Following last week’s executive order establishing a cryptocurrency working group, momentum is growing at the state level. At least 14 U.S. states have introduced legislation to create state-backed Bitcoin reserves, with some proposing to allocate public funds toward BTC holdings.

The proposed laws reflect growing acceptance of Bitcoin as a financial asset, with proponents arguing that BTC could serve as a hedge against inflation and a strategic reserve asset. However, critics warn of the risks associated with Bitcoin’s volatility and the challenges of managing state-controlled digital assets.

Meanwhile, President Trump’s working group on digital assets, led by Special Advisor David Sacks, has begun its initial assessments. While the group’s recommendations are still forthcoming, industry insiders are closely watching how this policy shift could impact Bitcoin ETFs, stablecoin regulations, and federal digital asset reserves.

Bitcoin ETF flows showed significant fluctuations this week, with January 27 recording $457.6 million in net outflows, primarily driven by Grayscale’s GBTC losing $108.5 million alongside redemptions from Fidelity and Ark Invest. However, by January 30, inflows rebounded to $588.1 million, with BlackRock’s IBIT and Fidelity’s FBTC leading the way in accumulation. These movements reflect shifting investor sentiment as Bitcoin ETFs continue to shape the market landscape.

Ethereum ETF flows remained uneven, with January 27 seeing $136.2 million in outflows, led by Grayscale’s ETHE losing $84.2 million. While minor inflows were recorded on January 29 and 30, they did not fully offset earlier losses. Institutional demand for ETH ETFs appears to be fluctuating, with varying inflows across different providers. The market continues to monitor ETF activity as a key factor influencing Ethereum's positioning in the broader crypto space.

This week, LOAN Protocol (LOAN) led the gains among available tokens on Metal Pay, seeing a strong surge as interest in decentralized lending continues. XPR Network (XPR) followed with steady growth, while Metal Blockchain (METAL) and Litecoin (LTC) also posted solid increases. Metal DAO (MTL) saw a more modest uptick, rounding out the list of weekly gainers.

Czech Central Bank Considers Bitcoin Investment

Aleš Michl, the governor of the Czech National Bank, plans to propose investing a portion of the country's reserves into bitcoin to diversify assets. If approved, up to 5% of the bank's €140 billion reserves could be allocated to bitcoin. Michl acknowledges the cryptocurrency's volatility but believes that diversification through bitcoin could be beneficial for portfolio balance.

UK Government Contemplates Selling Seized Bitcoin

The UK government is considering selling £5.2 billion worth of bitcoin seized from organized criminals to address a £22 billion deficit in public finances. Former Chancellor Lord Lamont has urged swift action to sell the assets, emphasizing the potential financial benefits and the importance of not legitimizing cryptocurrency.

Grayscale Launches Dogecoin-Focused Fund

Grayscale Investments has announced the launch of an investment fund centered on dogecoin, reflecting the growing adoption of altcoins. This move aims to provide investors with exposure to the popular meme-based cryptocurrency through a structured fund. 

Over $10 Billion in Bitcoin and Ethereum Options Expire

Today, over $10 billion worth of Bitcoin and Ethereum options expired amid mixed market sentiment. This significant expiration could lead to increased volatility in the crypto markets as traders adjust their positions. 

Excite Credit Union Joins Metal Blockchain’s Banking Innovation Program

Excite Credit Union is the latest credit union to enroll in Metal Blockchains Banking Innovation Program. The program, developed by Metallicus, provides credit unions and banks with blockchain-based solutions for faster transactions, lower costs, and improved compliance. Through The Digital Banking Network (TDBN), Excite Credit Union will gain access to tools like stablecoins, digital identity management, and private subnets, aiming to enhance financial services while maintaining regulatory standards. This move highlights a growing trend of traditional institutions adopting blockchain to stay competitive in an evolving financial landscape.

Stay tuned for next week’s update, and as always, Metal Pay makes it easy to buy, sell, and trade crypto instantly. See you next time!