening its supervision of banks with respect to holding digital assets, paving the way for greater institutional adoption of cryptocurrency amongst traditional financial companies. Banks in the US have up until now been largely anti-crypto, seeing it as a competitive threat. With banks now able to enter into the sector, expect to see your traditional banks first in the US and eventually in Australia, begin to offer crypto custody and investment services for everyday people. In a recent interview, Michael Saylor, CEO of Strategy says that when that happens, bitcoin will be seven figures a coin. I highly recommend watching this interview below to get Saylor's perspective on the recent progress in markets and the changing relationship between crypto and the White House.

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Bitcoin Balance on Exchanges Reaches 7-Year Low

Sensing that tariff shocks may be behind us, investors have started to re-allocate to the digital asset sector, with bitcoin being the main beneficiary. Bitcoin's price rose 11.7% this week to ~$95,000. The buying was not only spurred by ETFs which had their largest weekly net inflows in months (~$3B), but also on the announcement of the launch of a new company 'Twenty One'.

Twenty One will launch with 42,000 bitcoin on its balance sheet which will be convertible for equity at $10 a share. Twenty One's goal is to acquire as much bitcoin as possible for shareholders. The company is an amalgamation of 3 companies: SoftBank, Tether and Cantor Fitzgerald. Twenty One will be headed by Jack Mallers, current CEO of Strike, a bitcoin payments company.

SUI's Explosive Week

This week saw the price of Sui (SUI) surge by 61%. Aside from higher prices driving more buyers, there were some genuine reasons for the token to have shot up in value. The most prominent of which was the spike in stablecoin value transferred, which rose to $43B, briefly overtaking Ethereum. Stablecoins are already a $3.7T market and will be the future of traditional payments, allowing users to send, receive and spend 24/7 globally, unlike the multiple days it takes in today's banking system. Though SUI remains 38.85% below its all-time high of $5.35, we would be cautious about jumping in on the recent rally due to the probability of a pullback from its overbought conditions.

Until next week,James

James BrannanManaging DirectorBlockByte​(+61) 412 393 634​james@blockbyte.com.au​​https://blockbyte.com.au/​

BlockByte does not provide financial advice. We provide a personalised brokerage service with tailored support, research and secure custody for investing in digital assets. Reach out to our team to discuss how we can help.

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