Bitcoin Strategic Reserve Becomes Reality

GM Anon!

The market’s in a weird spot—some of the most bullish developments in crypto history are unfolding, yet sentiment feels like we’re back in a bear market. BTC is holding around $90K, but the excitement just isn’t there. 

Despite this muted reaction, we’re still in a bull market, and eventually, the momentum will shift. And yes, alt season will come—it’s just not time yet. The signs are there, but expect this cycle to play out differently than before. Now let’s dive in!

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TLDR

• U.S. government officially holding BTC, removing $17B in potential sell pressure. No taxpayer funds will be used for purchases.

• JPMorgan sees BTC and ETH as viable reserve assets but questions XRP, SOL, and ADA due to regulatory uncertainty.

• BTC ETF flows mixed—heavy outflows in late February, slight recovery in early March. 

• Bitwise pushes altcoin ETFs with an Aptos filing, following previous applications for XRP and DOGE. APT adoption has been rising since late 2024.

• DeFi TVL has dropped $30B since December’s peak, reflecting broader market caution and capital rotation.

• Solana bot trading activity has bounced back, signaling renewed retail engagement.

• Ethereum liquid restaking cooled after early 2024’s surge, as incentives shift and competition increases.

• Berachain leads liquidity flows with $206.7M in net inflows, while Base and Arbitrum see outflows.

U.S. Strategic Bitcoin Reserve

The U.S. government is taking a significant step toward recognizing BTC as a strategic asset. President Trump has signed an executive order establishing a Strategic Bitcoin Reserve, alongside a Digital Asset Stockpile. This reserve will be built using BTC seized from criminal and civil cases, signaling a shift from past government sell-offs. Instead of liquidating these assets, the U.S. now plans to hold BTC as part of its financial strategy.

The Digital Asset Stockpile will include other cryptos obtained through forfeitures, but no taxpayer funds will be used for new acquisitions. While some investors had hoped for direct government purchases, the decision to retain existing BTC removes $17B in potential sell pressure, which could have weighed on the market.

This move aligns with a broader trend of BTC adoption at both state and global levels. Several U.S. states are exploring their own BTC reserves, and internationally, Dubai and Abu Dhabi wealth funds are rumored to be accumulating BTC. Countries like El Salvador and Bhutan have also increased their BTC holdings, reinforcing the idea that BTC is becoming a recognized reserve asset worldwide.

The market reaction has been mixed—some see it as a symbolic gesture, while others view it as a step toward BTC’s long-term institutional and sovereign adoption. Regardless, this decision further cements BTC’s role as a serious financial asset, separate from other cryptos.

While the immediate impact remains uncertain, the momentum behind BTC as a reserve asset continues to grow. With governments and institutions increasingly treating BTC as part of their financial strategy, this move is another milestone in BTC’s evolving role in the global economy.

While the creation of a U.S. Strategic Bitcoin Reserve has sparked excitement, skepticism remains, particularly from major financial institutions like JPMorgan. Analysts at the bank estimate the likelihood of congressional approval at less than 50%, citing policy obstacles and lingering concerns about market trust. 

While BTC and ETH are viewed as potential candidates for a reserve, the inclusion of XRP, SOL, and ADA raises red flags due to regulatory uncertainty and price volatility. As discussions unfold, BTC and ETH remain the only realistic options for inclusion in a national reserve, while XRP, SOL, and ADA will need to demonstrate long-term stability and clearer regulatory standing before being considered.

White House Crypto Summit

President Trump hosted the first-ever White House Crypto Summit on March 7, marking a pivotal moment for U.S. digital asset policy. Led by AI and crypto czar David Sacks and Bo Hines, executive director of the President’s Working Group on Digital Assets, the event brought together top executives, investors, and regulators to discuss the future of crypto regulation, stablecoins, and the potential for a U.S. BTC reserve. 

While Trump has positioned himself as pro-crypto, industry leaders remain divided on whether his broader economic policies have strengthened or weakened investor confidence. Stablecoin oversight was a major focus, with discussions on whether issuers—both domestic and offshore—should register with U.S. authorities. 

ETFs Flows

In recent weeks, BTC ETF flows have been choppy, reflecting shifting market sentiment. Late February saw heavy outflows, with over $2.1B pulled from ETFs between February 25-27, contributing to BTC’s pullback from its highs. However, February 28 brought a brief reversal, with $94.3M in net inflows suggesting some renewed confidence.

Since then, the trend has remained mixed. While there were some inflows on March 5, outflows resumed on March 4 and March 6, totaling over $277M. GBTC continues to be the biggest source of selling pressure, with $22.38B in outflows, while IBIT and HODL remain strong accumulators, with IBIT now holding $39.61B.

ETH ETF flows have also been mixed in recent weeks, showing less conviction compared to the stronger accumulation seen in BTC. From February 26-28, ETH ETFs saw over $186M in outflows, a stark contrast to the relative strength in BTC ETFs, which saw some recovery during that period. March 4 marked a temporary shift, with Fidelity adding $21.7M and Bitwise contributing $4M, signaling selective buying. However, this was minor compared to the more aggressive BTC inflows observed at the same time.

Aptos Spot ETF

Bitwise is making a strong push into altcoin ETFs, filing an S-1 registration with the SEC for a spot APT ETF after recently registering an APT ETF entity in Delaware. This signals growing institutional interest in APT and a broader effort to expand crypto investment options beyond BTC and ETH.

With BTC and ETH ETFs now established, asset managers are looking at altcoins, and APT is the latest to get attention. Bitwise has already filed for XRP and DOGE ETFs, and APT— a high-speed Layer-1 blockchain known for its Move-based smart contracts and expanding DeFi ecosystem— is becoming a strong candidate for institutional investment.

This move follows Bitwise’s launch of an APT Staking ETP on six Swiss exchanges and a similar product from 21Shares in Amsterdam and Paris, reinforcing the increasing demand for APT exposure. If approved, the ETF would offer U.S. investors a regulated way to invest in APT without needing to buy the token directly.

Aptos has been seeing a rise in adoption, particularly toward the end of last year, as its ecosystem gained momentum. If this ETF moves forward, it could further validate APT as a serious player in the L1 space.

Market Data Points 

DeFi TVL has dropped by over $30B since its local peak of $138.27B on December 17, reflecting broader market caution and potential capital rotation. 

Solana’s bot trading volumes have rebounded after a recent dip, suggesting a resurgence in retail users partaking in the ecosystem. This could indicate renewed confidence in Solana’s ecosystem.

Meanwhile, Ethereum liquid restaking, which saw a significant surge in early 2024 through protocols like EtherFi, Renzo, and Puffer, has cooled off. The decline in unique depositors suggests the initial speculative rush has faded, with users shifting focus elsewhere as incentives evolve and competition increases.

Liquidity flows are also seeing major shifts, with Berachain leading net inflows at $206.7M, significantly outpacing Ethereum and Solana. This suggests growing interest in Berachain as a liquidity hub, while Base and Arbitrum are experiencing notable outflows, hinting at changing market preferences. 

Majors & Memes

Despite difficult market conditions, the past week has shown resilience among key assets. BTC gained 10.6%, holding near all-time highs and reinforcing its dominance. ETH climbed 4.0%, showing strength even as capital rotates elsewhere. SOL maintained solid momentum, up 7.6%, while SUI followed closely with a 7.1% increase, reflecting continued growth in L1 ecosystems. ADA was the standout, surging 46.4%, significantly outperforming the market. DOGE rose 10.0%, benefiting from renewed speculative interest, while XRP saw a 24.4% recovery amid broader volatility.

Crypto Mindshare: AI Leads, but DeFi & GameFi Gain Ground

AI continues to dominate at 32.03%, but momentum is slowing after its explosive run. Meanwhile, DeFi (13.91%) is steadily gaining traction as capital flows into yield opportunities. Meme coins (9.67%) remain in the mix but lack fresh catalysts, struggling to generate momentum.

GameFi (6.88%) is seeing renewed interest after months of stagnation, though it remains far behind AI and DeFi in engagement. Other narratives like EVM chains (4.37%), ETFs (4.08%), and RWAs (3.69%) are staying relevant but not driving the conversation. Stablecoins (3.06%) and Layer 2s (2.93%) remain foundational but aren’t speculative narratives.

DeFi Mindshare: HYPE & BERA Take Center Stage

HYPE (11.13%) and BERA (7.67%) lead DeFi’s resurgence, drawing heavy engagement. Blue-chip DeFi names like UNI (5.83%) and AAVE (3.69%) remain relevant, proving their staying power. LINK (2.66%), ENA (2.30%), and RUNE (2.45%) see steady engagement, likely due to integrations and yield opportunities.

RAY (2.21%) and SEI (2.15%) are making moves, signaling increased adoption. Pendle (2.49%), a yield trading platform, continues attracting attention as traders search for yield. The broader trend suggests DeFi is regaining traction, with newer projects driving engagement alongside established names.

AI Mindshare: KAITO Leads, Broader Interest Emerging

AI remains the dominant narrative, with KAITO (29.74%) leading by a wide margin. Interest is still strong but is spreading across different sectors. IP (4.11%), TAO (3.09%), and SHELL (2.37%) are gaining traction, while BNKR (2.33%) and ARC (1.98%) show growing interest in AI-powered infrastructure.

AI’s integration with L1s is also drawing attention, with SEI (3.54%), NEAR (3.37%), and HENLO (2.57%) staying relevant. While AI remains the top theme, its dominance is evolving as new projects emerge.

Smart Money Flows

Smart money activity in Solana has seen some notable shifts. Pwease climbed to the top of the smart money accumulation chart this week. TRUMP remains the largest position at $5.26M, showing no movement but maintaining dominance.

Fartcoin (+7.79%) reached $461.31K, while DOGEAI (+33.48%) surged to $201.53K, indicating renewed interest. San (+67.93%) saw the largest percentage gain, though total holdings remain modest at $94.48K. Arc (-19.05%) had the biggest drop, now at $416.62K, signaling a shift in sentiment with this popular runner.

Ethereum’s smart money flows reflect both accumulation and exits. SPX (+36.85%) saw strong accumulation, now at $181.08K, while Mog (+27.08%) and Wolf (+14.19%) also saw fresh inflows.

DOGE (-32.03%) had the largest sell-off, dropping to $160.99K, signaling a sharp rotation out. CULT (-6.92%) faced sell pressure but remains the largest holding at $1.34M. Shrub (-2.5%) and Wojak (-2.72%) saw minor outflows, while Russell held flat. The trend suggests SPX and Mog are seeing accumulation, while DOGE is experiencing major exits.

That wraps up this post—we hope you found the insights valuable. See you next week, anon! 🚀