The Daily: Backpack acquires FTX EU, Bitcoin and Ethereum ETFs clock over $1 billion worth of inflows and more

Quick Take

  • Backpack Exchange, founded by former FTX and Alameda Research employees, has acquired FTX EU — the European arm of the crypto exchange that infamously collapsed in late 2022.
  • U.S. spot Bitcoin and Ethereum ETFs attracted more than $1.1 billion in combined net inflows on Monday, helping bitcoin to briefly reclaim the $100,000 level before Tuesday’s correction.
  • CFTC Chair Rostin Behnam is stepping down from the role on Jan. 20, with his final day at the agency set for Feb. 7.
  • The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

Happy Tuesday! In today's Daily, Backpack acquires FTX EU, U.S. spot Bitcoin and Ethereum ETFs register over $1 billion in daily inflows, CFTC Chair Rostin Behnam plans to step down and more.

Let's get started.

Backpack acquires FTX EU

Backpack Exchange, founded by former FTX and Alameda Research employees, has acquired FTX EU — the European arm of the crypto exchange that infamously collapsed in late 2022.

  • The acquisition follows approval by the FTX bankruptcy court and the Cyprus Securities and Exchange Commission.
  • Backpack EU will handle the distribution of the previous court-approved FTX EU bankruptcy claims to users, with CEO Armani Ferrante emphasizing the importance of customer restitution to rebuild trust in the industry.
  • The exchange plans to launch crypto derivatives, including perpetual futures, across the EU in Q1 2025.
  • Ferrante raised $20 million to found crypto infrastructure company Coral — which developed the Backpack trading and wallet tech stack — in a round co-led by Jump Crypto and FTX Ventures in 2022.
  • However, the majority of those funds were lost when FTX subsequently collapsed, Ferrante previously told The Block.
    Backpack was valued at $120 million during its Series A financing round in early 2024.

Bitcoin and Ethereum ETFs attract over $1 billion in combined daily inflows

U.S. spot Bitcoin and Ethereum ETFs attracted more than $1.1 billion in combined net inflows on Monday, helping bitcoin to briefly reclaim the $100,000 level before Tuesday's correction.

  • The spot Bitcoin ETFs brought in $978.6 million, led by Fidelity’s FBTC fund, which registered $370.2 million in net inflows.
  • The Bitcoin ETFs have now witnessed positive flows of more than $900 million for two trading days in a row, marking a significant turnaround following nearly $2 billion in net outflows witnessed during the prior two weeks.
  • Meanwhile, the spot Ethereum ETFs generated net inflows of $128.7 million on Monday, led by BlackRock's ETHA fund, which added $124.1 million.

CFTC Chair Rostin Behnam plans to step down following calls to regulate crypto

CFTC Chair Rostin Behnam is stepping down from the role on Jan. 20, with his final day at the agency set for Feb. 7.

  • Over the past few years, Behnam urged Congress to address a lack of crypto regulation at the federal level, highlighting that over 49% of the CFTC's enforcement actions in its 2023 fiscal year were related to digital assets, including the now-bankrupt FTX.
  • During his tenure, Behnam also supported the Digital Commodities Consumer Protection Act to define digital commodities and grant the CFTC regulatory authority over their trading.
  • Other agency leaders, including SEC Chair Gary Gensler and Federal Reserve Vice Chair for Supervision Michael Barr, have also announced their departures ahead of the incoming Trump administration.

Czech National Bank weighs bitcoin for potential reserve asset diversification

Czech National Bank Governor Aleš Michl is considering bitcoin as a potential reserve diversification option but confirmed there are no current plans to acquire it in an interview with CNN Prima News.

  • "Sure, I consider bitcoin, but there are seven of us on the board," Michl said, adding that discussions would continue. "Bitcoin is an interesting option for diversification against other assets."
  • The Czech Republic recently passed a law exempting long-term bitcoin holdings of over three years from capital gains tax, which took effect on Jan. 1.
  • The Czech central bank is also focused on increasing its gold reserves to 5% of total assets by 2028 as part of its diversification strategy, Michl said.

Arthur Hayes tells risk-takers to go 'degen' mode, predicts crypto peak in March

Former BitMEX CEO Arthur Hayes now predicts the crypto bull market will extend into a March 2025 peak, driven by over $600 billion in potential liquidity injections via U.S. Federal Reserve and Treasury initiatives.

  • Hayes backtracked on his earlier prediction of a market crash around President-elect Donald Trump's Jan. 20 inauguration, expecting there will now be sufficient dollar liquidity during the first quarter to offset potential policy disappointments.
  • Hayes advised risk-takers at his family office, Maelstrom, to turn their dial to "degen," increasing investments in decentralized science (DeSci) tokens, including BIO, VITA and PSY, as part of its strategy.

In the next 24 hours

  • Eurozone PPI inflation data are released at 5 a.m. ET on Wednesday. U.S. jobless claims figures follow at 8:30 a.m. The latest U.S. FOMC meeting minutes are due at 2 p.m.
  • Federal Reserve Governor Christopher Waller will speak at 8:30 a.m.
  • METAVSUMMIT concludes in Dubai.

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Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

James Hunt is a reporter at The Block and writer of The Daily newsletter, keeping you up to speed on the latest crypto news every weekday. Prior to joining The Block in 2022, James spent four years as a freelance writer in the industry, contributing to both publications and crypto project content. James’ coverage spans everything from Bitcoin and Ethereum to Layer 2 scaling solutions, avant-garde DeFi protocols, evolving DAO governance structures, trending NFTs and memecoins, regulatory landscapes, crypto company deals and the latest market updates. You can get in touch with James on Telegram or 𝕏 via @humanjets or email him at [email protected].

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