The Daily: Bessent says govt won’t buy bitcoin for strategic reserve, Ethereum ICO whale sells another $5 million in ETH, and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

Happy Thursday! Crypto markets turned red this afternoon after U.S. PPI data came in hotter than expected — marking the highest annual increase since February.

In today’s newsletter, U.S. Treasury Secretary Scott Bessent appears to confirm that the government won’t buy more bitcoin for its strategic reserve, an Ethereum ICO whale offloads another $5 million worth of ETH, Elon Musk’s SpaceX bitcoin holdings top $1 billion, and more.

Meanwhile, the banking industry calls for fixes to the GENIUS Act signed by President Trump, citing alleged financial risks.

Plus, “Self-dealing, dressed up as capital deployment,” RT Watson takes a look at “DAT” crypto treasury craze dividing the industry in The Block’s latest feature piece.

Let’s get started.

US Treasury Secretary Bessent says government won’t buy bitcoin for strategic reserve

During a short segment of an interview with Fox Business on Thursday morning, Treasury Secretary Scott Bessent said that the U.S. will not be purchasing more bitcoin for President Trump’s strategic reserve.

• However, Bessent did reiterate that current seized assets would continue to be held, with no bitcoin sold, and that future confiscations could add to the strategic reserve over time.
• “We’re not going to be buying that, but are going to use confiscated assets and continue to build that up. We’re going to stop selling that,” he told host Maria Bartiromo. “You know, I believe that the bitcoin reserve at today’s prices is somewhere between $15 and $20 billion.”
• Trump’s executive orders earlier this year created both the Strategic Bitcoin Reserve and a broader Digital Asset Stockpile, though the government already confirmed it would not acquire additional assets for the latter beyond those obtained through forfeiture proceedings.
• Trump had also directed Bessent and Commerce Secretary Howard Lutnick to develop budget-neutral strategies for acquiring additional bitcoin, provided they had no incremental costs to American taxpayers.
• However, unless Bessent misspoke and meant to only refer to the crypto stockpile, he appears to have confirmed the government will not be buying bitcoin for that separate reserve, too.
• The Treasury Department did not respond to a request for comment from The Block.

Ethereum ICO whale offloads another $5 million worth of ETH

An Ethereum initial coin offering whale moved another 1,060 ETH worth $5.1 million to Kraken on Thursday, marking their fourth transfer in as many days, according to onchain analysts.

• The ICO participant has deposited a total of more than $24 million in ETH to Kraken this week, leaving around 4,657 ETH ($21.9 million) in this particular wallet.
• While it isn’t certain that the user no longer owns the ETH, such transfers to crypto exchange deposit addresses often indicate selling.
• The participant initially received 100,000 ETH for $31,100 at the time of the ICO, now valued at $471 million, Onchain Lens said, citing Nansen data.
• The whale still holds more than 50,000 ETH across multiple wallets in total, the analysts noted.

Elon Musk’s SpaceX bitcoin holdings top $1 billion

SpaceX’s holdings of 8,285 BTC reached a value of more than $1 billion as bitcoin hit a new all-time high overnight before correcting.

• The Elon Musk-led firm reduced its holdings by around 70% in 2022 from 28,000 BTC, following market shocks like the collapse of the Terra ecosystem and FTX, but has retained that level since, per Arkham data.
• Another Musk firm, Tesla, also trimmed its bitcoin stash during the same period, now holding 11,509 BTC valued at around $1.4 billion.
• Bitcoin’s surge past $124,000 was fueled by expectations of U.S. interest rate cuts after cooler-than-expected macro data. However, that move was quickly corrected on Thursday following the PPI print.

Ark Invest buys $172 million in Bullish shares as stock soars on NYSE debut

Cathie Wood’s Ark Invest bought $172 million of Bullish shares across three of its exchange-traded funds on Wednesday as the crypto firm made its debut on the New York Stock Exchange.

• The ARK Innovation ETF (ARKK) led the investment manager’s purchases with 1.7 million shares, followed by ARK Next Generation Internet ETF (ARKW) and ARK Fintech Innovation ETF (ARKF) with smaller allocations.
• Bullish’s stock soared 83.8% to close at $68 on its first day of trading and has gained another 9% so far on Thursday.
• The company raised $1.1 billion in its IPO, pricing shares at $37 and is planning to use proceeds from the offering to support operations and potential acquisitions.

Coinbase completes $2.9 billion acquisition of Deribit

Coinbase completed its $2.9 billion cash-and-stock acquisition of Deribit, expanding its product offering across futures, perpetuals, and options.

• The deal positions Coinbase as the global leader in crypto derivatives, integrating $59 billion in open interest and over $1 trillion in annual trading volume.
• The transaction included $700 million in cash and 11 million shares of Coinbase Class A common stock.
• Notably, Deribit’s founders, John Jansen and Marius Jansen, are exiting the company following the acquisition.

In the next 24 hours

• It’s quiet on the economic calendar front.
• Avalanche, Starknet, and Sei are among the crypto projects set for token unlocks.

Never miss a beat with The Block’s daily digest of the most influential events happening across the digital asset ecosystem.

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