Main conclusions

• The price of bitcoin surged to over $59,000 in the early hours of U.S. trading on Wednesday before dipping slightly to around $57,600.
• Germany is still unloading bitcoins seized from an online piracy site by selling them to cryptocurrency exchanges, and its on-chain assets are now valued at less than $1 billion for the first time.
• Spot bitcoin exchange-traded fund (ETF) flows in the US have surpassed $500 million so far this week.
• The US House of Representatives is voting on a bill that could override the Securities and Exchange Commission’s (SEC) current policy on cryptocurrency custody for traditional banks, but the vote is likely to fail.
• The chairman of the Commodity Futures Trading Commission (CFTC) expressed concern over the lack of legislative action on cryptocurrencies in testimony to Congress on Wednesday.

Bitcoin (BTC) the price surged to above $59,000 in the early hours of the U.S. on Wednesday before stabilizing again at the $57,400 level in the afternoon. The largest cryptocurrency by market cap remained range-bound amid selling pressure from Germany and inflows into bitcoin exchange-traded funds.

German Selloff, Spot Bitcoin ETF Inflows Stabilize Bitcoin

In Germany, government-seized bitcoin assets have fallen below a $1 billion valuation for the first time after several days of being transferred to cryptocurrency exchanges. The initial in jail stock of nearly 50,000 bitcoins originally seized Germany’s online piracy site Movie2k has now dropped to 13,110, according to data from Arkham Intelligence.

Despite Germany’s Bitcoin Dump, US Spot Bitcoin exchange-traded funds (ETFs) saw strong inflows on the first two days of the week. According to Farside Investors, these ETFs saw a combined $511.2 million in inflows on Monday and Tuesday.

Congress and Democrats focus on cryptocurrencies

Wednesday could also be a big day for cryptocurrency regulation in the US, as the US House of Representatives votes on an attempt to overturn President Biden’s Veto of a bill that would overturn special Securities and Exchange Commission (SEC) regulations for crypto custodians. The SEC policy is seen as a significant challenge to traditional financial firms seeking to offer cryptocurrency custody services.

Repealing SEC policy would make it easier for traditional banks to provide custody services digital assets for its customers. But Custodia Bank CEO Caitlin Long took to social media platform X on Wednesday to say she doesn’t believe Congress has the votes to override Biden’s veto.

Somewhat ironically, a meeting between cryptocurrency industry representatives, top Democratic leaders and White House officials has also been scheduled for Wednesday. The meeting was hosted by Democratic Rep. Ro Khanna, who represents a district in California that includes Silicon Valley.

However, Democrats as a whole have been slow to acknowledge cryptocurrency supporters as a potential voting bloc, while Republican presidential candidate Donald Trump has been openly engaging with them for several months, offering to ease the regulatory burden placed on the cryptocurrency industry by the SEC under the Biden administration. Republicans have made several protections for cryptocurrencies, such as the right to Bitcoin Mining and self-custody of crypto assets, part of the party’s official platform earlier this week.

CFTC Chairman Seeks Legislative Response on Cryptocurrencies

Also on Wednesday, a Senate committee held a hearing on digital product oversight that featured testimony from Commodity Futures Trading Commission (CFTC) President Rostin Behnam.

Behnam noted the lack of legislative action in his opening remarks, stating: “What has concerned me most throughout the expansion of this digital asset class is that while ordinary Americans are victims of a digital asset scam after another, there remains no comprehensive legislative response. Members of Congress have repeatedly asked me what I am doing to protect their constituents.”

Additionally, market watchers watched Federal Reserve Chairman Jerome Powell’s second day on the job. testimony at congress Wednesday for indications of where interest rate policy may go this year.

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