What Just Happened? Bitcoin Drops Despite White House’s Positive Crypto Stance

Hodl Topic, February 5th, 2025

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📈 Preview On Today’s News:

1. - Bitcoin Drops Despite White House’s Positive Crypto Stance 

2. - Crypto Czar Slams SEC’s Crackdown, Calls for Clear Rules Amid Ripple Lawsuit 

3. - CFTC Investigates Crypto.com and Kalshi Over Super Bowl Event Contracts 

Keep reading below for more!

Today’s News:

1)

Bitcoin Drops Despite White House’s Positive Crypto Stance 

Bitcoin unexpectedly fell below $98,000 even after the White House delivered encouraging news about cryptocurrency regulations and support. David Sacks, a crypto advisor appointed by Trump, revealed that the U.S. is researching strategic Bitcoin reserves, easing regulatory pressure, and appointing a crypto-friendly SEC management. Despite these developments, market reactions suggested panic selling, possibly due to fears of unexpected regulatory changes. The broader crypto market, especially altcoins, remains under pressure, reflecting uncertainty despite the White House's shift towards a more innovation-friendly stance.

• The U.S. is easing regulatory pressure on crypto, researching Bitcoin reserves, and appointing crypto-friendly leadership at the SEC.

• Despite these positive signals, Bitcoin's price dropped below $98,000, with the market reacting as if a regulatory crackdown were imminent.

2)

Crypto Czar Slams SEC’s Crackdown, Calls for Clear Rules Amid Ripple Lawsuit 

The ongoing Ripple vs. SEC lawsuit, now in its fourth year, has drawn strong criticism from Ripple CEO Brad Garlinghouse and other industry leaders, who argue that the SEC's inconsistent enforcement is stifling crypto innovation. Garlinghouse, along with attorney John Deaton, has accused SEC Chair Gary Gensler of creating an unpredictable regulatory environment without clear guidelines. Meanwhile, newly appointed Crypto Czar David Sacks has echoed these concerns, revealing that many crypto founders have expressed frustration over years of arbitrary prosecutions. Following Donald Trump’s election, optimism is growing within the crypto industry that clearer regulations may finally emerge.

• Ripple CEO Brad Garlinghouse and key industry figures have condemned the SEC's lack of clear rules, accusing it of arbitrary enforcement that harms crypto businesses.

• Crypto Czar David Sacks has emphasized the urgent need for regulatory clarity, with many in the industry hopeful that the new administration will push for fairer guidelines.

3)

CFTC Investigates Crypto.com and Kalshi Over Super Bowl Event Contracts 

The Commodity Futures Trading Commission (CFTC) is scrutinizing Crypto.com and Kalshi over their recent Super Bowl event contracts, questioning their compliance with derivatives regulations. The agency has requested documentation to assess safeguards against market manipulation and adherence to legal requirements. While Crypto.com has expressed confidence in its offerings and is cooperating with the review, it has withdrawn two contracts from evaluation and self-certified a new one tied to spectator sports. The investigation follows the CFTC’s broader efforts to regulate event-based trading, including prior scrutiny of Polymarket and offshore betting platforms.

• The CFTC is reviewing Crypto.com and Kalshi's Super Bowl event contracts to ensure compliance with derivatives regulations, focusing on market integrity and potential manipulation.

• Crypto.com has withdrawn two contracts from regulatory review and introduced a self-certified alternative, while the CFTC continues its broader crackdown on event-based trading.

4)

Trump’s Crypto Czar Backs Stablecoins to Strengthen U.S. Dollar Dominance 

David Sacks, White House AI and crypto czar under the Trump administration, emphasized that stablecoins could reinforce the U.S. dollar’s global dominance. Speaking at a press conference alongside GOP officials, he highlighted ongoing policy discussions that may require stablecoin issuers to hold reserves primarily in U.S. Treasury Bills. This aligns with Senator Bill Hagerty’s introduction of the GENIUS Act, which seeks to establish regulatory clarity in the sector. Meanwhile, congressional leaders are accelerating crypto policy development, with newly formed subcommittees focused on digital assets. Additionally, Sacks addressed Trump’s potential Bitcoin reserve strategy, confirming it remains a top priority, while deferring details on a sovereign crypto fund to incoming Commerce Secretary Howard Lutnick.

• David Sacks stated that stablecoins could strengthen the U.S. dollar’s dominance, aligning with new policy discussions that may mandate issuers to hold reserves in Treasury Bills.

• The Trump administration is prioritizing crypto regulation, with the introduction of the GENIUS Act and the formation of congressional subcommittees dedicated to digital assets.

5)

US Crypto Chief Eyes Bitcoin Reserve and Pro-Crypto Policies

David Sacks, the newly appointed US cryptocurrency czar, emphasized his commitment to making the US a leader in digital assets during a press conference alongside congressional leaders. He announced the formation of a joint working group between the House and Senate to advance cryptocurrency legislation and ensure innovation stays within the country. Sacks also revealed that the feasibility of a Bitcoin reserve is under evaluation, alongside discussions about an independent wealth fund, reinforcing the administration's strong pro-crypto stance.

• The US government is forming a joint House-Senate working group to push forward cryptocurrency legislation, signaling increased regulatory focus.

• Crypto czar David Sacks is considering a Bitcoin reserve and policies to encourage digital asset innovation in the US, aiming for global financial leadership.

6)

Galaxy Digital Partners with BitGo for Staking Amid $100M Legal Dispute 

Galaxy Digital, led by Mike Novogratz, has partnered with BitGo to provide staking services to institutional clients despite an ongoing $100 million lawsuit between the two firms. The agreement allows Galaxy, which manages over $4 billion in staked crypto, to integrate its staking and validator services with BitGo’s ultra-secure custodial solutions. This partnership enables investors to earn staking rewards while using their assets as collateral for loans and trading. Despite the unresolved legal dispute—stemming from Galaxy’s scrapped acquisition of BitGo in 2023—both companies emphasize their commitment to advancing digital asset adoption. The deal also aligns with growing speculation that staking could be incorporated into exchange-traded funds (ETFs) for proof-of-stake (PoS) assets like Ethereum.

• Galaxy Digital and BitGo have struck a deal to integrate staking services, allowing institutional investors to stake assets while using them as collateral.

• The partnership moves forward despite an ongoing $100 million lawsuit over Galaxy's canceled acquisition of BitGo, highlighting both firms' focus on digital asset adoption.

7)

Bitcoin Volatility Hits Record Low as Stablecoin Transactions Surpass Visa

Bitcoin’s annual volatility dropped to a record low in 2024, falling below 50% compared to 80% in 2022 and over 100% in 2018, according to ARK Invest’s “Big Ideas 2025” report. This stability coincided with Bitcoin’s 122.2% return and the success of U.S. spot Bitcoin ETFs, which accumulated over $100 billion in net assets by year-end. Meanwhile, stablecoins solidified their dominance in blockchain finance, with their annual transaction value reaching $15.6 trillion—surpassing Visa and Mastercard. Regulatory discussions around stablecoins gained traction, especially after Republicans secured both houses of Congress, making stablecoin legislation a priority.

• Bitcoin’s volatility hit a record low in 2024, dropping below 50%, while U.S. spot Bitcoin ETFs saw record success with over $100 billion in net assets.

• Stablecoins processed $15.6 trillion in transactions, exceeding Visa and Mastercard, prompting U.S. lawmakers to prioritize stablecoin regulation.

8)

SEC Forms New Crypto Task Force to Overhaul Regulations 

The U.S. Securities and Exchange Commission (SEC) has appointed three members to its newly formed Crypto Task Force, marking a shift in its approach to digital asset regulation. Acting SEC Chair Mark Uyeda announced the appointees, which include Richard Gabbert as chief of staff, Taylor Asher as chief policy advisor, and Landon Zinda, a former Coin Center policy director, as a senior advisor. The task force aims to establish a clearer regulatory framework for crypto assets, moving away from the previous "regulation by enforcement" strategy under former Chair Gary Gensler. It will collaborate with Congress, the Commodity Futures Trading Commission (CFTC), and the crypto industry to address regulatory uncertainty and foster innovation.

• The SEC appointed three key members to its new Crypto Task Force, led by Acting Chair Mark Uyeda, to create a clearer regulatory framework for crypto assets.

• This initiative marks a shift from the SEC’s previous enforcement-driven approach, focusing instead on proactive collaboration with Congress, the CFTC, and industry stakeholders.

9)

FTX to Begin Creditor Repayments as Crypto Czar Pushes for U.S. Innovation 

FTX is set to start repaying creditors nearly three years after its collapse, with the first wave of reimbursements beginning on February 18, 2025, for claims under $50,000. This marks a significant milestone following one of the most infamous bankruptcies in crypto history, where billions were misappropriated through FTX’s sister company, Alameda Research. Meanwhile, David Sacks, known as the "Crypto Czar," has emphasized the need for the U.S. to bring crypto innovation back onshore, citing FTX’s offshore operations as a key reason for its lack of regulatory oversight. His statements highlight the ongoing debate about the future of digital assets and consumer protection.

• FTX will begin repaying creditors on February 18, 2025, focusing on claims under $50,000, marking a major step in the aftermath of its historic collapse.

• Crypto Czar David Sacks advocates for keeping crypto innovation within U.S. borders, arguing that stronger regulatory oversight could prevent future disasters like FTX.

10)

Moss Genomics Strengthens Crypto Strategy with 460 ETH Acquisition 

Moss Genomics Inc., a Canadian biotech firm, has expanded its crypto-focused treasury strategy by acquiring 460 ETH at $4,300 per ETH, following its initial integration of Ethereum into financial operations in January 2025. The company announced the move on February 3, 2025, alongside a capital raise through private placement, aiming to leverage ETH as an alternative financing source, diversify its asset base, and explore blockchain opportunities. CEO Jack Liu emphasized that while digital assets are volatile, they offer long-term growth potential aligned with the firm’s evolving financial strategy. Moss Genomics joins a growing number of companies integrating crypto into their treasury reserves, reflecting a broader trend in corporate finance.

• Moss Genomics acquired 460 ETH as part of its expanded crypto treasury strategy, aiming to diversify its finances and explore blockchain opportunities.

• The firm sees Ethereum as a viable long-term asset despite volatility, aligning with a broader corporate trend of integrating digital assets into treasury reserves.