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- 2.5M Bitcoin on Exchanges Sparks Supply Shock Concerns | Crypto Alpha Week 7 of 2025
2.5M Bitcoin on Exchanges Sparks Supply Shock Concerns | Crypto Alpha Week 7 of 2025
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TL;DR
2.5M Bitcoin on Exchanges Sparks Supply Shock Concerns
University of Austin Launches $5 Million Bitcoin Fund
ETH Researcher Sparks Bitcoin ‘Sound Money’ Debate
Vitalik Pushes for Higher Ethereum Gas Limits
Franklin Templeton Fund Launches on Solana
Pump.fun Launches Mobile App for Solana Memecoins
Injective Launches TradFi Index for On-Chain Stock Trading
Story Launches Public Mainnet for Programmable IP Market
Kalichain Integrates with Avalanche via R9000
Oumla Partners with Avalanche for First L1 Blockchain
Fed Chair Calls for Review of Crypto Debanking
World Liberty Financial Co-Founder's X Account Hacked
And much more!
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Bitcoin Highlights of the Week
Bitcoin exchange reserves have dropped to 2.5 million BTC, their lowest level since 2022, signaling a potential supply shock as institutional demand from ETFs continues to rise. Bitcoin remains resilient above $95,000 despite global trade tensions, with analysts citing strong institutional interest and seller exhaustion.
However, stagnating spot ETF inflows pose a challenge, as $186 million in net outflows were recorded on Feb. 10. A drop below $95,000 could trigger over $1.52 billion in liquidations. Despite short-term risks, Bitcoin’s 2025 outlook remains bullish, with price projections ranging from $160,000 to $180,000.
Strategy (formerly MicroStrategy) acquired 7,633 BTC for $742.4 million at an average price of $97,255 per BTC, increasing its total holdings to 478,740 BTC, worth over $46 billion. The purchase was funded through a $742 million stock sale.
Despite a $670.8 million Q4 net loss and $1 billion in impairment losses, the company benefits from new fair-value accounting rules, adding $12.75 billion to retained earnings. Strategy’s $82.3 billion market cap trades at a premium to its BTC net asset value. Shares rose 0.7% Friday and gained 518% over the past year, with pre-market trading up 1.9% Monday.
JP Morgan’s report suggests Tether may need to sell Bitcoin and other reserves to comply with proposed U.S. stablecoin regulations. The rules would require issuers to hold compliant assets like Treasury bills, increasing transparency and audits.
Tether, recently relocated to El Salvador, argues it has over $20 billion in liquid assets and $1.2 billion in quarterly profits. CEO Paolo Ardoino dismissed JP Morgan’s claims, calling them "salty." The legislation remains uncertain, and Tether asserts it can adapt if necessary. USDT remains the largest stablecoin, with a $32.8 billion daily trading volume.
The University of Austin has allocated $5 million of its $200 million endowment to Bitcoin, making it the first U.S. university to invest directly in the asset. Partnering with Unchained, the university will hold Bitcoin for at least five years, citing long-term value. This move follows investments by Emory and Stanford, as institutional interest grows.
Meanwhile, state governments and foundations are also exploring Bitcoin as a reserve asset. However, some experts remain skeptical, citing volatility and regulatory uncertainty. While Bitcoin adoption expands, investors await clearer guidance from regulators before mainstream institutional acceptance.
Abu Dhabi’s sovereign wealth fund, Mubadala Investment Company, acquired $436.9 million worth of BlackRock’s spot Bitcoin ETF (IBIT) in Q4 2024, according to a recent filing. The investment coincided with BlackRock obtaining a commercial license in Abu Dhabi. BlackRock’s ETF, the largest by assets under management, holds nearly $56 billion.
This marks a significant crypto-related investment by Abu Dhabi, which previously invested in Bitcoin mining. The move underscores growing institutional interest in Bitcoin, with potential long-term market implications as sovereign wealth funds increasingly allocate capital to digital assets.
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Ethereum Highlights of the Week
Ethereum researcher Justin Drake claims Bitcoin's fixed 21 million cap poses long-term security risks, making it “cooked” compared to Ethereum's adaptive monetary policy. He highlighted Bitcoin's 0.83% annual supply growth versus Ethereum’s 0.5%, arguing ETH will become “ultra sound” money as issuance declines.
Bitcoin proponents, including James Check, countered that mining efficiency, energy advancements, and economic incentives ensure sustainability. Drake also acknowledged Ethereum’s staking-related risks and proposed a “Croissant Issuance” model to balance security and decentralization. The debate underscores ongoing tensions between Bitcoin and Ethereum over their long-term economic viability.
Vitalik Buterin advocates for increasing Ethereum’s gas limit beyond the recent 36 million raise, emphasizing benefits for censorship resistance, L2 interoperability, and security. He warns that current limits may be insufficient for handling mass L2 failures or reducing costs for routing assets.
Raising L1 capacity by 5.5x to 9x could mitigate risks and enhance efficiency. He also highlights security concerns with L2 ERC-20 issuance. Meanwhile, Ethereum’s Pectra upgrade, set for April 8, aims to improve scalability by increasing blob data availability, with a staker-voted mechanism for future gas limit adjustments.
Uniswap’s Ethereum Layer 2 solution, Unichain, is now live on mainnet, leveraging the OP Stack for scalability. The network processed over 88 million transactions and 12 million smart contracts during testing. To drive adoption, Uniswap Labs will cover interface fees for swaps in the initial months.
Unichain offers 1-second block times and 95% lower gas fees than Ethereum. It will launch as a stage 1 rollup with plans for greater decentralization. With 80+ applications already building on Unichain, its integration with Across Protocol aims to enhance interoperability across ERC-7683-compatible chains.
Goldman Sachs increased its Ethereum ETF holdings by over 2,000% to $476 million in Q4 2024, while its Bitcoin ETF position more than doubled to $1.52 billion. Investments were primarily in BlackRock’s iShares and Fidelity’s crypto funds. The acquisitions reflect rising institutional adoption amid favorable regulatory shifts.
The bank’s strategy aligns with surging market prices, despite past skepticism toward crypto. Goldman also exited positions in Bitwise and WisdomTree Bitcoin ETFs. This expansion highlights Wall Street’s growing confidence in digital assets, signaling a broader shift in financial institutions’ approach to blockchain-based investments.
Ethereum developers agreed to accelerate the rollout of future protocol upgrades, ensuring faster hard fork deployments. During the Feb. 13 All Core Devs meeting, leaders endorsed a more aggressive approach to upgrade timelines, with the Pectra and Fusaka forks set for April.
Pectra, featuring 20 EIPs, enhances wallet functionality and scalability, doubling blob data availability. Fusaka, focused on transaction inclusion, has an April 10 finalization deadline. The decision follows calls from Paradigm to quicken Ethereum’s technical advancements to maintain its competitive edge as a top Layer 1 blockchain.
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Solana Highlights of the Week
Franklin Templeton, managing $1.5 trillion in assets, has launched its tokenized money market fund, FOBXX, on the Solana blockchain. The fund, named BENJI, allows each token to represent one share, integrating traditional finance with decentralized finance (DeFi). This move highlights Solana’s role in facilitating institutional adoption through its high-speed, low-cost infrastructure.
The initiative sets a precedent for future financial innovations as regulatory frameworks evolve. Franklin Templeton’s expansion onto Solana underscores growing institutional confidence in blockchain technology, positioning it as a key player in the digital asset ecosystem.
Solana-based Jupiter Exchange will begin buying back its JUP token using 50% of protocol revenue, potentially exceeding $100 million annually. Starting Feb. 17, purchased tokens will be locked for three years, creating sustained buy pressure. As the leading DEX aggregator, Jupiter processes around $3.2 billion in daily volume, benefiting from Solana’s rising activity.
This move aligns with a broader DeFi trend, where protocols like Aave and Ethena implement value-accrual mechanisms. Analysts suggest the buyback program could attract more buyers while stabilizing supply, reinforcing Jupiter’s long-term growth potential within the decentralized exchange sector.
Solana’s inbound bridge volume has surged to $10.1 billion, marking a 114% increase from February 2024’s $4.7 billion. USD Coin (USDC) led with $3.9 billion, followed by Ether (ETH) at $2 billion and Solana (SOL) at $1.5 billion. Wormhole remains the dominant bridge with $7.3 billion in volume, though deBridge has recently gained traction.
The surge from November 2024 to January 2025 saw volumes exceed $6 billion. Despite the growth, Solana’s bridge volumes remain significantly lower than Ethereum’s $38 billion over the same period, highlighting the latter’s continued dominance in cross-chain liquidity.
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