opinion

Crypto SWOT: Crypto trading volumes dropped sharply in February

Kitco Media
By Frank E Holmes
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Crypto SWOT: Crypto trading volumes dropped sharply in February teaser image

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Story, rising 31.28%.
  • Binance received a $2 billion minority stake investment from Abu Dhabi’s MGX, the first institutional investment in the world’s largest cryptocurrency exchange. MGX’s investment is part of its broader push into funding AI infrastructure, including supporting U.S. President Donald Trump’s AI infrastructure plan, according to Bloomberg.  
  • World Liberty Financial, one of the Trump family’s crypto ventures, has discussed doing business with the world’s largest digital-asset exchange, Binance. In addition, representatives of the Trump family have held talks with Binance about taking a stake in its U.S. arm called Binance U.S., writes Bloomberg. 

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performer for the week was Hedera, down 17.37%.
  • Crypto trading volumes dropped sharply in February as concerns that President Trump’s tariffs on Mexico, Canada and other countries would stifle international trade, reducing investor demand for adding to risky investments. Combined spot and derivatives trading volume on centralized exchanges fell 21% to $7.2 trillion, the lowest level since October, according to Bloomberg.  
  • Sam Bankman Fried appeared on Tucker Carlson’s podcast criticizing Joe Biden and SEC Chair Gary Gensler while expressing hope for what he’s heard from Donald Trump. Bankman-Fried said he was shocked by the first two years of Biden’s administration and described crypto regulation under Gensler as “something of a nightmare,” Bloomberg reports. 

Opportunities

  • Crypto payments network Mesh said it has raised $82 million in a funding round led by Paradigm that values the startup at $500 million. Founded in 2020, Mesh connects exchanges, wallets, and financial services platforms to enable crypto payments and conversions. Mesh has partnerships with companies such as Metamask, Shift4, and most recently Revolut, writes Bloomberg.  
  • Defiance’s leveraged Strategy (MSTR) exchange-traded funds (ETFs) saw a surge in activity on Monday as the bitcoin holding firm’s shares fell to their 200-day average, Bloomberg reports. A record 24.33 million shares in the Defiance daily target 2x long MSTR changed hands as the ETF price slipped 32%, the lowest since September.
  • Russian central bank has proposed to allow buying and selling crypto assets to a limited number of investors. Only qualified individual investors, corporate qualified investors, and financial organizations will be eligible to conduct transactions with crypto, writes Bloomberg.  

Threats

  • The deluge of Bitcoin and crypto ETF inflows in 2024 may shift the so-called melting ice-cube risk to the speculative digital assets themselves, says Bloomberg. The chart below shows what might be the start of downward reversion in the Bloomberg Galaxy Crypto Index and upward in gold ETF holdings.

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  • An Argentine prosecutor asked a judge on Thursday to issue an Interpol "Red Notice" for Hayden Davis, who claims to be behind the launch of a memecoin backed by Bitcoin reserves. After Milei endorsed his memecoin, its value skyrocketed, reaching a market cap of more than $4.5 billion, according to Bloomberg.
  • A San Francisco federal jury found Marcus Rowland Andrade guilty of one count of wire fraud and one count of money laundering for orchestrating a multimillion-dollar pump and dump. Andrade, founder of AML Bitcoin, could face decades in prison under the verdict, according to Bloomberg. 
Kitco Media

Frank E Holmes

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., a boutique investment advisory firm based in San Antonio that manages domestic and offshore funds specializing in the natural resources and emerging markets sectors. The company’s no-load mutual funds include the Global Resources Fund (ticker PSPFX), the World Precious Minerals Fund (UNWPX) and the Gold Shares Fund (USERX).

Please consider carefully the fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk.

The S&P/TSX Global Gold Index is an international benchmark tracking the world’s leading gold companies with the intent to provide an investable representative index of publicly-traded international gold companies. The FTSE Gold Mines Index Series encompasses all gold mining companies that have a sustainable and attributable gold production of at least 300,000 ounces a year, and that derive 75% or more of their revenue from mined gold.

Holdings as a percentage of net assets as of 6/30/07: Jiangxi Copper (China Region Opportunity Fund 1.74%); Silvercorp Metals Inc. (World Precious Minerals Fund 2.78%, Global Resources Fund 0.89%, China Region Opportunity Fund 2.42%); Gold Fields Ltd. (Gold Shares Fund 6.05%, World Precious Minerals Fund 2.58%, Global Resources Fund 0.39%); Sino Gold Mining Ltd. (Gold Shares Fund 1.03%, World Precious Minerals Fund 0.58%, China Region Opportunity Fund 0.27%); Anglogold Ashanti (0.0%); Dynasty Gold (0.0%).

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Bitcoincryptocrypto ETFAbu DhabiMGX
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