Shock absorber

Amidst strife in the Middle East, U.S. Bitcoin ETFs proved steamy, pulling in $458 million worth of inflows on Monday. Last week, across three straight trading sessions, the cadre of funds, led by BlackRock’s IBIT, added $1.1 billion.

Although the U.S. had staged a massive military buildup prior to the joint strikes (with Israel) on Iran that began on Saturday, there was, for most of last week, mainly optimism in the market that conflict could be avoided.

Yesterday’s industrywide BTC ETF haul was one of this year’s biggest, suggesting, as CoinDesk pointed out, that institutional buyers are “absorbing the weekend shock that briefly sent BTC to $63,000.”

Wintermute analysts warned that institutional participation remains off the pace of 2024 and they view the crypto market as fragile. Saturday's short-lived initial downturn sopped up the first wave of geopolitical panic; the ensuing rebound, Wintermute’s team theorized, stemmed from the market’s belief that BTC’s 45% pullback from its autumnal record high had already absorbed the brunt of whatever beatdown might have come due post airstrikes.

Meanwhile, it turns out the era of AI-conducted commerce has arrived ahead of schedule and needs a unique set of transactions rails, according to Near Protocol. To that end, the platform has recently launched initiatives such as IronClaw, which involves AI agents in encrypted enclaves, as well as a Confidential GPU Marketplace for AI enterprise projects. CoinGecko shows NEAR close to $1.33 following a gain of 11% in the past day. AI-related momentum has helped the token’s total market capitalization surge by 37% to $1.7B just since last week.

NEAR is the 45th-largest token in terms of total market cap, according to CoinGecko. Among the Top 50 coins, only NEAR recorded a double-digit return, percentage-wise, in the past day.

Showing some surprising resilience, Bitcoin raced to nearly $70K yesterday before pulling back overnight. At its low ebb over the weekend, BTC fell below $63K. As of 7:30 a.m. (EST), the largest crypto was $67,540, per CoinGecko.

"Crypto's resilience in the face of geopolitical escalation is constructive and suggests room for tactical upside as defensive positioning unwinds,” Fundstrat’s top researcher Sean Farrell told Yahoo Finance. 

At the moment, BTC seems to be acting more like a store of value and less like a high-beta tech asset.

Nasdaq futures as of early Tuesday were tanking.

Oil started spiking again this morning as traders contemplated war without a quick, tidy conclusion. Concurrently, Dow futures tumbled 800 points in a harbinger of a rocky session possibly to follow.

Suddenly, stability can be found in the crypto world. 

One of the best-performing U.S. stocks yesterday was Circle. The stablecoin issuer’s publicly trade shares shot up 15%. This follows a major surge last week in the wake of the company’s announcement that revenues soared in Q4. Circle’s USDC has a market value of $76B, making it the second-largest stablecoin after Tether’s USDT. That coin has a market cap of $184B.

In a related development, Tether released its first reserve report for its new U.S.-regulated stablecoin, USAT. Deloitte reviewed the USAT situation — as a way to vouch for a moment-in-time snapshot of reserves, as opposed to doing a full-on audit of Tether’s finances — and the accounting firm can hereby attest to USAT having $17.6M in reserve assets backing 17.5 million tokens, CoinDesk said. The USAT token is designed to comply with new U.S. regulations.

Momentum has swirled around the dollar-pegged digital asset sector since the passage last year of stablecoin legislation in the U.S. 

Riding this high is a non-stablecoin, STABLE, but one which is connected with Stable, a blockchain specifically built for stablecoin payments. It boasts the inclusion of an elegant settlement layer powered by an internally shared, dollar-pegged transaction fee asset (“USD₮”). 

Four days ago, STABLE hit an all-time high of $0.03889, according to CoinGecko. While it has since shed 24%, STABLE has nevertheless more than tripled since Christmas. It’s CoinGecko’s No. 90 coin with a market cap of roughly $600M. “General-purpose blockchains are optimized for trading and computation,” Stable’s team insists, “but not for payments.”